How to choose accounting software

By Nathaniel Dalby on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

When considering the administrative needs of your business, accounting is at the top of the list. Having a good accounting structure will ensure compliance, but many business owners don’t consider the time that proper accounting can save too.

Remaining accurate and compliant are just part of good accounting, and with specialised software such as Sage, you can enjoy features like AI-powered automation, tax reminders and generated invoices. But how can you work out which is the best option for you? Here, we’ll take you through everything you need to consider when choosing accounting software.

Assessing your business needs

Before you make any decisions about accounting software, it’s important to analyse your business and what needs you have as an organisation. The size of your business is one of the major factors you should consider, as what you need out of the software will differ depending on whether you’re a sole trader, SME or expanding business. The number of employees you have will also affect payroll too.

The type of business you run will dictate your expense and invoice management requirements, though these features typically come as standard with accounting software. Compliance with the initiative is also something that makes these types of software desirable to all UK businesses, regardless of type.

Costs and scalability

Once you decide you need accounting software, cost is the headline concern. How much you pay will depend on a few factors, including business size and employee count, as well as the size of your budget . If you’re looking to save some money, think about choosing an annual plan, which could be cheaper in the long run compared to monthly payments.

You’ll also need to think about the future and how your business could expand. This is where the scalability of your accounting software is important, as it will allow you to grow your business while staying with the same provider.

Compare features and integration

Alongside cost, the features that come as standard with accounting software are also things you need to seriously consider before you make your decision. Features such as VAT calculation, multi-currency handling and reporting tools can all help save a lot of time and cut out human error in accounting. Sage’s CoPilot and AP Automation automatically extract data from documents such as invoices, receipts and bank statements and identify errors or patterns, as well as generating reports.

Integration is also a vital part of accounting software, as you’ll need to find a product that works seamlessly with any CRMs or inventory systems you already use. Xero, Quickbooks and Sage all feature strong levels of integration, so make sure you do your research to avoid choosing a product that might be incompatible.

Check reviews

It might seem obvious to check reviews before signing up to something, but it’s still one of the best ways to see whether accounting software is right for you. Using services such as Trustpilot, you’ll be able to see real-use cases and testimonials from the customers of any software you’re thinking of getting.

Most accounting software allows you to try the service for free or book a demo before you commit, so look out for any free trials of the product you’re interested in.

You can also ask the owners and accountants of businesses you’ve connected with for any recommendations, and remember that if the product isn’t very good, they’ll have probably already told you about it!

Which accounting software is right for me?

Ultimately, you need to be as careful choosing accounting software as you are in other areas of your business.

With so many different products and services available in the UK market (such as Sage, Quickbooks and Xero), it’s easier than ever to find one for your specific requirements as a business.

By assessing your needs, establishing a budget and keeping track of your goals, you should be able to find the service that’s perfect for you.

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