July 2009
Twenty years of wisdom in a nutshell: Softline Pastel’s Top Tips for choosing an accounting system.
A good accounting system that not only “keeps the books” but also provides the business owner with the company’s vital statistics at a glance, is one of the best investments you can make for your business, according to Softline Pastel MD Steven Cohen.
“By running your company by more than just the seat of your pants and the state of the bank balance, you can avoid the pitfalls that cause most start-up businesses to fail within the first 12 months – poor cash management, no insight into good and bad customers and the like,” he said.
The best accounting system, according to Cohen, must meet two basic requirements. The package you choose should meet the needs and structure of your business and speak to you at the technical level you are comfortable with, be it with a deep understanding of accounting or in plain language because you’re not an accountant.
Cohen suggests that before you decide on a system, you should ask a few questions about your business:
How complex is your business?
How many different products and services do you offer? Is your business cash-based or do you want a lot of different accounts? Do you import or export anything? The answers will tell you how much and what type of functionality you need.
How industry-specific do you need the package to be?
A professional services business requires different functionality from a manufacturing business. If you’re in retail, you’ll likely need point of sale functionality. Choose your package accordingly.
Do you anticipate growth?
You may want software that will grow with your business, allowing you to add functionality as it becomes necessary.
What ancillary technologies will you want to exploit?
Mobile devices for your sales people? A website on which your customers can place orders? Automatically e-mailed customer invoices?
Once you have a better idea of your requirements, think about the specific software.
Would you need more than one user on the system?
Multi-user systems require networks or even a telecommunications infrastructure, should you have users in different locations.
Do you need online access to your accounting system?
In very small businesses, where the owner does almost everything, a system that’s purely online makes sense because he or she can transact from anywhere with an internet connection. More established traditional businesses may require dedicated accountants or bookkeepers working at workstations.
In other words, look at the total cost of ownership (TCO) of a computerised accounting system rather than just the cost of purchase. This includes things like ongoing (contract-based) support for your hardware and software and the cost of telecommunications.
Does your software supplier have a clear roadmap?
As new technologies come on-stream, your accounting system may need changing. Does the supplier you have in mind have a roadmap for such changes? Can you move to larger or smaller systems in the range?
Who is your most trusted advisor?
Your accountant is. He works with a lot of different packages and he knows your business well. He’s well-positioned to know what will work for you.
Custom-design or off-the-shelf?
Custom software is almost never a good idea for small businesses. Use an off-the-shelf accounting solution rather than having someone write software specifically for you. A much broader base of knowledge and experience goes into off-the-shelf packages as opposed to a single person doing one-off developments.
Look for track record
Buy from an established developer with thousands of satisfied customers. Ask other businesses what software they use and like. Read reviews of accounting packages.