Harland Accountants director Simon Foxhall has some business management and information technology advice to offer
“Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the other.” Bill Gates.
Technology is now the key to monitoring business performance. If you want accurate reports and analyses on profit margins, expenditure, debtor/creditor ratios or cash flow there is certain to be software available that promises to do the job.
But as accounting software becomes increasingly available at the click of mouse how do we decide what we need and whether is does what it says on the tin!
Here I have highlighted some points to consider when buying accounting software to help you make the right decision for your business.
Is that new software really necessary?
Be specific about the information you require. Many businesses produce reports simply because they ‘thought it would be useful’ but if you are not using them as part of your business review process then think hard before buying.
Is it too sophisticated?
Does the software you are using already deliver the information you need? Many packages offer tempting graphical, statistical and variance reports but do you really need this capability.
Is it industry specific?
Does the software have industry specific applications or is it a general package? Many have formats, data entry process and help screens that will make information entry and retrieval time much more efficient and relevant for your sector or profession.
Keep it simple
Can you easily access the information you need? Businesses often review their enterprises using differing criteria, some use cash position as a Key Performance Indicator (KPI’s) others may use forward orders, pipeline sales or stock holding. Whatever you choose clear, hard and easy to read facts at fingertips are essential.
Consider external parties
Your key business stakeholders such as investors will require accurate information on a regular basis. Does your reporting system provide this in a format that they can easily use? If not it may be time for a review?
Who needs the information – when and why?
Discuss with the relevant people in your business what information they require and when. Pooling thoughts and ideas can mean that reports and other processes could be merged to avoid duplication of effort and costs.
Look out for the hidden costs of software
Many businesses only consider the purchase cost of software but installation, IT support, training and the time to input data all affect your bottom line.
Seek expert advice
When it comes to accounting software always seek advice from experts with specific skills and experience to help you make the right choices. Ask for evidence of their expertise and take references if possible.