The days of dowdy accounting software – that which was made to keep
accountants in business and infuriate business users – are behind
us. Lead by several ‘Software as a Service’ providers, old players
in the market have been forced to raise their usability game and
streamline the weekly, monthly and annual administrative tasks you
need to complete to keep things rolling along smoothly.
Today, instead of paying hundreds of dollars each year for the
latest version of your software, you can pay a monthly fee that not
only gives you anywhere/anytime access to your data, but also is
updated whenever a new accounting rule is made law or an old
regulation is updated.
The new subscription-based software licensing models means that the
old “one license = one computer” system has been smashed. As long
as you can get to a web browser and remember your login details,
you can raise an invoice, process a payment, reconcile your bank
statement and even complete your BAS.
Today, you don’t need to install accounting software. Relatively
new players in the accounting software business, who brought cloud
services to business and accounting software, compete with
established marques like QuickBooks, Reckon, and MYOB. The new
players have upped the ante, forcing the old-timers to lift their
game and make their applications easier to use, more reliable and
up to date.
Six things to consider
Before jumping in and subscribing to a cloud-based accounting
solution, there are a few things you need to consider.
Annual fees: With a cloud-based service, you’re moving to a rental or access
fee – you’re not actually buying the software. Instead of making a
capital software purchase you’ll need to budget for monthly or
annual payments. Depending on your needs that could be as little as
a few dollars a month up to hundreds. Many Software as a Service
(SaaS) providers tell you they’re a cheaper option. But it’s more
likely they’re just smearing similar costs over a longer period,
much like taking on low or interest-free financing from a furniture
store – except that you never actually own the software.
Your data: SaaS providers don’t just provide the software – they also hold
your data. In some cases, getting hold of your data so you can
switch provider or make your own backups can be tricky. And while
SaaS providers do their best to protect your data, it’s still up to
you to keep reliable backups.
Integration: As your business grows and you invest in more SaaS you will
probably want different services to work together. For example, you
might want the invoicing module in your accounting software to work
with your customer relationship system. Do your research to ensure
the accounting system you choose can integrate with other
applications you might need in future. And don’t forget your
address book – having a single address record for all your
customers, suppliers and other partners will ensure you don’t have
to maintain the same data in multiple systems.
Workflow: When you commit to a new software package there will be some
necessary adjustment on your part. You’ll need to learn how to use
the software to carry out everyday tasks such as entering invoices
and receipts as well as produce your monthly or quarterly BAS and
reports your accountant will need for preparing your tax return.
Bank feeds: Cloud-based accounting systems can directly connect to most banks
and collect transaction data, saving you the effort of manually
typing every transaction. Make sure your bank or financial
institution is properly supported. For example, I’ve seen some
credit card feeds that are only partially supported resulting in
slow feeds or connection errors.
Multi-platform and mobile: Although you might do most of your accounting work on a desktop
or notebook computer, being able to raise an invoice from a
smartphone, or check outstanding accounts from your phone can be
handy when visiting a customer.