Estonia has about 150,000 businesses engaged in economic activity – that means each one of them ought to have accounting software or some other way of keeping accounts.
But what program to choose, and when to make the decision? When a small business is just starting out, that’s not usually a popular time to plump for a pricey and complicated program. Usually companies start off using Excel. They use the spreadsheet especially for payroll accounting, but that only works as long as there is no need to account for overtime, bonuses, contributions to the third pillar of the pension system, and so on.
When these additional factors come into play, payroll becomes more time-consuming and complex. When the company is already up and running, volumes are growing and transactions are plenty, it is hard to keep up with configuring and tracking all the transactions in Excel. This is when it occurs to the business to find a more suitable accounting software. Usually the company will choose from among the most widespread products. If the accounting service is outsourced, the service provider will also know which software to offer and that makes the decision easier.
The following are a few recommendations to consider before opting for a specific software product.
If the company is not big and doesn’t have many transactions, it is not worth it to choose a program with many modules. Each module usually comes for a price and requires extra steps and settings.
But if a company has many different transactions, non-current assets, sale and purchase orders and inventory, it would be better to keep it all in a single program where everything is interlinked. That will give a good overview of accounts receivable and payable. That leads to a recommendation – compare the specifics of each program.
Usually picking several programs is a good starting point for the comparison. Each one has its strengths and weaknesses. One program can give a very good overview of non-current assets, transactions and depreciation or allows purchase invoices to be uploaded and confirmed at a simple click of a button, but the same program might have a shoddy payroll module. If the company does not have many employees and all make a monthly salary, a low-quality payroll module might not be a nuisance, but with over 100 employees working on a shift, there will be plenty of overtime and undertime, illnesses and leave/holiday to contend with, so it’s worth picking something better.
If you chose, say, three programs for the comparison, it’s advisable to talk to the developer, sales representative or experienced user who can give a thorough review of the program.
I especially recommend talking to the program users, since they are capable of adequately assessing the weaknesses and strengths. Experienced users include accounting firms who have an overview of the various software products.
It’s very important to recognize transactions correctly and be sure that each entry was associated with the right account and group. Programs often already have a configuration but there’s a learning curve, fine-tuning and new configurations will be required. Having a specialist who knows the specific program, can configure it and answer your questions within a day or two is a big advantage.
Training and briefings are also really important. Here, too, the communication skills of the product representative or instructor are important. Making the topic comprehensible depends also on who is doing the training – an IT specialist or experienced accountant who can cite practical examples.
In the end, don’t forget that the price of the software, user-friendliness, design and possibility of developing add-ons play a major role in gaining a good understanding of the company’s economic activity and forecasting future progress.
If you have similar challenges and questions, please contact our specialists.
