Overview

Cash flow is one of the top reasons businesses fail, so choosing software that will help you keep on top of your finances is essential. This is also one of the hardest applications to change, so it makes sense to do your homework, and pick something that will work for you as you grow. That said, if you’re finding your current accounting software isn’t working for you, there’s no time to waste in moving to a new one.

Critical functions

The sorts of things you need your accounting software to handle include:

• Accounts payable (raising purchase orders and paying invoices for goods you buy)

• Accounts receivable (if applicable - raising quotes and invoices for goods you sell)

• Reconciling transactions (bookkeeping)

• Managing expenses, including employee expenses

• Calculating tax liabilities, including VAT, Employers’ National Insurance, and Corporation Tax

• Strategic planning, financial planning and other financial analysis

• Budgeting and financial control

• Treasury functions like cash flow management, investments and foreign currency risk

• Capital expenditure and asset management

This is a long list and is not exhaustive. This is one area of software where it really pays to do your research. If you’re happy with your bank and/or accountant, ask them what products they recommend (see ‘important integrations’, below).

Important integrations

To get the most out of your financial accounting software, and to minimise errors and waste caused by manual rekeying of data, you’ll probably want to integrate your financial accounting software with your bank account and your accountant, if applicable. This allows the software to do the donkey work or reconciling transactions and flagging anomalies. Picking accounting software that has an appropriate integration with your bank account (or vice versa) can be a good place to start when narrowing the search.

You will also want a feed into the accounting software from your POS system (for transaction data), as well as any e-commerce system (like order ahead). A direct feed from your payroll system will also ensure labour costs and the related tax, pension and other overheads, are accurately recorded and reported.

With so much business-critical and commercially sensitive data, you must ensure any integrations are secure.

Users

The number and types of users will naturally depend on the size of your business, but you can expect anyone who works on finance tasks to need access to the financial accounting system. You may also need to grant access to your accountant or bookkeeper (see above).

You may want to grant read-only access to functions like branch or area managers, for them to access reports on their venues’ financial performance.