Factors to Consider before Buying Bookkeeping Software for Your Business in USA

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Tally Solutions | Updated on: March 29, 2022

There are a few things that you need to consider before buying any bookkeeping software for your business. Before you start, you need to be sure that you are fully aware of the requirements and know what features to look for. There are multiple applications and software available in the market with varied capabilities. Knowing which one is right for you with all the right features, taking into account your bookkeeping needs can be quite tricky. So here are some factors to take note which will help you zero in on the right software for your business.

Factors to consider

  • Accounts receivable and accounts payable

An important feature of any decent bookkeeping software is keeping a record of the money your customers owe you, i.e., accounts receivable, and the money you owe your vendors, i.e., accounts payable. It should create professional invoices that suits your business.

  • Cash-based and accrual-based: the two methods

There are two methods used in bookkeeping: cash-based, and accrual-based. In cash-based, the payment receipts are recorded when you receive the payment and the expenses are recorded when you make the payment, The cash method is used to record immediate cash flows. Small businesses are more suited to this method. Whereas the accrual method is based on anticipation of the expenses and revenues. Larger businesses are more suited to this. Small companies that grow big often start with the cash method and transition into the accrual method when the need arises. The software you go with must give you the option to choose between the two methods and let you switch methods.

  • Insightful Reports

Keeping track of how a business is doing from time to time is key for any business to grow and prosper. Monitoring and learning how it is performing can be crucial. For this to be smooth, the software you choose must be efficient in generating financial statements and reports like balance sheets, cash flow and income statements.

  • Organizing records and books of accounts

Having good ease of accessibility and the capability to organise records and books of accounts is one of the most important factors to consider. Any software worth the money should be intuitive and have an easy-to-access method of record keeping. Without this, a fundamental function of the software is undone.

  • Purchase and sales management

An efficient software also manages the purchase of sales transactions. This has a larger implication on other parts of the business as well, making other aspects like, say, warehouse management, easier.

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  • Cost tracking and management

Tracking costs and managing them efficiently has an immediate impact on operations: it prevents budget overruns, investments are done in a more impactful manner, and funds are better utilized

Usability features

  • Simple to use

A simple interface makes it easy for non-experts in bookkeeping to navigate through the software and make optimum use of it. Providing an uncluttered interface is important as bookkeeping usually involves a multitude of entries which might confuse the user.  

  • Data Security

Another feature is securing the data that is entered in the software. The software is likely to deal with sensitive information which should only be accessible to the intended user. Encryption of data is a measure that can ensure a layer of security.

  • Online Business Reports

The software should be accessible from multiple devices and locations. This helps in making sure that business data is accessible easily to users, irrespective of their geographical location.

  • Integrating different business functions

 The software must be adept at integrating different functionalities like accounting, inventory, and banking.

  • Features to manage requirements as business grows

Businesses sometimes grow rapidly, and the software used must be able to manage this growth. Constant changes will be difficult for the end user to manage.

  • Flexible to adapt to business

 The bookkeeping software must be nimble enough to be used across various businesses and use cases. A highly specialized software makes usage across industries more difficult.

Pricing

There is software that have different pricing for different range of features, multi-user capability at one time cost. Pricing should take into consideration multiple factors like maintenance fees, multiple user fees and sustained support fees. It should avoid charging the users for functions that are essential in using the software. Check if the software has a free-trial available so that you can get hands-on experience and go for the best one.

Benefits of using bookkeeping software in businesses

These are some of the benefits of using bookkeeping software in businesses.

  • Keeping track of business processes like invoicing
  • Keeping a record of accounts receivable and payable
  • All your billings are a click away
  • Bank reconciliation

These are vital for the growth and success of your business. Good bookkeeping software plays a key role in ensuring it.

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