Episode 003 – Selecting The Right One For Your Business (The Right Accounting Software)
About This Episode
If you’re in any small business groups on Facebook or LinkedIn, you’ve probably seen this question or if you’re running a business, you may have asked this question yourself.
“What accounting software should I use?”
The question is easy enough but it’s complicated at the same time as it requires a little more information before a thoughtful recommendation can be offered…
Before pointing any client (or group participant) in any direction, I ask a few questions…the answers help me figure out what software might be the best fit for that person and their business. Both now and in the foreseeable future.
Mentioned in this episode:
- What to ask yourself to narrow down the alternatives
- My top 2 accounting software recommendations
- How to grab a cents chat if you’re stumped & need help selecting the right software for you & your business
Highlights of this episode:
- 01:02 The question of the hour – What accounting software do you use? What accounting software should I use?
- 02:34 What information you need to provide to get a proper accounting software recommendation
- 04:00 Our case study – starting with the assumptions
- 04:45 What to consider before diving into the features and benefits of an accounting software package
- 05:03 What my questions are (rapid fire style)…What’s in your tech stack?
- 06:08 What’s your techno IQ?
- 06:34 What are your growth plans?
- 06:40 What are the minimum features you need from your software selection?
- 06:54 My top two accounting software recommendations
- 07:04 What to check before you commit to one
- 07:51 Why you want to automate your transaction information
- 09:11 Are you actually going to USE it?
- 10:55 Invitation to a Cents Chat
- 12:15 Episode recap/summary of all the goods
- 14:32 The 5 questions
- 15:04 Top Tip – BE CONSISTENT
Episode 003 - Selecting The Right One For Your Business (The Right Accounting Software): Transcript
This is Episode Three of the 2 Cents Business Podcast. Hey, welcome back. It’s me, Joyce, your host. And in today’s episode, we’re going to talk about one of my absolute favorite topics. I’m being a little sarcastic here. But we’re going to talk about cloud accounting software, the questions you should ask yourself to help you decide on the right one for you and your business. And the minimum features that I think you should look for before you go all in on one software. So without further ado, let’s get started.
So this is kind of, sort of, a q&a episode. It’s an indirect one in that, and this is why I say it’s kind of sort of a q&a because this is a question that I see coming up in a lot of small business oriented Facebook groups. And when I say a lot, I am mean a lot.
And what happens it goes a little something like this, I you’ll see a random post from a random business owner that you know, you don’t know very much about and they just flatly ask, what accounting software do you use, or what accounting software should I use?
And now I admit this question kind of annoys me and it’s not necessarily the question itself, but it’s how it’s phrased because it’s completely general.
And when I answer my answer is, it depends. And the answer might come off a little bit snarky and a little bit, you know, have a side of smart assery or smart-alecky and it’s not my intent, seriously, because the question isn’t necessarily a dumb question. But it can be phrased better a lot better, because my answer requires additional information that you could have provided in the first place.
But I’m not here to bash the questioner, I am actually glad that you want accounting software. So when I say it depends, I’m really not being a jerk. I just need more information from you, about you and your business.
So for instance, um, I just believe that every business is as unique as a snowflake. No two are alike, because they’re run by completely different personalities. Like you could, you could have an online t shirt company, but the owners are different. Therefore, the businesses and how they are run are completely different.
So we like there are no snowflakes that are like, so no two are like, but there might be some characteristics about you or about your business that might make one software better than another for you, and how your mode of operations is.
So that makes the recommendation different. So I can’t just flatly rock up into a group and just be like, Well, you know, you should be using this or you should be using that without asking additional information.
So again, I’m not being a jerk. I don’t think it’s dumb question. I just would love for you to provide additional information, provide what your needs are, so that you can really get a recommendation that fits you and your business.
So for the purposes of this episode, I’m gonna make a couple of assumptions about the person asking the question, so I’m going to assume that you’re a side hustler, or freelancer, or solopreneur that basically you are doing this by yourself.
I’m also going to assume that you are probably an online entrepreneur or some sort. And then last but not least of my bucket of assumptions, I’m going to assume that you are looking to do it yourself, at least for now. So based on those assumptions, I still have more questions.
So before we start worrying about features and benefits of an accounting software, here are a few more things we need to consider during the selection process. And I’d asked you questions something like this.
So Mr. Or Ms. business owner, how are you sending and receiving money? like where do you bank? What payment processors do you use? Do you use PayPal? Do you Stripe? What CRM might you use? Do you use Dubsado? Do you 17 Hats? Are you an online based entrepreneur? Do you have is are you selling via your website? If so, do you have a shopping cart on your website? Are you using something like Shopify? Or are you using something like Moonclerk? And wait, what (website) platform are you using? Are you using Squarespace? Or are you using WordPress?
So those are the type of leading questions that I need to know answers to that kind of form, what I call your tech stack. So we need to know the answers to those questions.
Now, second question, How comfortable are you with technology and and making sure that the software and he said tech stack plays well together and either directly or indirectly using something like Zapier or If This Then That (IFTTT). What are your growth plans? Will you need additional users? Will you need to invoice from your accounting software directly? Will you need customized reports? Because in some software (packages), all of those things are easier said than done and might be easier and one than the other.
So with all that said, I have two regular frequent top recommendations that is Xero Accounting and QuickBooks Online.
My recommendations vary based upon the answers to all of the proceeding questions. And then before I dive into one or the other, based upon what your tech stack is, I would check their (respective) add-on marketplaces to make sure that you can either directly connect with the software or you can, and then the second place I might look is to look at Zapier or If This Then That to see if there’s an indirect way to get information from whatever you’re already using into the accounting software.
The reason why all of that is important is because connection is important when it comes to the money stuff. And the the connectivity is so important, because what you want is to minimize manual movement of the transactional information in and out of your money system. And by transactional, what I mean is that the actual transactions of your bank account or your credit card account.
So those are like the basic building blocks of your bookkeeping system. So you want those those pieces of information to come directly into the accounting software without you messing around with it.
And so the reason why that is, and the reason why you want to minimize the manual nature of it is because the more times that you, and by “you”, I mean the proverbial you as in any human; the more times a human touches the information, the likelihood of things going awry. The likelihood of the information becoming corrupted. And the last thing you want to do is to have your money files become corrupted. Now, that’s not to say that the tech doesn’t break or that your bank feed or your credit card feed won’t break and can’t break, because they do all the time but you can always reconnect them.
The thing is that by skipping the manual movement of data, it gets you closer to real time financial information. And when you get closer to real time financial information, you can pivot on a dime in your business because all of the information is as fresh as it can possibly be. You know what your bank balances are, you know who owes you what money (as recent as) five minutes ago because you have access to the information in your money system.
So last but not least, the last question that I ask is, are you actually going to use it because it makes absolutely no sense for you to subscribe to an accounting software package and you’re paying a monthly subscription, and you’re not going to use it.
And to get the most the absolute most out of them, you need to actually be recording and reviewing the transactions on a relatively frequent basis.
So if you, you know, if you need help, kind of going through all of this information, and answering the questions and kind of diving down and figuring it out. If you need need help selecting the right software for you, then like I tell people in these groups, I’m happy to have that conversation with you. So you can either shoot me an email or schedule a Cents Chat with me and we can talk about it. So you can email me at [email protected]. Or you can schedule a Cents Chat at thecommoncents.com/consult.
So as you can hear, I’m not really that much of a smart alec when I say that it depends or when I rock up into a comment section and instead of actually answering the question, I answer with a question. All of this and more kind of goes through my head as I am mentally putting the pieces together to figure out what recommendation I would actually gave you for accounting software.
So to recap, when you are looking for the right one for you, as far as the accounting software, when you’re looking for that, these are the things that I advise you to consider…
What kind of business do you run? Do you have inventory? Are you a service based business?
Are you looking to do it yourself? And if you aren’t, then (and I didn’t mention this before), but if you aren’t looking to do it yourself, I would just go with whatever your accountant of choice uses because ultimately they are going to be doing the day to day bookkeeping and accounting, so you should lean on their expertise. They may have a preference, they may specialize in using a particular software package over the other. For instance, I almost exclusively use Xero with all of my clients. And I occasionally use QuickBooks if they’re already using it. But I sometimes actually take them out of QuickBooks and put them on Xero. But that’s a whole nother conversation.
So the third thing that I would have you to consider is how are you sending and receiving money? Where are you banking?
What is already in your tech stack? Whether it’s your payment processors, CRM project management? How you invoicing people, those are all the things that you need to consider.
Also, How comfortable are you with the technology? How comfortable are you with actually doing the nuts and bolts of the bookkeeping yourself, will you be able to not only integrate the accounting system into your system, whether that’s directly or indirectly with something like Zapier, but will you be able to troubleshoot that integration when and if something breaks?
And last but not least, what are your growth plans? Will you need additional users? Will you need customized reports? And will you need to coordinate the information with your tax professional?
And so those are the questions again,
The first one is, What kind of business do you run?
The second one is, Are you looking to do it yourself?
Third, how are you sending and receiving money and what’s already in your tech stack?
Fourth, how comfortable are you with the technology? Will you be able to integrate the accounting software into your system either directly or indirectly?
And fifth, what are your growth plans? Will you need additional users? Will you need customized reporting?
So once you have the answers to all of that you can pick one and use it don’t pick one, start using it and hit pause. Keep at it because for as long as you own your business, this is a thing this is part of your being. This is something that you need to continue to use, you need to make sure that you are revisiting your money numbers on a regular basis.
So I hope you now understand how loaded of a question just that simple phrasing is, you know, “what accounting software should I use?”
I hope this has been helpful. Now if you have enjoyed this episode, and you’d like to hear more, please hit the subscribe button.
If you have have a question that you’d like me to answer on upcoming episode, send me an email to [email protected]. So until next time, have a profitable day and I will see you again on Monday.