How To Pick The Right Accounting Software for Your Small Business

New and budding small businesses often purchase standard accounting software developed by Intuit, Freshbooks, Xero or Sage. While all of these brands develop very strong accounting software, small business owners can get burned if they don’t know how to customize their software or purchase the wrong one for their needs.

11321638_sFreelancers and small business owners who aren’t paid in traditional ways – and those who are in creative fields such as advertising, branding or marketing – benefit from software that’s customized for their business model.

To help navigate the most important factors in choosing the right software for your small business, we’ve enlisted the help of Adam Bluemner, the Managing Editor for Find Accounting Software, a service providing free software selection assistance.

Over the last decade Adam has spoken with thousands of companies, helping them achieve business success through intelligent software investment.  Adam writes extensively on ERP, accounting, and business software. Adam is helping us navigate the potential pitfalls in picking your own software and the must-haves for creative, PR, IT and marketing agencies seeking the right software for their businesses.

Bluevine: What factors should PR, IT, Ad and marketing agencies review when they’re picking an accounting software provider?

Adam Bluemner: When purchasing accounting software, it’s of course important to choose a program that matches all of the critical functional requirements.  For PR, IT, and marketing firms, depending on what software is currently in place already, required functionality generally includes some combination of the following:  check writing and expense management, billing, financial reporting, bank reconciliation, budgeting, payroll, and job costing.  Also, these days, many programs built around core accounting modules will include other non-accounting modules like project management, time tracking, and customer relationship management.

But there are a number of other factors outside raw functionality that buyers should consider as well.  Scalability, support, deployment model (SaaS vs on-premise), and integration capabilities are chief among these factors.  The bottom line is that it’s not enough to simply scan a list of feature bullet points when choosing a software program.  In order to protect the investment, buyers need to make sure the solution is well-supported, can scale to meet user and transaction volume growth, will pass data in real-time with other related software, and meets expectations in terms of the hosting model.

Bluevine: What are the top features that PR, marketing and ad firms should look for in their accounting software?

Adam: I’d recommend accounting software that integrates strong time tracking, project management, and customer relationship management functionality.  I think there’s a lot left to be desired when you look at the concept of tracking hours spent on a project in one application, then documenting that work in a different project management program, then making notes about customer interactions on the work in a separate CRM system, creating a bill somewhere else, and then tracking the receivable in an accounting software.  Each program division represents unnecessary labor moving around the same data.  Not only that but there’s an increased opportunity to introduce errors and an increased IT support burden.  Bundling these modules together in a robust ERP type program is preferable.

Bluevine: Are there examples of times when a creative agency came to you that was using a particular product that they needed to drop because it wasn’t meeting their needs as a creative agency?

Absolutely.  There are all sorts of reasons that products go out of favor with their users.  For example, products get discontinued or become unsupported all the time.  Often times a change in the business model will create a requirement for a functionality not provided by the current software.  Changes in management can create new expectations for software.  Sometimes users simply take a look around and realize that there are better options on the market to explore.

Whatever the reason for considering the change, I think the important thing that buyers should be aware of is knowing that it is okay to lean on their potential vendors to qualify the value of making the change.  How much time will it save?  What additional visibility will it provide?  What new business activities will it allow and what’s their value?   An accounting system change is a big move.  Before investing in a new solution, buyers have every right to expect the software seller will also invest in helping to fully justify the likely return on investment.

Adam: How many different accounting software options do marketing companies have to choose from? Why do they need a specialist like you to help them?

Marketing companies have hundreds of software options to choose from.  The range of options, in fact, can seem unnecessary, even comical, at first glance.  It’s pretty easy to think, does there really need to be 500 different choices for software to help my business bill, cut checks, organize financial data, manage projects, and complete other fundamental management tasks?  The reason for the diversity, though, is that there are tons of different combinations of possible needs.  The software that’s right for you should meet your requirements for: OS compatibilities, integration with other IT systems, database preferences, deployment/hosting needs, spending parameters, mobile usage needs, and more.

I don’t know that software buyers absolutely “need” a software matching specialist to buy the right software, but I do think it can help improve the chances of making the right call and make it considerably easier.  In our case, we’ve helped tens of thousands of companies since the late 90’s with our free matching, so we have a lot of experience to lean on.  I don’t think I’m going out on a limb to say that people generally get good at things they have a lot of practice at.  That’s actually one of the main challenges with software selection, since people only do it once every 4 or 5 years.  Ultimately, with our service, what we’re doing is just trying to give buyers a head-start, by matching them up with a handful of options that represent the top choices.

Bluevine: I know that you’ve help tons of companies pick their accounting software, what is the biggest difference between optimal software used by creative agencies such as advertising, PR and marketing firms versus Information Technology agencies?

Adam: One of the main differences that separates the needs of many IT firms from professional services oriented businesses is the increased likelihood of dealing with physical “stuff.”  Whether that stuff is servers, software, or what have you, when you sell things you’re inevitably taking on tasks like managing price lists, dealing with product purchasing and supply chain issues, and keeping track of inventory stock counts. Software needs to provide functionality to support these tasks and not every solution designed for the professional services market does.

But in many other ways the software requirements of a creative agency and IT firm can be very similar.  In fact, many IT consulting firms don’t deal with physical product at all.  It’s not uncommon for an IT consulting firm to bill projects in the same way that a marketing consulting business might.  In fact, from an accounting standpoint, you could easily have IT and marketing firms that are more-or-less structurally equivalent.  Despite the fact they deliver different services, the fundamental accounting tasks remain the same.  Both companies need to track revenue in, manage expenses out, bill based on time, reconcile bank and accounting records, create financial statements, pay employees, depreciate assets, and so on.

For more accounting software demystification – checkout Adam’s tips on findaccountingsoftware.com and follow him on Twitter @FindMySoftware.

This article was first published on September 16, 2014. It was updated on