As your business grows, so too does your need for the right accounting software. If you have decided to work with a vendor to create accounting software for your company, rather than opting for an out-of-the-box solution, there are multiple functions you should look for. Ideally, your new accounting software should offer the following:
Works with GAAP
So that the software can adequately handle your company's accounting needs, it should be compatible with generally accepted accounting principles (GAAP). Work with your accountant to identify the processes you use, and make sure that the vendor mirrors those processes and automates them while also staying true to GAAP. Additionally, whether you do cost or accrual basis accounting, you want the program to support both -- that way, if you change, you don't need to look for a new software solution.
Supports multiple budgets, departments and cost centres
Most enterprises have more than one department to keep track of, and you need software that can support that. In some cases, that may mean software that can handle several different subsidiaries, but in other cases, it may just mean the ability to track expenses related to different parts of your business. For example, if you run a restaurant, you may want to track costs separately for the bar and the kitchen.
Maintains audit trails and history
Quality accounting software should maintain a history of your business' accounting records. Ideally, you want the records to be maintained for at least five years to be compliant with the Australian Taxation Office (ATO). You also want to track changes or updates into the system. For example, some software can be set up so that if you click on a certain entry, you can drill down to information related to the vendor or client involved, the username of the person who made the entry or other historical details. Talk with a tax accountant to ensure your business is up to date on tax information.
Works with other applications
In addition to the accounting software features you need, you also want to think about how the software interacts with external software. For example, if you use human resources information software, you may want the payroll or onboarding modules of that software to automatically update your accounting software. If possible, also ask the vendor to use open architecture software. That way, even if that vendor goes out of business, another programmer can configure your software as needed to make changes to support your growing business.
Includes necessary modules
Finally, think about the modules you need. In most cases, custom accounting software includes modules that deal with the general ledger, accounts receivables, accounts payable, payroll, fixed assets, purchasing, cash management and potentially tax document preparation.
If you want to learn more about what your company needs in accounting software, you may want to consult with an accountant. They can help you identify what your company needs, and they can help answer your questions.