Business Accounting Software – Why Costs Vary

If you’ve ever searched for just the right business accounting software, you’ve probably noticed that the price varies greatly by product. Many people wonder why there is such a variation in pricing among software products. Accounting software can range from ‘free’ to $100,000+ in price! Well, much like the price for your paid for the vehicle you drive, business accounting software prices vary for a wide variety of reasons. Here are some of the major components impacting the price tag.


Business accounting software ranges greatly in its functionality. The free and least expensive programs offer the most basic of features, like the ability to add customers, vendors, accounts and basic business information. Small businesses and those just starting up should be able to enter their basic accounts payable and accounts receivable information into the system and also pull out basic standard financial reports. The smallest of systems will usually place limits on the number of companies, customers, users, memory, and other data. More complex functions such as multiple warehouse management, customizable reports, serial number tracking and much more are available in mid-market systems, a great option for those who are outgrowing basic systems. Larger companies will typically opt for programs where the source code is available, meaning the actual software itself (not just its features) are customizable.


There are two types of customization when it comes to business accounting software. One type is more basic and allows you to customize components within the software. As systems become more robust, more customizability is offered within the system. The other is, as mentioned above, ‘open source code’ which allows you (actually, a programmer) to customize the actual program to meet your needs. The more customization available, the more expensive the software becomes. This is because more resources are needed to plan for and implement custom programming for your software system. The ongoing support of customized software takes more time and resources, thus the more complex your system, the more your support will cost.


How do you feel as a customer of the software you use? When you contact the company for help, do you feel important? Or do you feel lost in a sea of other customers, trying to get your voice to be heard? Your business accounting software is only as good as its support team. Maybe you need help in setting up your system, trying to find the most efficient way to do something, or solving a problem that seems to be taking you a long time on your own. Your software support team should be able to help you with any of these issues and more. If you have to spend time waiting and hoping for somebody to call you back, only to realize they are not experienced enough to help you, that is wasted time and lost dollars. Opt for support that is experienced and available within a reasonable amount of time. Yes the price tag may be more, but in the end you will save money and keep things running a lot more smoothly.

As with any important purchase you make, many factors should be considered when purchasing business accounting software. Every detail and feature within a business accounting software system costs money to develop, distribute, support and maintain. Instead of focusing on price, be sure that the software you choose can handle your business needs and help run your business for years to come.

Accounting Software Ratios Defined, Part 2

(Continued from the previous post) Using business ratios can help you analyze the financial health of your business. You can use ratios to help compare your business against other businesses similar to yours, and to see how yours compares to the industry averages. By comparing your business, you can identify trends and make changes accordingly. Here is Part 2 of the components of ratio tracking, what they mean, and how they can help your business.

  • Inventory Turnover: This ratio measures how quickly inventory sold. A higher number generally indicates efficiency. However, companies must be careful of stock-outs in situations where too little inventory is kept on hand.
  • Net Profit Margin: Measures the profitability in terms of return per dollar of net profit.
  • Quick Ratio: This ratio is often used to evaluate a company’s immediate liquidity position. A quick ratio that is too low indicates greater risk for creditors and investors.
  • Return on Assets: This is often used as an overall index of profitability. The higher the value, the more profitable your business.
  • Return on Equity: This ratio measures the rate of return on money invested in the company by the owners. The higher the value, the more profitable your business.
  • Working Capital: Because it is a dollar amount, this measurement is difficult to compare with other similar businesses, since you must also take into consideration the size of the business. However, it is a measure of the amount of funds available to purchase inputs and inventory items after the sale of current assets and payment of all current liabilities.

Use business ratio analysis to reveal trends and understand where improvement is needed in your business. Use ratios to make comparisons, understand your business, and stay ahead of your competitors.

Accounting Software Ratios Defined, Part 1

Using business ratios can help you analyze the financial health of your business. You can use ratios to help compare your business against other businesses similar to yours, and to see how yours compares to the industry averages. By comparing your business, you can identify trends and make changes accordingly. Here are some of the components of ratio tracking, what they mean, and how they can help your business.

  • Accounts Receivable Turnover: This ratio measures the promptness of customer payments. Higher numbers indicate the effectiveness of collection policies and procedures.
  • Current Ratio: This ratio gives an indication of a company’s short-term debt paying ability. The higher the ratio, the greater the liquidity.
  • Equity to Asset: A measure of financial position, this ratio measures the proportion of total assets financed by the owner’s equity. A higher ratio indicates better protection to company creditors, since more capital has been supplied by the owners and less by the creditors.
  • Debt to Equity: Measures the extent the company is financed with money borrowed from non-owners. The higher the value of the ratio, the more total capital has been supplied by the creditors and less by the owners.
  • Gross Profit Margin: This percentage measures profitability in terms of return per dollar of gross profit.

Stay tuned for the next post, which covers more ratios terms and what they mean!

Multiple Companies: Three Ways Accounting Software Can Help Manage Them

Once a company grows into multiple entities, there are special challenges to face that were not present as a single company. There are ways you can keep these challenges under control, and one way is to use the features available within your accounting software. Here are some of the ways accounting software can help you manage multiple businesses.

Consolidated reporting.

When you own or manage multiple companies, you may want to look at the financial information of one company on its own, or have the option of combining the financials of several companies to look at together. Having the option to consolidate the financials of some or all companies can be extremely helpful for this reason. When you are able to get a financial picture of each business, you can make smart adjustments as necessary.

Multiple warehouse management.

While one company could possibly have more than one warehouse, it’s even more likely that multiple companies will. In this case, use a multiple warehouse management option within your accounting software’s inventory management system. Keeping track of your inventory by location is more efficient, since you can see with just a few clicks where your items are, and how many. This in turn helps you provide your customers with the products they need more quickly, too!

MICR Check Printing

Managing the accounting for more than one company means printing separate payroll and accounts payable checks for those companies. The problem of having to switch out the check paper each and every time can be solved by using the MICR check printing option. MICR check printing allows you to set up different check designs, and then print them with a special ink, onto blank check paper. It even allows you to print a signature on the check.

These are just a few of the accounting software features that can help you manage multiple companies! Learn more about your accounting software today to be sure you are using it to its fullest capacity, and you might be able to try to something new to streamline your processes.

Shortening Transaction Entry Time

Of course you are always looking to save yourself some time so you can get your job done faster, right? Your accounting software surely offers its own set of time-saving functions. Here are some standard time-saving tools you might want to try out today, in the interest of shortening entry time and getting your job done faster.

Entering dates

Instead of having to type in the date every time you enter a transaction, use the shortcuts available throughout your accounting software. Typical shortcuts for the entry of dates include:

  • Choosing dates from a calendar which can be pulled up on the screen.
  • Auto-fill, a function in which the system recognizes the current month and year. You need only enter the day. For example if it is now February 2012, and you enter the number 25, the auto-fill functions will recognize it as February 25, 2012.
  • Numerical entry. You enter numerically the month, date and year, for example 022512. The system recognizes this as February 25, 2012.

Set as default

If you find yourself selecting the same option each time you go through data entry, you may want to save yourself time by setting that option as the default. That way it appears every time you come back to the data entry screen, and you don’t have to manually choose it!

Tab stops

Are there fields of information you see every time you enter data, but you never use them? You can set up the system to skip those fields! Tab stops allow you to choose which fields the cursor stops at in each transaction entry screen. By setting tab stops, the cursor will only stop at those items you actually use, saving you significant data entry time.

You have enough to do during the day! Let your accounting software help you cut out unnecessary time and shorten your data entry process.