But, if you take a moment to jot down a few things to consider, the decision-making process can be less painful than, say, a trip to the dentist.
Here are some questions to ask yourself when deciding on which accounting software is best for you:
Why do I need accounting software?
If you don’t answer any other question, you must answer this one.
Do not, I repeat, do not choose accounting software only because your friend, spouse, trusted advisor or anyone else told you to get software.
Do choose accounting software, because your current system (you do have a system, right?) of pencil & paper or what have you requires too much of your time.
When you’re just starting your business, you may not have many moving parts. That’s ok and pencil & paper or an electronic spreadsheet will do just fine.
The minute you hire an employee? The moment you make and sell your first widget? The time you receive your PayPal notification of a payment received? Good examples of when you may consider moving to accounting software.
Am I comfortable making monthly or annual payments?
There are a lot of web-based accounting software available, but most require a subscription to their services, payable either monthly or annually.
If the monthly payments are beyond your budget at this time, then either desktop software or no-cost accounting software will work best.
How many people will need consistent access to the software?
The key here is consistent (as in frequent) access.
If you have someone outside of your business who needs access (e.g. your bookkeeper, other trusted advisor), most web-based/on-line accounting software have an option to invite or add an “Accountant” type of user, without impacting your overall per user subscription.
If you have someone inside of your business who needs occasional (e.g. once a week) or limited access, then desktop or on-line software may work.
My general rule of thumb is, if there are more than 2 people needing frequent access to the software, then it may be time to consider on-line options.
What kind of business do I have?
In broad terms, if you have a service-based business, you may do well with on-line software. But, here are a few types of businesses, which may find on-line software lacking in needed features (without add-ons):
- Businesses dependent on inventory
- Manufacturing businesses (especially with lots of assembly)
- ACE businesses (architecture-construction-engineering) with job costing
- Non-profits with significant grant/program/donor fund management.
On-line software may work for the above business types, but often the software requires substantial setup, including purchases of third-party add-ons or integrations.
Which features are my must-haves?
Feel free to think about what you would like to accomplish with the software:
- Free up more of your time to focus on revenue-generating tasks
- Create meaningful business reports
- Enter transactions from your bank and/or credit cards
You can do all of the above with either desktop or on-line software. The benefit of on-line software in the above cases is the ease and speed of handling those tasks. If time is of the essence, then perhaps on-line software is for you.
There is no perfect accounting software solution. Once you accept that idea, you can think more about the must-haves and less of the nice-to-haves. If you find software meeting most of your needs, then you can see how many “wishlist” features are also available.
Do I have time to update my accounting software?
You know your business inside and out, but do you have time to take the technological leap with your software when there’s an upgrade?
Do you have time to install updates/upgrades as needed?
If you answered “no”, then on-line software may be your best bet.
The updates/upgrades happen automagically, meaning everything happens in the background usually without bogging down your computer’s resources.
Am I computer/tech-savvy?
This question relates to the one above it.
Even if you are a whiz at Excel or other software, overwhelm can still come knocking at your door.
Accounting software, whether on-line or desktop, can vary from fairly simple to downright complicated.
Here’s a hint. If your desktop software has a manual with more pages than your local newspaper, or your on-line software’s support guide has several “next page” options, you may need to know more than “point and click”.
While there is no one-size-fits-all software, there are lots of software options available, for desktop or on-line use.
My best suggestion? Visit the websites of the software you are considering, then see if there are trial versions available and if so, then go for a test spin!
Drop me a line, if you’d like to bounce an idea or two, about a test spin, my way. Happy trials! I mean … trails! Ha!
(A version of this article was previously published on my site for small business owners looking to DIY their bookkeeping.)