Bookkeeping software is essential for small businesses. It saves a considerable number of headaches come tax time and sometimes in between. Often, it’s not as expensive as hiring someone to manage your books. If you’re bootstrapping your business, that is a significant consideration. However, there are some critical factors in determining what software packages benefit you the most.
Employees or No Employees?
So, the first question with bookkeeping software is about the structure of your business. Whether or not you plan to have employees makes an enormous difference. Even the possibilities of contractors over employees need consideration.
With both employees and contractors comes payroll. Payroll requires keeping track of how much everyone makes, letting them access their paystubs, and being on top of that aspect of your business. Additionally, both require tax documentation. Employees require W-2s each year, and contractors get 1099s if you paid over a couple hundred dollars. You, as the owner, are also responsible for filing a copy of these with the government.
That all sounds like a lot of work, right? The thing is, most bookkeeping software can do the figuring, access, and perhaps some of the government filings as well. It’s just more expensive than the package for a sole proprietor. Fortunately, many bookkeeping software packages let you start in one package and upgrade or downgrade depending on which services you need. That makes it more about picking the right options for you and less about locking in a service package for a year.
Invoicing or No Invoicing?
Regardless of how large you want to grow, you’ll always need invoicing. The question is whether you want it to go through your bookkeeping software, which will undoubtedly have the option available. Depending on how you’ve set up your front-facing processing, it may be more confusing to your clients to receive a separate invoice.
Let’s take a look at how many customer service management systems work. They’re marketed to you the business owner as the all in one solution for seamless customer service. The systems handle onboarding, contracts, invoicing, ongoing interaction, and more. It may make more sense not to worry about invoicing from bookkeeping software to keep your experience seamless.
Cost of Bookkeeping Software
Another important bookkeeping software consideration is cost. Most of the options will offer a sign-up deal and then go to their regular price. This change can make the long-term value hard to calculate, in addition to the software companies changing their rates over time.
Perhaps the most crucial factor when choosing a bookkeeping software package based on cost is calculating what each year will cost. With a flat yearly fee, it’s straightforward. With a subscription, it’s a calculator problem. Additionally, subscriptions can be difficult to cancel, leading to you paying more than you need to if you decide a bookkeeping software is not for you.
Final Thoughts on Bookkeeping Software
Bookkeeping software has a wide variety of choices available, and choosing one can be an overwhelming process. Once you find the right one, it becomes an inherent part of your business. Even if you decide you need an accountant after all, having the records from a bookkeeping system is an immense help.
Q1 is an appropriate time to swap bookkeeping software. It ensures that you get the entire tax year into your records without a hitch. So, if you found you didn’t use a lot of your current software’s features, or you disliked how it worked, now’s the time to research. Plus, if you’re new or kept records by hand, now is a fabulous time to investigate the options.
Bookkeeping for small business doesn’t need to be a herculean task. You just need it to work.