Choosing the Right Accounting Program

When you are first considering going into business you never even think about an Accounting Program. Then usually just before you start someone says, or you read something that says you need an accounting program, because there are ATO requirements that Small Businesses have to comply to.

Or you are an established business and your current accounting program doesn’t quite do what you want it to do, or you are hearing a lot of buzz around cloud accounting programs and how they make things easier.

But how do you choose the right Program? What do you need to consider when choosing one? Where do you find out what the right one is? Well most Small Business Owners ask friends and just go with one that they are happy with, but I wouldn’t recommend that you do this. You need to get an Accounting Program that suites your needs and your businesses needs.

At times it may seem a bit overwhelming all the things you need to consider when choosing your Accounting Program.   But I have tried to keep things as simple as possible for you to follow so that you can make the right decision.

Why do you need to use an Accounting Program?

In July 2000 the Australian Government introduced tax reform measures, which changed the way Small Businesses did their bookkeeping. There were several components to the reform, the main being the Goods and Services Tax (GST) and the Pay As You Go (PAYG) system of tax installments. For most businesses this meant that the liability for these and other business transactions needed to be reported quarterly on a Business Activity Statement.

These tax reform measures gave small to medium business three main reasons for using Accounting Programs.

Record business transactions to

  • Calculate a traditional Profit & Loss statement and details to complete an Income Tax Return
  • Calculate Total Sales and Purchases of various Tax Types so that the correct amounts can be entered in the Business Activity Statement as required by the ATO
  • Calculate the various types of PAYG tax withheld so data can be entered on the Business Activity Statement

This also ensures that you have data you can use to analyze your cash flows, accounts payable and receivables and liabilities to the Australian Tax Office.

The quarterly, monthly for some, nature of the Business Activity Statement means that business records must be recorded regularly and accurately. An Accounting Package can reduce precious time spent complying with the Tax Office requirements and lets you get back to running the business.

I see this as all being to your advantage because you have up-to-date data at your fingertips with hundreds of reports available to analyze your financial position. Not many Small Business Owners do this, but for the ones that do it makes a huge difference to their knowledge about their business.

I also believe the introduction of the GST & BAS has been a good thing for Small Businesses as it has had to make the Business Owner more aware of what is happening within their business.

Assessing your needs

The first thing you need to do is assess your business and work out what you need and don’t need in an accounting program. Ask yourself these simple questions. All you have to do is answer yes or no to them.

  1. Do I employ staff?
  2. Do I want to track inventory?
  3. Do you have multiple bank accounts?
  4. Do you operate using foreign currency?
  5. Does your business have multiple departments that you want to track separately?
  6. Do you have multi businesses that you want to track separately?
  7. Do you need your accounting program to link with other software?
  8. Do you need to keep a detailed record on customers including what they buy, how often they buy, when they buy etc.?
  9. Do you want to be able to do quotes within your business?
  10. Do you want to be able to do purchase orders within your program?
  11. Do you want to be able to do time tracking and billing?
  12. Do you want to track Aged Payables?
  13. Do you want to track Aged Receivables?

For the ones you answered yes to, you need to make sure that the Accounting Program that you choose has these components.

If you have an existing Accounting Program but are looking at changing to something new, I would advise to go over the questions above and then also answer the following questions.

  1. What doesn’t’ my current program do that I wish it could?
  2. What would I like my accounting program to do if there were no constraints on budget, time or technology?
  3. What (if anything) can my current program do that I don’t believe could be done in a new system?

Talk to your Accountant/Bookkeeper

After you have gone through and worked out what you think your business needs, you then need to talk to your Accountant and/or a Bookkeeper, or even your Small Business Advisor. Your Accountant is the person doing your Tax Return at the end of the Financial Year, it is pointless you having and Accounting Program that he/she doesn’t know how to use or isn’t as proficient in it as he/she should be.   It is the same with your Bookkeeper, if your Bookkeeper can’t use the program you choose then you either have to replace your bookkeeper or you have to change programs. So take the time to talk to them both, it will save you time and money in the long run.

Also spend a bit of time talking to friends who own businesses. Ask them what they like/dislike about the program they are using. Is it easy or is it hard? How much time do they take each week to do their bookkeeping?

How capable are you?

When choosing an accounting program you need to understand your capabilities. Do you love computers? Or do computers scare you? Do you learn new software easily? Or do you become frustrated with new software and give up? Do you have time to manually enter everything into your system? Or would it be best for things to automatically be entered via bank feeds and rules?

You also have to look at how comfortable you are with your file being ‘in the cloud’, or would you prefer a desktop version of an Accounting Package? Do you want to track payables/receivables? Do you know the difference?

Software Options

There are many software packages on the market that allow Business Owners to successfully do their bookkeeping. By the time you get to this stage you will have heard of quite a few and be totally confused about what you need. This is when you drill down on each software that was recommended and work out if it is right for you.

Some commonly used Accounting Programs used by Small Businesses are:

  • MYOB
  • Quicken (Reckon)
  • Xero
  • QuickBooks Online
  • Sage
  • Cashflow Manager
  • Saasu – online

Over the coming weeks we will look at each of these programs in detail to help you find the program you need.

Please remember, if you have a question for me, go to the ASK page of my website and you will be instructed how to ask me your question.

Also, I would love for you to spend a few moments doing my short survey. If you could click HERE and do that for me that would be awesome. J

Question: What Accounting Program do you use and why?




Please note: I reserve the right to delete comments that are offensive or off-topic.

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