The most basic systems offer bookkeeping. These systems will keep sales and purchase records and a cash book but little else. That means your accountant will still need to do the detailed work to produce your accounts.
If you want something a bit more than the basic, you have lots of options. A good system should produce your profit and loss (P&L) and balance sheet, invoicing, VAT as well as more detailed analysis – such as average debtor days or stock turnover.
A lot of this information can help you identify areas where your business may be suffering, for example, if your average debtor days are growing. But it can also allow you to be more proactive in growing the business.
As Geoff Wood of accountants Levy Gee explains, “Once it is pointed out that the ability to find the profit of a particular department can be used to find the profitability of some sector in the business, a particular job, a particular partner or manager, then many clients become enthusiastic about how they could use this information to increase the profitability of their business.”
If you do have a finance department or simply want several people in the business to have access to the system, you should also look at whether the package includes networking. However, you might also want to password protect some or all of the functions for added security.
There is also the ease with which a lot of these systems integrate into your general admin system. One of the attractions of a system like Sage or MYOB is that they offer integrated payroll services which saves duplicating work.
But each system will vary as to how easy the information is to retrieve. So there is no point in investing a top of the range system if you are not comfortable with it.