How to choose accounting software

Choosing accounting software is a decision that will stay with you for years to come, because the solution becomes part of your finance team's daily life. Analyzing the options and choosing the right package can be a long and complex job. The goal of this article is to help you make that choice and compare existing solutions, so you can pick the right accounting software for your business.

Map out your needs

Before you start your research, it is important to take the time to list and map out your needs for the next four to five years. For example, if your company wants to invoice in another currency, that need must definitely be taken into account. That is why it helps to classify each need into different levels, such as "optional", "useful" or "essential".

Don't hesitate to consult, on the one hand, colleagues whose activities have an impact on accounting (e.g. quotes, sales, inventory management, ...) and, on the other hand, the IT team. Some companies have strict legal rules on data management, so it is essential to involve the people responsible for it.

In addition, if you work with an external accountant, we strongly recommend asking for their opinion, as they will probably be able to recommend a package as well.

The questions you can ask can be structured around the criteria below. Here is an overview:

Project Management

• Who is responsible for implementing the project?
• What is the deadline for implementing the solution?
• Do you need help from an integrator?
• Does existing data need to be migrated?
• ...

System administration

• How many users are needed?
• Do users need different access rights?
• Do you need to track each user's transactions?
• Can the data be stored online?
• Is the software accessible from any browser?
• Is there a mobile app?
• …

Environment

• What languages do users speak?
• Do you work with multiple currencies (EUR, USD, GBP)?
• Are there multiple legal entities? In different countries?
• Will the software be used in different countries?
• …

Revenue / Customer invoices / contracts

• What will our invoice volume be?
• Are invoices created automatically from orders?
• Do invoices need to be sent directly from the software?
• Do you need to manage customer payment reminders?
• ...

Expenses and supplier invoicing

• What will our invoice volume be?
• Do invoices need to be scanned?
• Is automatic management of accounting entries required?
• Is purchase management per legal entity required (currency, VAT)?
• ...

VAT

• Do VAT codes need to be configured per country?
• Are VAT reports required?
• What about VAT returns?
• …

Banks

• What about reconciliations?
• Is an integration with direct debits required?
• Is an integration with payment platforms required (e.g. VISA)?
• Should it be possible to prepare supplier payments, including validation?
• ...

Other

• Should entries be generated automatically at the end of the fiscal year?
• What about invoice codes (for example FR2018 vs. BE2018)?
• Do you need to manage expense reports?
• What about asset management and audit management?
• ...

To help you make your choice, we have put together a customizable checklist with the key questions you should ask yourself. You can also use this document to run a comparative analysis.

You can download it here.

Analyzing accounting software packages

Characteristics

We don't recommend classifying the accounting packages on the market based only on the size of the companies they target. Here are the main characteristics that set the different packages apart and that may influence your choice:

Online vs “on premise”

"Online" accounting software (i.e. cloud or SaaS) is accessible only through your web browser. Your accounting data is stored by the provider on its own servers, which may be located abroad. Cloud packages have many advantages: accessible anytime and anywhere, automatic updates, no infrastructure costs, data security, fast implementation, etc.

“On premise” (local) accounting packages, on the other hand, run on servers managed by your company or a subcontractor. In that case, the data is stored in an environment that does not depend on the vendor. This approach is usually less suited to companies without strong IT resources, because implementing and maintaining “on premise” solutions requires extensive technical knowledge.

We strongly recommend choosing online accounting software, unless your IT and/or legal department is firmly opposed to a SaaS solution.

Location and legal framework

Some packages can offer many advantages (ease of use, features, integrations, ...) but are not always adapted to the rules of your market. Although there are similarities, accounting differs from country to country, and it is crucial to look at the legal and functional requirements of your country.

For example, make sure the software you choose has the FEC label. Don't hesitate to contact a few companies that use the package you are considering.

Industry

Some accounting packages are available in different versions tailored to specific industries. This can be an important factor, but it should not be the main criterion for your choice.

Integrations

Accounting software can also be part of an ERP ("Enterprise Resource Planning"), meaning a software suite whose different modules are used by different departments of the company. Setting up such a platform has many advantages, including how easily information flows from one department to another (finance, operations, sales, ...). However, this approach requires strong involvement from the different departments and a longer implementation period, which could make rolling out your accounting software more difficult.

Another option is to choose a "stand-alone" solution. In that case, the accounting package works independently and is not integrated with other software used in the company. If you prefer this approach, we recommend looking at the possible integrations between the accounting package and, for example, the CRM used by the sales team. Such integrations make it possible to reduce and standardize data entry and keep data easily up to date.

Ease of use

Keeping the books quickly becomes tedious when the software is poorly designed. Some details (such as shortcuts or a configurable dashboard) can have an impact on efficiency and time savings. In most cases you can request a demo version, and we encourage you to try out the software to check its ease of use beforehand.

Features

Features vary from one package to another, and you won't need all of them. A thorough analysis of your needs (see above) will help you better distinguish between the features you will need and those you need less. In addition, most "online" or “on-premise” packages allow other tools (for example dashboard tools) to connect to them, so users can get all the features they need.

Pricing

Pricing models vary from package to package and can include hidden costs. To estimate the total cost, we recommend taking several factors into account.

Users

The price of accounting software is often calculated based on the number of users.
It is risky to compare the cost of different packages on this aspect alone. Keep in mind that this cost may be only part of the total cost. Also remember that these price differences are often small compared with the cost of an employee... or the coffee they drink each month.

Features

Software vendors often offer different versions, and therefore different prices. For example, the "Starter" plan includes features A and B, while the "Business" plan offers features A, B, C and D. The logic is to get you to start with the cheapest version first. You will then probably need to upgrade very quickly to access the features you need, so it is crucial to map out the features you will need in the medium and long term first, in order to choose the most suitable version.

Volume

The number of units processed can quickly have a big impact on the price you pay. This parameter can cover several things, such as the number of invoices processed, the amount of hosted data, the number of contacts, etc. So take into account your finance department's current and future volumes, so you can accurately calculate the cost of your future accounting software.

Additional services

What training will users need? How will data from your old system be transferred to your new accounting package? What support will you get after setting up your package? These may require additional services from the provider, and costs can add up quickly. To successfully complete the integration of your accounting software, be sure to check out our e-book "Successfully integrating your accounting software".

Contract length

Minimum and maximum contract terms can vary from vendor to vendor: some let you subscribe month by month, while others require a commitment of at least one year. Keep in mind, however, that the contract terms are only part of your commitment. Don't forget to also consider the technical and operational challenges of changing your current accounting package. In other words, transferring data between different packages is complex, so you will probably be tied to your provider's contract for at least one fiscal year.

Conclusion

To choose the right accounting software, it is important to first know your needs well and compare different solutions. It is also important to remember that you will make the best choice if the package is implemented by experienced people. So make sure you surround yourself, both internally and externally, with skilled people, and don't hesitate to ask others for feedback.

To download our checklist, click here.