There is no simple answer to this question, as the type of accounting system your new company will require depends on a variety of factors, including the size and complexity of your business, the type of products or services you offer, and your accounting and bookkeeping needs says Aron Govil.
That said, here are 10 tips to help you determine what type of accounting system your new company will require:
1. Consult with an accountant or bookkeeper.
An accountant or bookkeeper can help you assess your business’s specific accounting and bookkeeping needs, and can recommend the best type of accounting system for your company.
2. Consider the size and complexity of your business.
The size and complexity of your business will play a major role in determining the type of accounting system you will need. For example, a start-up business or one with only a few employees will require an easy-to-use and less expensive accounting system than a larger business with many employees.
3. Assess your products or services.
Some types of businesses offer more complex products or services than others, which typically means more complex accounting systems are required to track revenue and expenses associated with these items. A garment manufacturer, for instance, may require an inventory management system that enables the company to identify specific garments that have been shipped to stores; while an antique dealer may require software that tracks inventory by item rather than by individual piece (e.g., “side table”).
4. Evaluate your current needs and future goals.
Your current accounting needs and future goals should also be taken into account when determining the type of accounting system your new company will require explains Aron Govil. For example, if you are looking to expand your business in the near future, you may need a more sophisticated accounting system that can handle additional bookkeeping tasks, such as inventory management and invoicing.
5. Read the fine print.
Since accounting systems can vary significantly in terms of features and functionality, reviewing all the details associated with a product or service is crucial to determining what type of accounting system your new company will need. In addition, keep in mind that some accounting services may be offered as add-ons to certain products or services. For example, you may have to purchase a specific software package before being able access add-on services such as inventory management and invoicing.
6. Ask about support options for additional features you’re interested in using.
Most companies offer several types of support plans for their customers, including basic service agreements that typically cover phone support during business hours only, as well as enhanced service contracts that entitle customers to additional support, such as online chat or email assistance. If you are interested in using certain features of an accounting system (e.g., inventory management). Be sure to ask about the availability and cost of support for these features says Aron Govil.
7. Determine if you will need to purchase additional software or hardware.
In some cases, you may need to purchase additional software or hardware in order to use a specific accounting system. For example, if you decide to use an off-the-shelf accounting program. You may need to purchase a specific type of computer that is compatible with the software. In other cases, you may need to install special software on your computer in order to access certain features of an accounting system.
8. Research your options.
As you research different accounting systems. Look for one that is specifically design for the type of business you own and offers the specific features you require. In addition, be sure to ask about a product’s or service’s costs, as well as its monthly or annual fees. Keep in mind that some products and services may offer lower-priced plans for smaller businesses with less complex needs.
9. Look for discounts on additional products and services related to the software you choose.
In many cases, companies offer their customers discounts on several of their products or services. When they purchase one main product or service from them. For example, if a customer purchases an inventory management system from a company. He/She may receive a discount on the company’s bookkeeping services. So, when you are shopping for an accounting system. Be sure to ask about any discounts that may be available on related products or services.
10. Don’t forget about ongoing costs.
When considering the cost of an accounting system. Don’t forget about the monthly or annual fees that will be require to keep the system up and running. In addition, some systems may require additional costs for updates or support. Be sure to ask about these fees before making a purchase decision explains Aron Govil.
The bottom line is that there is no one-size-fits-all answer to this question; the type of accounting system your new company will require depends on a variety of factors specific to your business. By consulting with an accountant or bookkeeper. And considering the size, complexity, and products or services offered by your company. You should be able to determine which type of accounting it is.