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Accounting software guide

Choosing new accounting software can be a daunting task for any business, but all the more so for small business. Over the following pages, CFO World's provides an overview of the Australian small business accounting software market. It aims to help you in the early stages of the buying process, let you know what questions you should be asking and demystify the jargon that sales people will inevitably throw your way.

The function of accounting software

Contemporary SME accounting software packages are designed to simplify and automate complex, manual financial management processes and improve the accessibility, accuracy, and timeliness of mission-critical financial data. In doing so accounting software manages processes and procedures for accurately entering, tracking, and maintaining information related to an organisation's financial operations. At the very least a CFO would expect accounting software to increase the productivity of finance staff members, while improving financial performance management and strategic company planning.

Leading brands appear to be delivering on this and this guide examines the various issues that a buyer needs to be concerned about.

Definitions

Software can be purchased as physical packages “off the shelf” or downloadable over the internet. Online accounting is software hosted on a web server that can be accessed by many users at once using a computer’s web browser. A single (or multiple) instance of the software runs on server infrastructure, but serves a number of client users. So rather than paying up front costs for software customers pay a smaller quarterly fee. This is a bit like renting your software while you need it rather than buying it.

Low end to high end

The simplest accounting packages in the Australian market from well known suppliers such as Quicken and MYOB are designed for smaller businesses in start-up phase or those who need to do in-house bookkeeping that feed the necessary information to an external accountant to do “the books” and do compliance returns such as BAS and tax returns as well as company returns to the ASIC. Packages are deigned to be used by non accounting people with no finance skills and only basic computer skills.

A CFO is concerned about the finances of the organisation and whereas larger companies have enterprise systems many small to medium businesses require that other functions (such as inventory control, manufacturing management, and financial reporting) need to integrate with their accounting system. As the enterprise begins to expand across many product ranges geographic locations as well as implementation of strategic planning (not always the highest priority for a start up), the CFO will look to his system providing a capacity to undertake spreadsheet models and templates for cash flow forecasting, business plans, and more.

At the larger sized business, where there are in-house finance professionals, solutions are frequently part of an extensive suite of software often known as Enterprise resource planning or ERP software. Here the use of a single system to integrate all of the data and processes of an organisation - no matter how complex it is.

The switch from software to online accounting

Software which is web-enabled will, for the more popular brands at least, interact with other applications across the company network or over the internet. This means that information can be more easily accessed and entered through different applications, and maintained in real-time. Hosted accounting online software solutions that are maintained by a service provider and then accessed over the web is increasingly becoming the norm in accounting software applications with CFOs choosing Web-based accounting systems over client/server solutions.

As broadband penetration increases and bandwidth increases the capacity to have software provided as a service, that is, anyone with a PC and an Internet connection can use their browser to access applications online and store their data files at a remote location, such as a data centres, making software simpler and cheaper to use. In effect the choice of the right accounting software is getting simpler.

Next page - Hosted accounting software

Tags smbquickbooksbuying guideaccounting softwareMYOB EXO BusinessSME

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