Whether you’ve just launched your small business, or it has been up and running for a while now, being in control of your finances is vitally important! Reasons include tracking your accounts, having a clear understanding of your business’s profitability, being prepared for tax season, and allowing you to make better financial decisions for your business. In fact, if you’re not careful about managing your business’s finances, it could lead directly to failure!
To assist with managing your business’s finances, there are many different software accounting solutions designed to help with organising accounts and simplifying financial operations. These accounting packages range from simple programs aimed at assisting freelancers with record-keeping, to more advanced systems that can run your entire business’s finances; including aspects such as payroll and reporting. While choosing the right accounting software package for your small business may seem daunting, here we take a look at which features are important for entrepreneurs and business owners to consider, so that making the right choice for your business is an easy one.
Costs: The best accounting software package for new business owners is one that offers a balance between features and price. After all, the goal is to improve managing your finances, while not imposing another financial burden in the growing stages of your business. Generally speaking, most packages require a monthly licensing fee, although some providers only offer annual packages.
Ease of Use: Running a small business often means wearing many different hats, and for the first while, you may be expected to play the role of “accountant” in order to save costs, so it is important that the accounting solution is easy to set up and easy to use. While some packages may offer reduced features for the sake of a simpler user-experience, the best solution for new businesses will strike a balance between ease of use and powerful features. Remember, the goal for new entrepreneurs is to ensure that they have a hold of their financial situation and remain financially compliant, not to become accountants themselves. Entrepreneurs should aim to outsource their accounting functions as soon as they can afford to do so.
Features: What features an accounting package offers is a big consideration in determining which is best for your small business. While some features are a necessity, it is important to consider the cost of enrolling in a package with rich features that you may not use. Generally, there are six features that small business owners should consider:
Reviews: Since it’s the official home for your business’s financial records, whether you’re a small business or not, knowing that you can trust your accounting software package is vital. Reviews are the best way to gauge what other users think of your chosen accounting software package, allowing you to make an informed decision as to whether you can trust the solution with your business’s financial management
All above data sourced July 2021.
* Estimate calculated at an exchange rate of R14.5 to $1
As an entrepreneur, you need your accounting software to keep up with your growing requirements. But as your business grows, it is a prudent move to consider outsourcing your accounting function or hiring a full-time accountant to manage things for you. In this instance, finding a credible and trustworthy accounting partner will be your priority – and they’ll recommend an accounting software for you to use based on their established business practice. Don’t forget that as your business grows, and needs change, you are always able to upgrade your accounting software and it’s easy to migrate from one provider to the next.
But, whilst you’re still managing this function yourself, our recommendation comes down to the stage that your business is in. If you’re a growing business with momentum and you have some financial acumen, i.e. you have consistent sales, an existing grip on your bookkeeping and have started hiring staff, then XERO is our first choice for a trusted and easy-to-use option for your accounting needs. Most accounting softwares offer the same primary features – reporting, bank recon, cloud storage and more. But whilst Sage or Quickbooks are good solutions, they lack the extras and scalability of Xero’s platform. Here’s why:
Xero has 2.7m customers around the world, so it’s clearly a beloved solution for businesses of any size. They’ve won particular favour with business owners because of the ease of use and countless tech integrations being created on an ongoing basis, all to make accounting as simple as possible. In South Africa, this includes direct/live bank integrations with major banks (with Xero recently announcing a direct feed via API link with Nedbank). This means that your bank feed will be updated by the second, and not every few hours. Then, Xero is currently trialling a solution with the South African revenue service, which will allow their users to integrate directly with eFiling – making VAT submissions even simpler. On face value, Xero appears more expensive each month, but this makes absolute sense given the software/functions that are included – which will ultimately save the user money in the long run! Xero include Inventory Management Software, Payroll, Purchase Order software and more – in all plans from day 1. The other providers require most of these as paid optional upgrades, and their cost is not competitive.
One caveat to the above relates to businesses “just starting out”, and entrepreneurs with limited financial understanding/experience and not able to afford the price of Xero. In this instance, the lengthy features and countless app integrations offered by software like Xero, Sage or Quickbooks won’t matter to you at first. You’ll want to learn the ins-and-outs of cash management and bookkeeping – so require something that’s easy to use, connects to your bank account (even manually), is affordable, offers simple reporting (so you can understand your financial position and generate important statements) and has an invoicing/reconciliation function. You’ll also be able to pay suppliers and bills through your online banking. So, if you’re after a simple, well-priced solution built specifically for the SA small business market, then SMEasy is a great “starter” software for those getting the hang of their business accounting.
At getlion, it’s our mission to see entrepreneurs succeed. We start by helping them make the best decisions for their business, and sort through the clutter of offerings out there! Beyond that, we’ve set out to build South Africa’s leading one-stop mobile app for entrepreneurs, boasting education, rewards, funding, an online B2B marketplace, and more. We’ve also partnered with the country’s leading companies to ensure that our users have access to the best (and often discounted) solutions. Visit getlion.co.za and download the getlion mobile app to enjoy offers from leading partners like Xero (where you can get 50% off your subscription for the first 3 months through getlion Rewards) and others.