Carl Reader explains how to choose the right accounting software for your franchise
Accounting software is not the first thing that comes to mind when people consider how technology can help a business. We do however still see some small business owners that, even at the time of writing, only use their computers for bookkeeping. This is a sign of how prevalent accounting software has become throughout businesses of all sizes.
Traditionally, accounting software has been sold as a ‘box’ in a computer shop. However, there has been a shift towards online software.
Rather than being sold on a ‘boxes sold’ basis, software offered as an online SaaS (software as a service) solution tends to be provided on a subscription model. This model would normally be based on a monthly fee, with various tiers depending on the functionality required. There may be an upfront training cost, however users would not expect to pay an initial licence fee, nor an ongoing support fee, in addition to the subscription.
This reduces the upfront commitment, as it is no longer necessary to invest in the initial cost of software. However, over the life of the software this may prove more costly as support and upgrades are effectively bundled with it, whereas with traditional software you can opt in or out of these.
A big difference between traditional software and SaaS offerings is the levels of integration available between packages. Typically, traditional software packages are closed and any transfer of data between packages would require an export process (for example to a CSV file), followed by an import process in the other package. If the data is not in an interchangeable format, there might also be some manual adjustments required to the CSV data file to allow it to be understood by the recipient package.
With SaaS packages, vendors tend to pride themselves on the level of integration with other packages. So in the case of accounting, it could be that you would like your accounting package to integrate with a customer relationship management system, stock control system and your online ordering service. Historically this would have either required a bespoke package, a bespoke adaptation of off the shelf packages or a manual process to share information on a regular basis. However, with cloud computing this interchange is seamless.
Also, due to the nature of SaaS the software can be accessed through any internet browser. This removes the compatibility issue that many accounting packages had previously. Rather than ensuring you have a PC version of an application for a PC or a Mac version for a Mac, the software is universal and should not be limited by the end user’s terminal.
There have been a number of online accounting packages developed recently, and because of this there is no ‘one size fits all’ solution. Franchisees should therefore speak to an accountant with franchise experience to understand which package would be best suited to their network requirements.
Although not an exhaustive list, the following considerations should be taken into account when selecting a system:
* Ease of use. A system that is overly complicated is not going to be enjoyable to use and if the training is not sufficient the resulting reports are likely to be inaccurate.
* Cost. An expensive system is often an expensive mistake for most small business owners.
* Functionality. What requirements do you have from the system? If you require functions such as stock tracking, bill of materials and multi-currency, it might influence the choice of package. Likewise, it might be that you only require a simple online cashbook without the need for ledgers.
* Automation/integration. Will automated bank feeds save you a significant amount of time? Is there a CRM system that needs to be tightly integrated with your accounting system?
Usually we find that whatever system is decided on there is a compromise in one or more of the above areas. Nevertheless, the end result is often significantly cheaper and better supported than a bespoke system.