23 Feb, 2024
Learn how to choose the right accounting software for your small business in the Philippines. Find the best accounting software for your needs.
Choosing the right accounting software is crucial for managing the financial health of your small business in the Philippines. The wrong software can cost you time and money, while the right can help optimize processes. This comprehensive guide will teach you how to evaluate your needs, shortlist providers, and implement the best accounting solution for your company.
Accounting software helps organize financial information in one place for efficient tracking and monitoring. It reduces manual work and chances of human error and gives you real-time visibility into the financial position. The right software also lets you:
Cloud-based software further offers accessibility from anywhere. Instead of desktop-restricted access, you can monitor the business's financial health from any device.
In short, accounting software helps you efficiently manage finances, ensure compliance, and drive data-based decisions.
With many software companies to choose from, how do you select the right solution? Here are the most important factors for small businesses in the Philippines to consider:
Cloud-based software has become a top choice for flexibility, lower upfront costs, and automatic updates. Leading providers like QuickBooks Online and Xero offer robust features over desktop.
When deciding between the cloud or desktop, carefully assess your connectivity needs. The cloud lets you access data from anywhere but relies on the internet. Desktop resides on office computers without web access worries.
The cloud enables real-time visibility and collaboration across the organization if your business has multiple locations or field staff. Even employees can enter data remotely without needing software installed locally.
However, the desktop works fine for single locations with solid internet, too. Ensure remote access is a minor priority before choosing a desktop route.
Examine what other software you use and ensure integrations—for instance, payroll, e-commerce, CRM, and other tools.
Cloud-based accounting platforms usually offer more integration options compared to desktops. This is a key benefit since small firms use diverse business applications across functions today.
Cloud accounting software can integrate seamlessly with many such apps compared to desktops. This saves tons of manual effort in transferring data across systems.
Everyday integration needs include CRM, payment gateways, bank accounts, POS systems, payroll processors, and inventory apps. Leading cloud accounting platforms offer hundreds of native integrations.
Some vendors also provide APIs and developer resources if you seek particular custom integrations. This extends possibilities based on unique needs.
Evaluate the depth of features you need around invoicing, expense claims, inventory management, project costing, and more. Also, assess the reporting needs and options available.
Accounting software differs vastly in capabilities from basic invoicing, payments, and reporting to advanced inventory control, budgeting, fixed assets tracking, analytics, multi-location features, and more.
So, the first step is identifying key financial workflows you need to manage with the system beyond basic accounting. These could include:
List down all end-to-end workflows critical for financial oversight in your small business. Accounting software that manages your most important processes delivers maximum return.
Understand reporting needs as well. Cloud systems provide real-time dashboard insights and custom report builder tools. See if the basic or advanced analytics capabilities offered suit your requirements.
Also, determine the customization flexibility you need to adopt the solution. Software is generally configurable to meet standard requirements across industries.
However, as processes get complex or niche, you may seek ways to customize certain features and workflows. See if the shortlisted accounting platforms allow customization or modifications where required.
The more accessible systems are tailored to your unique needs, the better they serve specialized requirements as you scale.
The accounting software you choose should also meet your current and future needs as operations grow over a 1-3-year period.
Evaluate the scalability of shortlisted software across parameters like:
Ideally, the platform should grow with your evolving needs across the metrics above without switching systems midway.
While core platforms have limitations, reputed providers do offer enterprise editions or global standards to upgrade to. So, do check scaling options before investing.
It's essential to evaluate accounting software costs in a nuanced manner depending on your situation:
Also, assess special pricing offered for nonprofits, accounting firms, and bulk subscriptions if applicable to optimize software costs.
In essence, map accounting software pricing carefully across growth phases to maximize value. Pay early on and avoid outgrowing core features later.
The accounting software should be easy for you and your employees to navigate without extensive training. Sign up for free trials to evaluate the UI/UX.
Accounting systems come with learning curves. So, what's vital is how intuitive key workflows are designed. Core day-to-day tasks should not have steep learning curves.
Creating new customer accounts, sending invoices, recording payments, or reconciling bank feeds should be straightforward in a good system. You shouldn't need a degree to complete daily tasks.
Complexity often creeps into peripheral features like fixed assets, consolidations, analytics, etc. So, do isolate nice-to-have capabilities for now.
Check reviews and test out customer service channels like live chat, phone support, and online resources of the brand.
This becomes vital because accounting practices keep evolving every few years. It would help if you had assistance from time to time in understanding new compliance standards or troubleshooting issues.
Unless the software provider has solid local support coverage, you'll lose money and time grappling with problems.
So do check parameters like:
Such benchmarks indicate the seriousness of accounting software vendors toward customer empowerment.
Selecting the right accounting software is crucial but also tricky with many options. Here is a step-by-step process to help you evaluate and shortlist solutions:
Start by listing all accounting activities and pain points as of today. This gives you the base requirement.
To make this list, carefully assess which accounting workflows cause maximum manual intervention today:
Across these functions, call out which pain points require automation or simplification.
For example, there is complexity in consolidating payroll taxes manually every month. Such needs form the foundation for shortlisting the apt accounting application.
Also, account for processes you may need to streamline in the next 1-2 years as you scale up. Discuss with your accountant as well.
Forecasting future requirements need not be exact. The idea is to broadly map upcoming growth directions being planned so associated financial workflows get included for evaluation:
For instance, if your agency looks to expand to another city mid-term, you must account for multi-location inventory and accounting needs early on.
If new business models like retail, e-commerce, or subscriptions get added, ensure support for recurring billing, POS, and specialized revenue management in prospective accounting software ahead of time.
While future crystal ball assumptions needn't be perfect, directionally accounting for upcoming key business model expansions helps minimize myopic decisions today.
List the non-negotiable capabilities you need from invoicing, reporting, inventory, etc. This helps filter options.
Must-have features are things with which daily functioning becomes possible. We take certain basics for granted while shortlisting solutions.
Explicitly defining these avoids oversight. For instance, for a retailer - capabilities like inventory management, POS integration, customer credit limits, etc., become must-haves.
Project costing, mileage tracking, and resource allocation features might be vital for a professional services firm—very niche for some sectors.
Compile Must-Have modules related to your situation rather than generic accounting software checklists online. This customization helps narrow down the platforms built specifically for your needs better.
With the above understanding, shortlist platforms that fit current and future needs.
The structured thinking so far helps condense your evaluation funnels better. Still, be open to 4-5 shortlisted options if some vendors have hidden caveats.
Strike a balance across cloud vs. desktop considerations, brands focused on customer support vs. self-service, etc., to mitigate risks through portfolio diversification.
Study how each software fairs on features, integrations to other apps you use, ease of use, customer support benchmarks, and pricing models.
We've already detailed most software comparison parameters, like needs analysis, scalability evaluation, learning curves, integrations check, budget planning, etc.
Now, crystallize insights from that strategic thinking into an easy Excel-like document. This tool helps compare options under common heads for quicker decisions.
Generic vendor brochures tend to look attractive. Create your matching analysis template derived from previous steps for factual assessment. Custom needs should be noticed in glossy brochures.
With first-hand free trials of leading choices, select the accounting platform that meets all your feature needs within a defined budget.
No system is perfect. So, decide based on what works 80% fine after trials since you can customize the rest later.
Reconfirm if this choice will grow in 1-2 years based on business plans. Otherwise, embarrassing change requests start sooner, asking for upgrades.
Budget is the second steering wheel after feature needs. Refine allocations if needed to fund this critical backbone for the long term.
Choosing the right accounting software is a crucial decision that underpins financial visibility and compliance for your Philippines business success. We hope this comprehensive guide and checklist help you evaluate options to determine the best-fit solution.
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Accounting software is a computer program that helps business owners manage their financial transactions, track income and expenses, generate financial reports, and perform other accounting tasks.
Accounting software is essential for business owners as it helps them manage their finances efficiently and accurately. It can save time, streamline processes, and provide valuable insights into the financial health of the business.
Cloud-based accounting software offers several advantages over traditional desktop software. It allows you to access your financial data from anywhere with an internet connection, provides automatic backups of your data, offers real-time collaboration with your accountant, and often comes with additional features such as online payments and integration with other business tools.
Accounting software can help you stay organized and compliant with tax regulations. It can automate calculations, generate tax reports, track deductible expenses, and help you accurately prepare and file your tax returns.
Yes, accounting software is beneficial for small businesses as it helps them streamline their financial processes, track income and expenses, manage cash flow, and generate reports. There are many accounting software options specifically designed for small businesses that offer affordable pricing and features tailored to their needs.
