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Introduction: How to choose accounting software
The accounting software selection process is complex because of the large number of choices available, the strengths and weaknesses of the various packages, and the cost of those packages. The software selection process should be a two-step process in which the first decision is to determine which features are most important, and the second decision is to select the software best matching those important features.
Relevant costs should include the costs of installing an accounting package, operating it, training employees, converting data, and maintaining software and equipment. They are likely to exceed the initial purchasing price of the software package by a large amount. However, purchasing the wrong accounting package is likely to cost much more
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Therefore, selecting accounting software demands careful research, even for the relatively inexpensive personal computer (PC)-based packages available that run on local area networks (LAN)
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. Accounting programs range from sophisticated, expensive high-end packages to affordable, entry-level packages. Careful analysis can reveal unique features and both technical and financial distinctions between products.
There are hundreds of accounting packages available on the market, each with a vast array of features. An ideal entry-level package costs considerably less and should be easy to install and use.
In general, the following criteria should always be considered when evaluating an accounting software package:
* trouble-free installation;
* ease of use;
* comprehensive documentation;
* vendor support; and
* upgradability.
Basic accounting application requirements for most businesses include general ledger, invoicing and accounts receivable, purchasing and accounts receivable, and inventory. A good package should use a standard interface between modules, deliver accurate periodic reports, help validate new data, and offer ease in extracting historical information for trend analysis
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. Other desirable features to look for include flexibility of reporting, inventory control, multi-level password security, automatic macro recording.
Although inexpensive software is clearly not as sophisticated as higher priced, more heavily featured programs, it does offer an effective and efficient mechanism for the small accounting firm ready to move to an automated system. Many low-cost packages are well-suited to the needs of small clients and firms
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. The key criterion for the use of low-cost accounting software is simpler accounting needs (see Appendices 1 and...