It’s sometimes difficult to believe that just a few decades ago, we were using physical ledgers with hand-drawn T-accounts to manage the finances for huge corporations, let alone small businesses. What we have now in terms of financial technology is a far cry from what accountants were using back in the day. And thank goodness for that. Of course if you’re just starting out, an Excel spreadsheet will get the job done, but when you expand, you’ll need a bit more than the basics to crunch the numbers.
Choosing the right finance tool can save you valuable resources and time. From invoices and payroll, to receipts and reconciliations, there’s a tool for every aspect of small business finance. We chatted to Luana Attard, Truevo’s Head of Payments and Reconciliations to get her take on what to keep an eye out for when you’re choosing a finance tool.
What should an effective finance tool be able to do?
What you need to keep in mind is that a financial system will be used for a range of different functions, such as accounting, payroll, budgeting & forecasting, billing, expense management, cash flow and inventory management.
You should look out for financial tools that provide a comprehensive package that will help you to:
- Identify any grey areas requiring attention
- Optimise revenue
- Make estimations around expenses and wastage
- Identify alternate streams of income
- Help you formulate a healthy budget
- Provide positive forecast estimation (not under- or over-stated)
- Provide good customer service and support
Luana, how does a small business owner go about choosing a finance tool? What should they look out for?
- Your choice will depend on your business model – whether you’re running a product or service-based business. For a product-based business, you’ll need additional inventory software to compliment the accounting system.
- Keep in mind that the system being chosen needs to be able to grow along with your business. Choose a system that has different features for different stages of your business, one that will help you to maintain consistent growth without needing to go ahead with researching and using another kind of software (which can be time-consuming and costly).
- I’ve always preferred systems with incremental costing that depends on your business size and needs. This means that you can pay for what you need, as you go.
- Find a system that can be integrated with other software. This facilitates ease of reporting, analysis and simply makes running your business easier.
- Look for reviews: Is the system user-friendly? Or is intensive training required? Base your choice on how much time you have for aspects such as training and whether the system has a support team that’s readily available to assist you with any glitches.
- Ask yourself: How many people will use this system? Do they have a price per user or bundle pricing?
- I personally prefer cloud-based software as opposed to a downloadable system because it enables remote working. You may need to access your financial system for an emergency – it’s important that you’re able to do that from wherever you are, using whichever device you have.
- I always pay close attention to whether the software provider places emphasis on security. Financial tools need to be super secure – don’t compromise on this.