How to select the best accounting software for your business?

 How to select the best accounting software for your business?
How to select the best accounting software for your business?

As a business owner, you are already juggling a multitude of tasks, but maintaining a firm grip on your finances is always the top priority.

Fortunately, modern technology offers a range of software and automation tools that can simplify various accounting operations, including payment recording, expense tracking, and the Accounts Payable Process.

Sage reports that almost 90% of accountants believe that a cultural shift in the accounting industry is leading to technological changes. By removing the potential for human error, accounting software can help ensure that financial records are complete and accurate, reducing the risk of costly mistakes. Additionally, automation can help businesses stay compliant with regulations and standards. Allstar reports that it takes 6 to 18 months for accounts payable software to pay off the investment made.  

Here’s how you can make an informed decision about which tool to use for your accounting needs:

What are the technologies used in AP automation?

There are various tools with different technological capabilities that can be used for automating the accounts process.  The functions of these tools fall under the following categories.

  • Data extraction technologies: The use of data extraction technologies is a key component of AP automation.
  • Document scanning: Document scanning is a method of digitizing paper documents so they can be stored, accessed, and processed electronically. Scanned documents can be processed using data extraction technologies to extract relevant data points, such as invoice numbers, supplier names, or amounts due.
  • Optical Character Recognition (OCR): OCR detects text from scanned documents and converts it into machine-readable data.
  • Machine/deep learning to assign data to specific labels: These technologies involve the use of algorithms that can “learn” to recognize and categorize data based on patterns and examples.
  • Machine learning to automate tasks like matching invoices to accounts: By analyzing past transactions, machine learning algorithms can “learn” to make accurate matches and reduce the need for manual intervention.
  • Data management: Effective AP automation relies on proper data management so that companies can use data storage and retrieval systems such as databases, cloud storage solutions, or other types of data management software.
  • Payment processing: AP automation can also include payment processing, such as the use of electronic payment systems or payment processing software to streamline payment processing workflows.
  • General-purpose automation tools like RPA: RPA can be used to automate tasks such as data entry, invoice processing, and payment processing, reducing the need for manual intervention and increasing efficiency.

Choosing the best accounting software solution for your enterprise

Choosing the right accounting software can be a daunting task for many organizations. Firms that are transitioning from manual to computerized accounting systems may lack clear guidelines on the key criteria to consider when selecting appropriate software. Find below, some tips on the strategic selection of automation tools and software for accounting operations.

Identify your needs and goals

Before selecting any accounting software, you should have a clear idea of your business’s accounting needs and goals. Consider the size of your business, the complexity of your financial transactions, and the specific accounting tasks you need the software to perform. End-to-end AP solutions may offer a host of benefits beyond the AP manager’s work, including improved vendor relationships, simplified audits, and optimized cash flow. However, a small business may not need that level of automation, in which case, point solutions may be the key. Make a list of all the features you need and prioritize them based on their importance.

Consider the software’s ease of use

An example that is relevant but not directly related is the study conducted by Accenture, which found that 33% of consumers consider ease of use as a crucial factor when purchasing a smartphone. This principle applies to all types of tools. The best accounting software is one that is easy to use and understand. It should not require extensive training or technical expertise to operate. You can also try a demo or a trial version of the software to test its usability.

Check for compatibility with other software used at your organization

Your accounting software must seamlessly integrate with other accounting systems through various integration options like API or middleware. This integration allows AP automation software to retrieve data from external accounting platforms, process it and update information. For instance, the Nanonets’ platform can be integrated with other accounting systems such as QuickBooks and Sage, providing businesses with automation and reporting capabilities while using their preferred accounting software.

Compare pricing plans

The cost of AP software can vary depending on factors such as vendor, features, and business size. Some providers offer subscription-based pricing, while others have one-time purchase costs or tiered pricing options. The investment amount is usually based on the number of invoices processed per month. A scan-and-archive approach can cost a few hundred dollars, while a more advanced model with front-end invoice processing, auto-matching, approval workflows, and archival can cost $100,000 to $500,000. Cloud-based options have implementation fees based on monthly invoice transactions, ranging from $20,000 to $35,000 for over 10,000 transactions per month. Compare different pricing plans and subscription models to find the one that fits your budget.

Consider the access and storage features.

When considering which accounting software to use, it’s important to think about access and storage features. Most accounting programs allow you to control the data and tasks that other users can access, which is useful if you want to give your business partner and accountant full access while limiting your employees’ access to tracking their time and invoicing customers. Cloud-based accounting systems are becoming increasingly popular as they allow you to access your account from anywhere with internet access, making it easier to manage your business remotely. Many also offer mobile apps to help you monitor key information and complete tasks while on the go, which is especially useful for teams working remotely or in the field. If you own multiple businesses, you may want to consider accounting software that supports multiple small businesses under one account to avoid paying extra for separate accounts.

Look for security features

Accounting software contains sensitive financial information that must be protected. Look for software that offers robust security features such as data encryption, password protection, and multi-factor authentication. The software should also provide regular backups to prevent data loss.

Read reviews and rating

Businesses can benefit from the same trend seen among general consumers when it comes to online reviews. According to Business dot com, a staggering 77% of people read online reviews before making a purchase. This highlights the importance of positive reviews, which can also come in the form of personal recommendations when businesses are considering investing heavily in automation tools. These reviews and ratings can be found on various platforms such as software review websites, social media, and online forums.

Check for customer support access

Customer support is essential for any software you use. Look for software that offers 24/7 customer support through various channels such as phone, email, or live chat. You should also check for online resources such as FAQs, tutorials, and user forums.

Nanonets in your accounting automation ensemble

How to select the best accounting software for your business?

Nanonets is a user-friendly AI-enhanced OCR software that is perfect for automating manual accounting tasks. Its wide range of tools, including automated workflows, document verification, 3-way matching, and OCR API, make it an ideal choice for small businesses in 2023. Additionally, Nanonets offers personalized training, annotators, 24×7 support, and a free trial, making it easy for businesses to get started.

With Nanonets, you can automatically upload all your financial documents, such as bills, receipts, and invoices, with easy integrations. The software then extracts data from scanned documents, validates the authenticity of the document, and uploads the data into the system of your choice. This eliminates the need for manually uploading information from receipts and matching the PO, receipts, and invoices, while automating book-keeping workflows and month-end close processes seamlessly.

Some of the advantages of using Nanonets include ease of use, a no-code environment, drag-and-drop automated workflows, automated expense reports, autopilot invoice processing, and the ability to pay vendors using global payment platforms. Nanonets also offers 24×7 support, >95% accuracy of API models, GDPR, SOC2 compliance, and pay-as-you-go plans.

Takeaway

Automation has revolutionized the accounting process, making it more efficient, accurate, and cost-effective. By embracing automation tools such as cloud-based accounting software, businesses can streamline their accounting operations, reduce the risk of errors, and improve financial reporting. Moreover, automation allows businesses to focus on more strategic activities, such as analyzing financial data and making informed decisions. As technology continues to evolve, we can expect more advanced automation tools to emerge, offering even more benefits to businesses of all sizes. It is important for businesses to keep abreast of these developments and adopt automation tools that align with their needs and objectives.

Source: https://nanonets.com/blog/how-to-select-the-best-accounting-software-for-your-business/

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