Every business, no matter how big or small, needs to have some sort of accounting system in place.
But what is the best type of accounting system for your specific business? That depends on a variety of factors, including the size and complexity of your company, the number of transactions you process each day, your level of comfort with technology, and so on.
The Major Differentiating Factors Between Accounting Systems
When choosing an accounting system, it’s important to remember that not every system is the same. While all accounting systems track financial transactions, each system is designed to meet the specific needs of a particular business.
In fact, here are a few key factors you need to consider when it comes to accounting systems:
Your accounting needs
Not all businesses are created equal. In fact, the needs of a small business are vastly different from the needs of a large enterprise.
That’s why it’s important to select an accounting system that meets the specific needs of your company.
For example, if you’re a small business, you may not need an accounting system that can handle multi-company, multicurrency accounting transactions except you do run international operations.
But if you’re a larger company, those features may be essential.
The size of your company
If you run a small business with only a few employees and limited sales volume, you may be able to get by with a simple bookkeeping system that tracks your expenses and income without the need for a feature-packed system.
But if your company is larger and more complex, you may need a more sophisticated system that can handle inventory tracking, asset management, monthly consolidation, and other tasks.
The point is this: an organisation with multiple branches or a finance team with a large number of finance employees who will actually be using the system will need something different than a small team of two people who are just keeping the books.
The type of transactions your company processes
Some systems are designed to handle a large number of transactions each day, while others are more suited for businesses that process a limited number of transactions.
If your company falls into the latter category, you may not need a system that can handle high volumes of data.
But if your company is growing and processing more and more transactions each day, you’ll need a system that can keep up.
The level of comfort you have with technology
Some financial management systems are more complicated and powerful than others and may require greater technical knowledge to operate.
So if you’re comfortable with technology and want to take advantage of all the latest features, you may want to consider this sort of accounting system.
But if your team is not as confident in their tech skills, you may prefer a less sophisticated technology.
For instance, whether you want an on-prem or cloud-based system will depend on how confident you feel in your ability to manage and use the technology.
No matter what type of accounting system you choose, be sure to find one that meets the specific needs of your business. Otherwise, you may find yourself struggling to keep up with your accounting and financial management obligations.
Once you’ve assessed these factors, you can start narrowing down your choices.
The right accounting system for your business can make all the difference when it comes to making sound financial decisions, reducing manual tasks, accessing data, and staying in compliance with government regulations.
Get in touch with us today to find out more about the right accounting system for your business.