Selecting A Small Business Accounting Solution - Five Keys For Success
If are selecting a small business accounting solution soon, now is a great time to be in the market. Today, you can choose from many feature-rich options at affordable price points. But how can you maximize your chances for success when selecting – and implementing – a small business accounting solution? Read on, and in this article, you will learn five keys for success when making your decision.
Focus On ROI, Not Cost
The investment required to implement a small business accounting solution ranges from minimal to potentially hundreds of thousands of dollars. Beyond the price of the accounting application or service, you must consider implementation expenditures, additional hardware that might be required, lost productivity during implementation, and the investment needed to train team members to use the new solution. However, focusing on cost often leads to selecting a solution that ends up costing much more than the purchase price. Instead, the focus should be on the return on investment (ROI) provided.
To illustrate the importance of ROI, suppose you have narrowed your choices to two solutions, costing $50,000 and $10,000, respectively. If the price is the primary consideration, then clearly, you would choose the $10,000 option. But, what if the $50,000 solution provides features that would generate $50,000 per year in labor savings? In that case, it would have a superior ROI. Further, over the long-term, the second option would prove to be the less costly of the two. Clearly, the focus should be on ROI – not cost – when selecting a small business accounting solution.
Identify Broken Processes
A second key driver in the decision-making process is to identify the various broken processes in your existing accounting workflows. Once you identify these items, then you can begin to look for a solution that helps to resolve these issues. When you do this, you will restore lost productivity.
Often, a clear indicator of broken processes is team members engaging in manual work-around solutions to overcome limitations associated with the current accounting application. For example, maybe you observe a team member utilizing a spreadsheet to create a report not provided by the accounting application or to handle recordkeeping associated with inventory or job costing that is beyond the capability of your existing solution. These are indicative of broken processes that you should address when selecting a small business accounting solution. Importantly, resolving these processes will help to increase the ROI of the new solution.
Carefully Consider Reporting Options
One of the most critical requirements of an accounting solution is supplying necessary reports to a company’s management team. And this list extends far beyond balance sheets and income statements to reports customized to each user’s specific needs.
When selecting a small business accounting solution, be sure to consider your reporting options carefully. Does the solution offer the possibility of creating customized reports? If not, does it integrate with any third-party reporting tools that can address this need? If customized reporting is not available, then you will likely end up with broken processes, such as those described in the preceding section.
Additionally, with the emergence of business intelligence (BI) tools such as Power BI and Qlik Sense, you should determine if there are options to integrate BI platforms with your new accounting solution. Given the growth of BI today, an accounting solution that does not integrate with a BI solution is one that might be short-lived.
Cloud Is Often, But Not Always, The Right Call
Almost every accounting software publisher today offers a Cloud-based option for their solution. And, for many small businesses, Cloud is the right choice. But Cloud is not the right choice for all small businesses. Some of the potential advantages associated with Cloud-based accounting solutions for small businesses include reduced reliance on local hardware, lower acquisition and implementation costs, and the ability to access the solution from virtually any location with Internet connectivity.
However, Cloud-based solutions also carry some potential risks and concerns that can make them less attractive than on-premise implementations. For example, a Cloud-based solution is a viable option only when you have access to consistent, reliable, high-speed Internet connections. Further, depending upon your needs for availability, you may find it necessary to subscribe to a failover Internet connection in case your primary Internet service goes offline. Additionally, in many cases, you will not be able to customize a Cloud-based accounting application to a significant degree. Moreover, your ability to create customized reports is sometimes limited in Cloud-based applications. Suffice to say, when selecting a small business accounting solution, you should weigh the advantages and disadvantages of Cloud-based solutions carefully to determine the right environment for your organization.
Embrace Emerging Technologies
When selecting a small business accounting solution, you may be amazed at the number of new technologies that are available to enhance the ROI of the solution. In many cases, now would be a great time to embrace these technologies!
As an illustration, consider Robotic Process Automation (RPA). In summary, RPA uses software to automate rote, repetitive processes that would otherwise be performed manually by a team member. Today, many accounting applications can use RPA to automate data entry of such items as accounts payable bills received from vendors. Imagine the productivity gains provided by scanning a stack of paper-based invoices and having all the data entry completed by an RPA solution.
Another example of an emerging technology to consider in accounting environments is automated workflows to address items such as approvals. With such a solution in place, you can reduce the amount of paper-shuffling in your office and simultaneously improve internal controls. As you are selecting a small business accounting solution, carefully consider the opportunity to increase the ROI by embracing emerging technologies.
The environment for selecting a small business accounting solution has never been better. Competition has forced software publishers to raise the bar in terms of the quality of their solutions while keeping prices in check. Further, you can choose from a robust set of solutions in both Cloud-based environments and traditional on-premise deployments. Yet, in far too many cases, decision-makers will fail to identify and implement the solution that is best for their situation. By following the five recommendations outlined above, you can help to ensure that the solution you choose is the right one to maximize the success of your small business. Best of luck with this process!
You can see reviews of leading accounting software solutions for small businesses by visiting https://www.accountingsoftwareworld.com/software-reviews#smb. Also, be sure to check learning options from K2 Enterprises that focus on small business accounting solutions; you can see these at https://www.k2e.com/training.