Accounting software: spoilt for choice

The diverse range of functional and easy-to-use accounting software packages now available are a blessing for time-poor business owners. Yet with so many new software options, which is the right one for your business?

The first thing you need to decide is what platform will suit you best – desktop, hosted or cloud-based.

Desktop

Examples: Cashflow Manager or MYOB (original)

Description: Software you install and use on your home or office computer. You buy the software from a shop in a box with a code, which you use to download the software from the internet or from a CD.

Benefits: There is a wide choice of desktop accounting software programs all of which have multiple functions. Other than for the initial download, you don’t need access to the internet so you are not dependent on a good internet connection.

Limitations: You will need to manually install updates each year (especially tax tables) as well as regularly back up your information. It is also more difficult to use your software in multiple locations or to share your information with your advisors.

Hosted

Examples: MYOB AccountRight 2016 or Reckon Hosted.

Description: Software you download from the internet which you install on your home or office PC. Unlike desktop programs, your information is stored in the cloud rather than on your computer’s hard drive.

Benefits: Users in other locations, such as your advisors, have instant access to your information. You have the option to either work offline or online. If you work offline, your changes will be synced the next time you log on to the internet.

You can set up direct bank feeds avoiding the need to manually enter every bank transaction. Bank feeds give you and your advisor an up-to-date snapshot of your business. The hosted software also allows you to store documents against the transaction such as invoices for items you have purchased.

Limitations: Like the desktop option, you will need to manually download software updates. The difference is, you will receive a prompt when it’s time to update. You can then easily complete the update online.

Cloud-based

Examples: Xero, MYOB Essentials, Reckon One.

Description: Similar to internet banking, the software is accessed by logging on via the internet using a password and username.

Benefits: The software is always up to date, so there is no need to download updates. You can log on from any device that has an internet connection, making it feel less like an accounting program and more like accessing a website. You can set up bank feeds as well as prepare and send invoices.

Limitations: Regional areas may not have the access or speed of internet required. Although most cloud accounting software providers have reliable systems with limited downtime, if there is no internet there is no accounting – unlike hosted programs, you can’t work offline. As cloud accounting programs are still relatively new, some also don’t have all the functions that hosted and desktop programs offer.

One of the biggest advantages of hosted and cloud-based accounting programs is your accountant has instant access to your information, saving you and your advisor considerable time. Your advisor can simply log in and answer queries in real time or fix anything as needed.

Your choice of software depends on your particular requirements and preferences. Cloud computing is the way of the future. So if you have reasonable internet access, and the software meets your needs we recommend an online program as a straightforward and efficient option.