Growing Up – 4 Steps To Finding The Right Accounting Software For Your Small Business

Small business owners are usually looking for ways to increase their bottom line and make their business run more smoothly. And, for many small but growing businesses, adding an accounting software package to their routine can do just that. But, it's vital to do some research first. Here's a 4 step guide to making the transition.

Assess Whether It's Necessary

The first question to answer may seem simpler than it really is. Do you even need to start using computerized accounting at all? While many people may accept that adding automated accounting will help your business, that's not a given for very small businesses.

If you do only a few transactions per month, have no employees and little inventory, and already have a good system of tracking income and expenses, you may want to rethink adding the complexity of accounting software. Will it really add value, or will it just make things more complicated?

Decide What You Want to Do

There are a lot of accounting systems available these days, so you should decide what you want to accomplish before you start looking at them. Do you want to be able to use mobile apps? Do you need to track inventory or report taxes? Are you going to hire employees soon? Do you want to download bank transactions?

Make a list of your priorities -- especially things that your current paper-and-pen system can't do -- and keep it handy when looking at your options. Label the priorities in order of importance.

Don't Over- or Under-Buy

Finding the right compromise between your needs, your budget, and future growth can be difficult. You don't want to purchase a software that's too simplistic and can't adapt to future growth (such as systems that don't use double-entry accounting). But, at the same time, you likely want to avoid overpaying for features you aren't going to use for at least a few years.

Ideally, you may want to opt for a service that has additional upgraded versions ("pro" or "extended" versions, for example) that you can easily move into in the future.

Talk with a Professional

If you don't already have a relationship with an accountant, this may be the time to start one. A professional accountant can help you determine what your real needs are, what you may look for in future features, and how easy it is to use a given software or service. He or she will be very useful when setting up or trouble-shooting whichever software you decide to purchase, too.

By following these few guidelines when comparing accounting packages and reading reviews, you can help ensure that your choice will be the best one for years to come.