Accounting Tech - an Investment or a Liability For Small Business Owners?

Accounting tech is just for accountants, right?

Sure, some tech is best left to the experts. But there are some accounting tech software tools that are simple to use and can be transformative for small and medium businesses too. It’s just about finding and using the right ones for you and your team.

Whether you’ve been in business a while or you’re just starting out (and even if you're still learning about accounting for small business), investing in accounting technology won’t just save you time and money - it can give you peace of mind that your data is safe and your records are compliant. And, of course, with the introduction of Making Tax Digital, you’ll know that accounting software is a ‘must have now’, rather than something you can invest in ‘down the line’.

But how can you be sure you’re making a smart software choice, and not just setting your business up for a technical meltdown?

There are 5 key things you should ask yourself when choosing accounting tech for your small to medium size business. Is this software:

Easy to use?

Before you invest, take a trial of the software to see for yourself how easy it is to navigate, use and automate the processes that you care about. It’s all well and good having a tool that can do everything but is difficult to set up and requires a training program to master how to do the things you need it to do. Most small businesses are actually better off embracing a few different cloud-based accounting tools that do very specific jobs and make those jobs really quick and easy.

Let’s take Dext Prepare as an example. It automates the time-consuming bookkeeping task of accurately extracting data from your receipts and invoices, before sending the information in the right format, to Xero, QuickBooks or whichever accounting platform you choose/your accountant uses. So now it will take you a fraction of the time it normally takes to manage your expenses, and you’ll have an up-to-date, real-time view of your business spending.

Compatible and current?

Of course, if you are going to use a few different tools, they need to talk to each other. Before choosing a new accounting tool, check that it provides an ‘out of the box’ connection to the other software you use in your business, so that all your data can sync and update in real-time. It’s also worth choosing cloud-based software as it’s easy to stay up to date with the latest versions. Plus, you can access your information from any device, anywhere with an Internet connection.

Safe and secure?

Security should come as standard with your accounting software - but that’s not always the case. Be sure to do your homework, especially for cloud-based software, to check that your documents and information will be stored safely, securely, and for the requisite length of time to help you comply with financial record-keeping regulations. Search for terms like ‘bank-level encryption’ and ‘secure network’ operations and you won’t go far wrong. Also, your software provider should develop in such a way that keeps you in control of your data and access permissions at all times.

Supported?

Similar to the point about security above, not all accounting software providers offer technical support. Ideally, you want software that’s intuitive to set up and use, and comes with easy-to-search help guides, videos and answers to FAQs in case you need them. It might also be useful to know that you can live-chat, call or email a real-life human to help you, should you need some assistance. So it’s worth investigating whether your chosen software provider offers dedicated and responsive support.

Affordable?

A key thing to bear in mind is that whilst you can get ‘free’ accounting software, it typically comes at a ‘freemium’... i.e, it will suck up your time and lack the features, functionality, support - or security - required to ensure your financial records are accurate and up to date. So, when it comes to something as important as your business accounts, it is worth investing in. But of course, it still needs to be affordable - you don’t want to be paying through the nose for accounting software that’s built for an enterprise when you’re a sole trader or have a handful of people in your business. Be sure to look for a software provider that offers subscriptions based on the size of your business and how many documents you process a month. The best options will also be easy to upgrade, so they can scale with your business as you grow.

If after reading this, you’re now in the market for pre-accounting software (otherwise known as bookkeeping or finance admin software) - check out Dext Prepare. More than 350,000 small and medium businesses across sectors trust Dext to extract data from financial records and post it to their accounting software, saving them time spent on admin and ensuring data accuracy every time.