There seems to be something in the air – a definite and growing recognition amongst accountants and small businesses that investment in accounting software and IT in general is one of the best ways to increase efficiency, reduce costs and maximise productivity.
For accountancy firms, software and IT solutions are a fundamental component of their day-to-day activities. For them it’s easier to know when to upgrade or to invest in entirely new systems. But for a small business, how do you know when it’s the right time to invest in accounting software and what things should you consider before taking the plunge?
I’m doing fine with my Excel spreadsheets. Do I need accounting software?
If you run a small business with no current plans for growth and a spreadsheet works for you without impacting upon your ability to do business, we’d never try to suggest you buy something you don’t need.
However, if you are planning to grow, of if you’re finding that keeping track of your records and late paying customers on spreadsheets is becoming complicated then accounting software could be essential to managing your accounting needs.
So I’ve decided to replace my trusty spreadsheet. What next?
First and foremost, don’t buy accounting software before you have really looked hard at what you need from it. Whatever you invest in it needs to be scalable, both in terms of functionality and number of users. It should enable you to invest in what you need now but be able to grow with your business.
It’s not easy to know exactly what the future holds, but there are certain factors to consider before investing. What follows is by no means an exhaustive checklist, but it should give you food for thought.
1. How quickly is your customer base growing?
With a very small business it’s fairly straightforward to track invoices and payments. But as your business grows and the number of customers increases, accounting software will help you to better manage this growth. You should also consider the location of your customers. As your customer base grows you may need the ability to invoice your customers in other currencies.
2. Do you plan to expand?
As your customer base increases, you may need to relocate to larger premises or even open additional premises in order to better deliver your goods or services. This in itself can open up more opportunities to increase customer numbers.
You need to anticipate the increased complexity expansion brings to your business and ensure your systems and processes are robust enough to cope. If you do have multiple offices then you will also want to be able to access your financial data from any location.
3. Will you take on employees?
If you intend to employ more staff you will probably expect at least some of them to be making use of your accounting software. So you need to ensure that the software you invest in it can cope with multi-user and, perhaps, multi-level access as you will not want to grant full access to all your users.
4. Will you need customisation?
Some accountancy software operates ‘straight out of the box’. It has functionality you may or may not need according to your requirements, and there is little flexibility outside of these confines.
This can be fine for many small businesses, but if you have requirements that are specific to your own business, particularly as your business grows, you need to ensure the accountancy software can be customised to meet them. Systems like Fusion Accounts not only provide customisable elements to meet the needs of a business, it can effortlessly cope with the requirements of multi-currency sales –so for your business, the sky’s the limit!
If you can effectively manage the financial aspects of your business now and accommodate changes in the future, you have a far greater chance of success in business. To learn more about how Fusion Accounts can help, why not call us?
Accounting software by online accounting provider Fusion Accounts, small business software
Online Accounting – Anytime, Anywhere
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