Having quick and accurate access to good financial information is critical to your business’ success. The right accounting package can make generating this easy; the wrong one will have a financial impact on your business. Sara White sheds some light on how to select exactly what you need.

It’s very simple: businesses that don’t control their finances tightly are in serious danger of going bust. Ocean, a successful mail-order catalogue business, was a nicely profitable company turning over around £10m, but within a few months lost control of its finances, stopped paying key suppliers – who consequently stopped supplying goods – and thereby turned profits into losses.

The company itself went bust, though the assets of the business were bought out by another mail-order company, which continues to trade as Ocean.

Having the right accountancy software system for your business is not sufficient to ensure financial control, but is necessary. There are a wide variety of small business accounting software solutions out there, some with variable add-on options, suitable for all sorts of company from small businesses with simple accounting needs to medium-sized, more complex businesses. As certain types of system are better suited to certain types of businesses, clearly, the key is to get the right one for your company.

The key features

There are a number of features you need in an accountancy software system, such as standard financials, general ledger, receivable and payables, profit and loss balance sheets, and invoicing.

Sales order processing, inventory management, multi-currency, e-commerce transactions, CRM (customer relationship management) and network capability will be essentials for larger organisations, but these are usually sold as modules.

The most basic systems currently on the market offer single-user access and proprietary databases, while the more sophisticated systems use SQL server (a network-based database package you’ll need to buy separately), which results in faster processing power and multi-user capability.

You can upgrade your small business accounting software to more substantial versions of a given supplier’s system, though each step up is quite involved and time consuming. You’ll need a reseller for this: these are not packages to buy off the shelf and install on your own the way you would a new version of Microsoft Office.

Resellers are specialists at installing small business accounting software systems, and will provide consultancy advice on system suitability, installation support (including designing the reports you want from the system) and training. This can take anything from three days to several weeks depending on the complexity of the system.

Most accountancy software packages are pretty intuitive and the tendency to use a Windows-based platform means your accounts staff should find most aspects of available packages familiar. Online training is readily available for the more popular packages, as well as classroom-based training.