Guest Post written by Paul Johnson, CPA, CGMA, MBA
Disclaimer: Guest posts don’t necessarily reflect the views of G2 Crowd.
There are more options today than ever before when it comes to accounting and financial management software solutions for organizations. The large number of options available makes selecting the solution that is best for you a challenging task.
While the evaluation and selection process is outside the scope of this post, I will provide information on a number of options currently available. Coverage of solutions is not all inclusive, but rather meant to give you some guidance as you set out on your search and evaluation process.
During my career, I have had the opportunity to work with many different types of organizations searching for their next accounting or ERP software solution, and the fact remains the same: a full evaluation process is the best way to select the proper solution for your organization.
Depending on the type of organization, consideration should be given to many factors. For example, are you a wholesale distributor with specific needs for inventory management integrated with a shipping solution, a manufacturer with detailed bill of materials requirements including revisioning history and resource planning functionality, a not-for-profit with encumbered funds, a construction subcontractor, or perhaps a retail establishment?
While all of the organizations mentioned may have similar basic accounting needs, there is not one solution that will be right for all of these organizations. However, before we talk about any of the specific types of solutions available let’s first take a look at some basic terminology that is important to know in any financial software search:
- Accounting Software: This is a solution that has a general ledger incorporated into the application and allows the user to record and process accounting transactions. Typically this will include functionality to assist in main accounting areas of sales, accounts receivable, accounts payable, cash management, payroll and financial reporting.
- Enterprise Resource Planning Software (ERP): These software solutions will incorporate the functionality of general accounting software and build upon this, often substantially, to provide financial and operational management tools to many departments of the organization. ERP systems will typically provide for functionality such as inventory and distribution management, manufacturing, human resources management, powerful budgeting, fixed assets and others.
- On-Premise Solutions: Software that is installed on a server, or computer, at your organization’s location.
- Cloud Solutions: Broadly defined, cloud solutions encompass those that are accessed via the internet. Typically an organization pays for the software services needed from a third-party provider that owns and manages the infrastructure. In many, but not all situations, the services are accessible via a web browser.
- Software as a Service (SaaS): This is a type of cloud solution which is provided through web browser access, generally on a subscription basis. The user does not need any local hardware or software in order to access and utilize the services. While all SaaS are considered cloud solutions, not all cloud solutions are SaaS.
With a good understanding of the differences in how accounting and ERP software are provided, let’s take a look at some of the options currently available to organizations. I will start with small business options and work towards the options available to medium-sized organizations. Large, enterprise organizations are excluded from this discussion.
On-premise solutions for small businesses solutions are known to be easy to use and meet the main requirements of many small businesses. As they are on-premise solutions, this means there will be required software updates, and associated software costs, as new versions are rolled out.
If you don’t want to worry about annual enhancements and software updates then I encourage you to take a look at the SaaS solutions available for small businesses.
Medium-sized businesses and small businesses with greater needs have many options as well. These solutions are going to fall into the ERP category and can be acquired through on premise, cloud or SaaS licensing.
There are also options to pay a monthly subscription to use many of these solutions that are hosted by the software developer or other third-party partners. While these are technically cloud options, they are not SaaS solutions.
If you haven’t already checked out G2 Crowd’s Grid for the best accounting software, I encourage you to do so. The dynamic rating tool provides a great look at how users rate the software based on their personal experiences.
With the many options available to organizations when considering accounting or ERP software, above all else, it is important to determine the needs of your organization both now and anticipated in the future. While the software selection process will take some time, selecting the right software for your organization should pay for itself many times over.
If you don’t feel that you can invest the time necessary to fully evaluate the options, then I encourage you to enlist the help of an accounting software professional. They can help you perform a thorough evaluation of the options to ensure your specific requirements are being met, as well as ensure any implementation services are performed accordingly.
About the author:
Paul Johnson is the Co-Founder of Atlasphere Consulting, which provides outsourced accounting services plus accounting, ERP and CRM software consulting. Follow him on Twitter at @AtlasphereCons.