How to Choose Accounting Software
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Choosing the right accounting software can be challenging. Overall, it’s a strategic decision that can drive your team's success.
With the ideal solution, you can boost ROI, ensure accuracy, and keep compliant. But if you choose poorly, and you risk inefficiencies and errors that hinder productivity and your company’s financial health.
If you’re looking for an accounting software, but aren’t quite sure where to start, this guide is for you. It’s built for CFOs and financial leaders seeking to select software that aligns with their goals and overcomes challenges. Here’s how you can accomplish that.
9 Things to Look for When Choosing Accounting Software
When looking for a new accounting software, it’s important to first evaluate each option by focusing on the key factors that align with your business needs and goals. Consider these aspects to ensure you choose the right tool for your team:
1. Plan Flexibility
Plan flexibility allows you to adjust your software subscription as your business grows or changes. This is valuable for all business sizes, but especially startups and small business owners.
The best accounting software lets you upgrade or downgrade easily without cash flow penalties. Also, don’t forget to ask vendors about their contract terms and how they handle changes in your subscription.
2. Data Access and Reporting
Data access and reporting are vital for making informed decisions. As a CFO, you need an accounting system that provides real-time data and customizable reports for financial reporting.
Check if the software lets you export data in various formats. Additionally, make sure to ask if it supports dashboards and what kind of reporting features are available. This will not only make FP&A tasks easier, but also standard bookkeeping and project management.
3. Integration with Your Tech Stack
Integration with your existing tech stack ensures seamless operations. Your accounting software should connect with other tools like CRM, accounts payable and receivable systems, or payroll solutions. This saves time and reduces errors.
Always verify if the software has APIs or pre-built integrations. If you’re trialling the software through a demo, test how it could connect with tools you already use to avoid compilations down the road.
4. Onboarding and Support
Onboarding and customer support can make or break your experience with new software. When a vendor offers good onboarding assistance, it helps your team get up to speed quickly.
Look for providers that offer training resources and responsive support, and enquire about their support hours and channels through their contact page.
5. Role-Based Permissions
Role-based permissions control who can access what within the software solution. This is important for maintaining security and privacy, especially when it comes to financial data and personal bank accounts.
Ensure the software lets you assign roles and set permissions easily. When speaking with a representative, ask how granular these controls are and how they can be altered to better suit your business needs.
6. Industry-Specific Compliance
Industry-specific compliance ensures your software meets legal and regulatory standards. This is vital for avoiding fines and maintaining trust. Check if the software supports the compliance standards relevant to your industry, especially if you’re in more regulated sectors, like healthcare or finance.
7. Customization Options
Customization options allow you to tailor the software to your business needs. This can improve efficiency and user satisfaction. For example, if you’re in retail, you might need an accounting software that also offers inventory management and inventory tracking options.
Look for software that lets you customize fields, workflows, and interfaces. Remember that customization can incur additional costs. Always ask about customization options and number of user charges upfront during your initial consultation with a vendor.
8. Automation Features
Automation features can save your team time by reducing manual accounting tasks. Look for software that automates repetitive processes like invoicing, expense tracking, or manual data entry. This frees up your team to focus on more strategic tasks to help improve business operations.
9. Mobile or Multi-Location Support
Mobile or multi-location support is important if your team works remotely or across different sites. Ensure the software has a mobile app or internet connection that works well on various devices to help keep your team connected and productive.
Additionally, consider looking into the limitations and accessibility features when testing your chosen accounting solution.
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How to Choose Accounting Software: A 5-Step Framework
Choosing the right business accounting software involves more than just comparing basic accounting features—you also need to align the software with your business goals and team needs.
Follow this step-by-step guide when picking your next accounting software to help you find your ideal solution that ticks all your boxes:
Step 1: Identify Your Needs
You can’t pick a solution without knowing what you need it to do. Whether it’s tax preparation, managing financial information, or simply ease of use, start by defining your team's requirements to guide your search for accounting software:
Gathering Stakeholder Input
Involve key stakeholders like finance, HR, IT, and leadership early, as each department will have different perspectives and accounting needs.
Consider holding meetings or sending surveys to gather their input, asking about current challenges and desired improvements. This way, you can ensure the software meets everyone's specific needs.
Listing and Prioritizing Pain Points
Next, identify any functionality issues with your current system. Make a list of pain points or blockers your team faces, such as maintaining financial records, tax compliance, and time tracking. Then, prioritize these based on their impact on your operations and business finances.
Focus on finding a solution that can help solve the top pain points first to improve efficiency and satisfaction.
Aligning with Policies and Goals
It’s equally important to make sure the software aligns with your internal policies and goals. Consider vendor preferences, security protocols, and regulatory requirements. This includes ensuring data security and compliance with industry standards within your financial statements.
Differentiating Must-Have vs. Nice-to-Have Features
When looking at accounting software, always separate essential accounting features from optional ones.
Must-haves are features that address your top pain points and compliance needs, whereas nice-to-haves add value but aren't essential. This helps you focus on software that meets core needs first, while helping you avoid scope creep.
Ask These Questions:
- What complaints or blockers come up most often?
- What needs aren't being met today?
- What features would solve your top 3 pain points?
- What ROI are you expecting from this investment?
- How well does the software align with our security protocols?
Step 2: Research Accounting Software Vendors
After gathering team input, you’ll want to research and compare accounting software vendors to find the best fit for your needs.
Keep in mind, there are several types of accounting software. This is how you can whittle down your choices, and keep in budget:
Conducting Vendor Scans
Start with high-level scans using review sites, rankings, and case studies. These resources provide insights into vendor reputations and user experiences. Look for patterns in reviews to identify common praises or complaints to help you shortlist vendors worth exploring further.
Comparing Tools
Compare tools based on your business needs, like size, scalability, and integration capabilities. It’s also worth considering if you need a solution for outsourcing or prefer an in-house model, especially if you’re looking into small business accounting software.
From there, look for software that fits your existing tech stack and is user-friendly. This ensures smooth integration and minimal disruption.
Identifying Key Differentiators
Identify what sets each vendor apart. Focus on aspects like implementation support, user experience, and flexibility for niche use cases. For example, some vendors, like QuickBooks Online and FreshBooks, offer personalized support or unique features. Knowing these differentiators helps you make a more intuitive and informed decision.
Documenting Findings
Document your research findings for easy comparison. Create a spreadsheet to track features, pricing, and pros and cons for each vendor. With this organized approach, you can simplify your decision-making process. It also helps you present your findings to stakeholders.
Ask These Questions:
- What does each tool do best?
- Does it fit your team size, budget, and stack?
- What support and documentation are available?
- How flexible is the software for niche use cases?
- What are common praises or complaints from users?
Top Accounting Software to Consider
Here's my pick of the 10 best software from the 10 tools reviewed.
Step 3: Make an Accounting Software Shortlist and Reach Out
Next, you’ll want to narrow down your vendor options and start conversations with potential partners. Here’s how:
Shortlisting Vendors
Select 2-4 vendors based on your earlier research. Focus on those that best match your needs and priorities. Consider factors like features, pricing, and user feedback in your review process. This will help you focus your efforts on the most promising options.
Sending an RFI or RFP
Send a Request for Information (RFI) or accounting software RFP to gather detailed information. This formal process helps you understand each vendor's offerings and approach, and is especially useful for complex needs or large teams. Use it to clarify any questions or concerns you have.
Booking Demos
Book demos with your shortlisted accounting software providers. Ask focused questions related to integrations, add-on options, security, and more. You can also use this opportunity to see the software in action and evaluate its usability.
Make sure to prepare questions about specific features or scenarios relevant to your team. This helps you assess how well the software meets your needs.
Using Consistent Evaluation Criteria
Apply consistent evaluation criteria across vendors. Create a checklist or scorecard to rate each option based on key factors to ensure a fair comparison. Keep your team's priorities in mind throughout this process.
Ask These Questions:
- Can you walk me through a real customer story like ours?
- What support or onboarding resources do you offer?
- What features require an upgrade?
- How does your software handle data migration?
- What’s the typical implementation timeline?
Step 4: Build the Business Case
Now, it’s time to turn your vendor research into a business case that your leadership team will understand and support:
Summarizing Pain Points
Summarize the pain points your team faces and the outcomes you expect from new software. Highlight how the software will address specific issues and improve operations. Use bullet points to list pain points and expected benefits. This helps demonstrate the value of the investment clearly.
Presenting Cost Estimates
Find and present basic cost estimates and implementation timelines. Use vendor quotes and research to provide accurate figures. Consider both upfront costs and ongoing expenses, and check accounting software pricing for a more detailed view. Then, present this data in a straightforward manner, like a table or chart, for easy viewing.
Articulating ROI and Risks
Articulate the ROI, efficiency gains, and risks of doing nothing to really drive your points home. Explain how the software will save time, streamline processes, reduce errors, or increase productivity.
Additionally, remember to highlight the financial and operational benefits, as well as the potential downsides of not implementing the software, like continued inefficiencies or compliance risks.
Ask These Questions:
- What business problem will this solve?
- What are the risks of doing nothing?
- What are the financial and operational upsides?
- How soon can we expect to see ROI?
- What are the estimated total costs and timelines?
Step 5: Implement Your Accounting Software and Onboard Your Users
Once you have approval, you can start planning a smooth onboarding process. Here are some tips to help make it successful:
Communicating the Rollout Plan
Communicate the rollout plan clearly to all users. Share timelines, key milestones, and what each team member needs to do through emails, meetings, or internal platforms. It’s also important to keep open lines of communication to ensure everyone understands the process and other expectations.
Assigning Internal Owners
Assign internal owners and points of contact for the implementation. These individuals will handle questions and coordinate with the vendor. Choose people who are familiar with the software and can troubleshoot issues to ensure a smoother transition and provide users with support.
Ensuring Training and Adoption
Ensure your team completes training and adopts the tool consistently. Schedule training sessions and provide access to resources like webinars or guides.
You should also encourage regular check-ins to address questions and monitor progress. Remember, consistent use of the tool helps boost efficiency and end user satisfaction.
Creating Feedback Loops
Create feedback loops during the rollout, including vendor resources. Most new software comes with a learning curve. Encourage users to share their experiences and any issues they encounter, then use this feedback to make adjustments and improve the process.
Additionally, collaborate with the vendor to resolve technical problems or optimize features for better use cases.
Ask These Questions:
- What’s the change management plan?
- Who’s responsible for roll-out?
- How will you track early success?
- What training resources are available?
- How will you gather user feedback?
What’s Next:
If you're in the process of researching accounting software, connect with a SoftwareSelect advisor for free recommendations.
You fill out a form and have a quick chat where they get into the specifics of your needs. Then you'll get a shortlist of software to review. They'll even support you through the entire buying process, including price negotiations.