An illustration of a business owner making an accounting software selection.

Accounting software selection: 7 factors to consider

Managing your small business accounting can seem overwhelming, especially considering all the other essential tasks on your to-do list. The financial aspects of even the smallest businesses are complex. But there are ways to simplify your responsibilities and automate much of your accounting.

User-friendly accounting software lets you streamline these processes—eliminating hours of mental math, manual data entry, and inventory tracking. So, whether you’re handling your business’s accounting yourself or with dedicated accounting personnel, accounting software can help you manage tasks such as bookkeeping, reconciling bank accounts, and generating financial statements

But what should you look for in accounting software? Let’s explore the seven factors to consider when finding the right accounting software fit for your business.

1. Your budget

An illustration of the 7 must-consider factors for picking an accounting software.

As a small business, it’s important to stick to your budget. However, accounting help isn’t just for businesses with big budgets and experienced teams. There is accounting software that offers a cost-effective way to do your bookkeeping and accounting tasks.

Although there are free accounting software options, such as Excel, they typically don’t offer the robust functionality and accounting tools that business owners need to tackle their accounting needs.

When considering new expenses, ensure the product is a reasonable expense you can easily afford each month without jeopardizing your financial stability. After all, the last thing you want to do is rack up credit card debt. 

While accounting software for small businesses will likely be one of the smaller expenses on your roster, services can add up, so you want to make sure you’re a smart spender.

Once you find information on the accounting software’s pricing—whether it’s a standard fee, tiered pricing plan, or custom quote—you should compare your options to see where you’ll get the most value for your money. 

2. The learning curve

Introducing new software as part of your accounting or bookkeeping process may require a learning curve—time and effort to learn the software—whether just you or a team will be working with it. While there’s no way around it, it’s undeniable that some programs are inherently easier to understand than others.

Understanding your company’s financial data is already complicated, and accounting software should make it easier, not harder. Some programs go overboard with sophisticated functions and a confusing setup that’s difficult to navigate.

The best accounting software for small businesses prioritizes an excellent user experience—meaning it’s easy to learn, has clearly labeled and organized features, and is simple to navigate. 

3. Available features 

An illustration of the questions to ask yourself when making an accounting software selection.

Not all accounting software is created equal. When comparing programs, one of the most important factors to consider is the specific accounting features. For example, consider such things as: 

Keep in mind that many accounting software providers offer tiered packages that allow you to increase the number of features provided for a higher cost. 

Automated accounting can save you even more time on accounting, but you want to ensure you have the right integrations to make automation as smooth as possible. 

4. Integrations

To cut down on time and make the most out of automation, you should look for accounting software that integrates with other tools you use. Such integrations will allow you to ‌spend less time copying information over through manual data entry. 

Key integrations may include:

  • PayPal 
  • Square 
  • Amazon
  • Shopify
  • eBay 

Before you select an accounting software solution, find out if it can be synced with your banking information and with commerce and transaction tools like Square.

5. Reporting capabilities

How much do reports help your business? Are you an accounting novice or need help finding useful reports? Basic accounting software may be enough if you’re simply looking to streamline bookkeeping, manage bills and payments (like automated invoicing), and run standard financial reports. 

However, if your needs exceed that (like completely overhauling your small business accounting processes), you’ll want more robust tools. Robust reporting tools allow you to create such reports as: 

Software like QuickBooks Online can essentially replace the functions of an accounting team (and possibly even your payroll services).

6. Cash vs. accrual accounting offerings

An illustration of cash vs. accrual accounting software.

Nearly all accounting software supports double-entry bookkeeping, but not all businesses have to use accrual accounting. Or maybe you want to start with cash basis accounting and eventually transition to accrual accounting. 

In this case, accounting software that supports both accrual and cash accounting might be important. 

Accrual accounting records transactions when they are incurred, regardless of when you receive or pay cash. Cash accounting is the opposite—you record transactions only when money exchanges hands. 

7. Scalability

Accounting software loaded onto a single computer is outdated. However, with contemporary online accounting software that lets you store all your data in the cloud, you can access the financial information you need anytime.

Having your accounting data in the cloud can help ensure your software and processes can scale with your business. With cloud accounting software, anyone on your team (with the sign-in credentials), including your CPA, can use the program on any device. In addition to being cloud-based (accessible anywhere there’s internet access), many online accounting software options have corresponding mobile apps. 

This could be important for working while traveling, preparing for an investor presentation, or keeping tabs on your small business accounting status at all times. With a convenient accounting solution, you can enjoy peace of mind anytime, no matter where you are.

Why your accounting software selection matters

An illustration of why accounting software is important.

Accounting software is a suite of programs designed to help businesses automate bookkeeping and accounting tasks like invoicing and expense tracking. 

Small business accounting—from proper bookkeeping and cash flow management to invoicing—is essential to your financial success. Accounting software can impact the big picture and directly impact the financial aspects of your business as such:

  • It can keep your books up to date.
  • It can improve payment collections, as automated invoicing and payment processing make it easier to stay on top of what customers owe.
  • It can reduce errors from miscalculations, incorrect reporting, and missed transactions.
  • It can generate more accurate financial reports and documentation.
  • It can lower costs.
  • It makes it easier to calculate and file business taxes.
  • It can maximize tax deductions for greater savings. You can store receipts for expenses and track mileage within the QuickBooks app.

The many benefits of accounting software make it an essential tool for running your small business more efficiently (with fewer headaches). With accounting software, small businesses can use their (often limited) resources more efficiently and increase productivity. 

In other words, you can spend less time studying bookkeeping, managing time tracking, chasing down payments, or struggling with inventory management.

Tips for selecting the best accounting software for your business

With many different accounting software solutions available, navigating the sea of virtually endless options can be difficult. 

The best accounting software option is the one that’s suited to your company’s needs. If you’re considering using one for your business, review these factors to ensure you choose the right accounting software for your organization: 

  • Identify your business's financial needs first. 
  • Look for software that suits your business size, complexity, and budget.
  • Consider the software's features, such as invoicing, payroll processing, and reporting.
  • Ensure the software integrates with other business applications and banking systems.
  • Check the software's security features and data protection measures.
  • Read reviews and compare pricing plans before making a final decision.

Only you can determine the right accounting solution for your business. Consider your priorities, whether a low-cost subscription fee or a comprehensive solution and narrow down your options. Ideally, you’ll want to find online accounting software that provides the greatest value (has the most useful features to meet your business needs) for the most reasonable cost.

There are plenty of software solutions available. Popular accounting software companies include QuickBooks, FreshBooks, Sage, Wave, and Xero.

Streamline your accounting and save time 

Let’s face it—no matter how tech-savvy you are, making an accounting software selection can be challenging. With any new product or service, especially one that can significantly impact your business, it’s important to know whether there’s easily accessible customer support.

Simplifying your process with accounting software is a big step in the right direction to better manage your business finances, make more informed decisions, and take the uncertainty out of tax season—especially if there’s a free trial.

Accounting software selection FAQ

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