I started with a spreadsheet. It was column after column of information I collected (client name, due date, date paid and more) and painstakingly entered, checked and double-checked for accuracy. Keeping track of my accounting via spreadsheet worked when I was freelance writing as a side hustle, but when I expanded and opened my own business, I needed some essential accounting software features that my handy spreadsheet couldn’t provide.
When you need to choose software to automate an essential business task, every aspect has to be considered to make a strong decision. I started to research my options and noticed many programs were similar. It was up to me to decide which features were the most important to my lifestyle. Here’s a list of some essential accounting software features that you might find helpful when you look for a tool to help you better manage your money.
This one might sound obvious, but as a “solopreneur,” it’s vital to spend your money wisely. There’s both free and subscription-based software out there, but before just automatically choosing the free plan, weigh your options. Tax professional Melissa Whaley says, “I recommend to my clients to use an accounting system that is going to fit their workflow and needs. There are some great free tools, but they also require more time investment to keep things accurate. Don’t be afraid to invest a little money in a tool that will do more of the work for you with automatic bank feeds and automation rules for categorizing transactions.”
Are you running your business by manually entering your financials like I was? Besides being super tedious, there’s also so much room for user-error. This added a serious amount of stress to my life. Want to know how I managed it? I found a system that automated most of my accounting for me. A good system will link your bank accounts to your software so that when money comes in and out, your finances stay organized.
Did you sign up for the indy lifestyle because you wanted more freedom? Making the decision to go solo means you likely don’t have your own IT department, or servers to install and host your own accounting software. While there are some programs that can run on your desktop, understand that you’ll only have access to your business financials from that one computer. You deserve better. A cloud-based system lets you keep up with your finances anywhere — even on your phone — so you know exactly where you stand at all times. Whaley agrees, “My business is completely cloud-based because I want to have access to the information wherever I go, including mobile.”
No matter what program you choose, reporting is one of the most essential acounting software freatures, so know what you need before ruling any programs out. In a small business, you might not need all the bells and whistles, either. “As reporting goes, most solo businesses aren’t going to require complicated reports, but a Profit & Loss is the most critical report, and being able to see income by customer is really handy,” says Whaley. “I prefer programs that allow for a balance sheet, but a schedule C filer is not required to maintain one.” However, she continues, “If your business involves physical products and sales tax, then you definitely want a more robust program that will help you track those things.”
No matter how well you learn to use the software on your own, it’s always important to make sure there’s a support team on board and available to help. It’s also key to find out the hours they’re available. If you have a non-traditional work schedule, you need a customer support team that’s also open late at night.
Don’t forget about basic, free training either. Whaley says, “If you’re unsure about your skills in using the software correctly, then it’s worth it to invest in something that offers a good support package and features good training on their website. If a software company doesn’t put out good training documentation, it’s not going to be the most customer-empowering company to work with.”
Are you stressed about researching which accounting software is right for you? Don’t be! There are many smart programs available that will help keep your business financially organized. Plus, know that whatever you choose, if you don’t like it, you can switch to another product.