Selecting ideal bookkeeping software for conducting business is one of the most crucial functions that the finance department of a business does. The right kind of software comes in handy for streamlining the business process, increase the accuracy of the business process and provide useful information that helps to improve the performance.
On the other hand, a wrong one will do just the opposite. It will be a costly burden that will be of hardly any use, except for creating unproductive use of time and producing reports that will be of little or no value so far as improvement of the business operations are concerned. That is the reason a business house needs to be extremely cautious while selecting the ideal accounting software. Now what are the parameters that one has to gauge before opting for such software? Let us discuss in details.
Knowledge of accountancy and complexity of the software
This is predominantly the most important factor that needs to be taken into account while opting for the accounting software. Firmly, the ones at the helm of the business should take into account the extent of knowledge the employees have in accountancy. While a sound knowledge in accountancy will help them in the use of this software, lack of it will to a considerable extent limit the scope of usage. If the employees are adequately knowledgeable and experienced, that will come in handy while using the software to a large extent.
The employees need to have a commendable knowledge in accountancy and a sound understanding of the general ledger bookkeeping to be able to master the software. Hence, before the management decides for a package, it needs to take into account the competency of its employees and their experience. If the employees are vastly experienced, they can opt for highly complex and state of the art software with value added features. On the other hand if they are not that knowledgeable, it is ideal to opt for relatively simpler versions which are easier to use.
Size & Scope of Business
This is another factor that should decide the type of accounting software to be selected. These bookkeeping software packages come in three forms – packages for entry level or startup businesses, for small as well as medium sized businesses, and the ones that are designed for large scale or corporate businesses. It is perhaps not worth mentioning that the complexity of these packages and presence of various value added features vary in accordance to these three categories. Naturally, while selecting the ideal bookkeeping software, one of the most important factors that need to be taken into account is the size of the business and the scope or portability of future expansion of the business in question.
Nature of Business
While there are packages that are specifically designed to take care of daily transactions like account payable and receivables, maintenance of general ledger and the likes, there are certain packages that are meant for more complex and higher accounts related functionalities.
These relatively more ‘sophisticated’ packages are available with integrated modules that are programmed to deal with various complex aspects of a business like inventory management, manufacturing cost accounting and management, construction accountancy and management, retail sales management and so on. Naturally, if a business is that complex it is ideal to opt for these more improved varieties. Then of course, the budget should permit as these packages are far more expensive than the simpler versions.