Generic Considerations before Sourcing an Accounting Software

The following factors are usually taken in considerations before sourcing

an accounting software.

1 Flexibility

An important consideration before sourcing an accounting software is flexibility,

viz. data entry and the availability and design of various reports expected from

it. Also, it should offer some flexibility between the users of the software, the

switch over between the accountants (users), operating systems and the

hardware. The user should be able to run the software on variety of platforms

and machines, e.g. Windows 98/2000, Linux, etc.

2 Cost of Installation and Maintenance

The choice of the software obviously requires consideration of organisation ability to

afford the hardware and software. A simple guideline to take such a decision is the

cost benefit analysis of the available options and the financing opportunities available

to the firm. Some times, certain software which appears cheap to buy, involve heavy

maintenance and alteration costs, e.g. cost of addition of modules, training of staff,

updating of versions, data failure/restoring costs. Conversely, the accounting software

which appear initially expensive to buyers, may require least maintenance and free

upgrading and negligible alteration costs.

3 Size of Organisation

The size of organisation and the volume of business transactions do affect the

software choices. Small organisations, e.g. in non-profit organisations, where

the number of accounting transactions is not so large, may opt for a simple,

single user operated software. While, a large organisation may require

sophisticated software to meet the multi-user requirements, geographically

scattered and connected through complex networks.

4 Ease of Adaptation and Training needs

Some accounting software is user friendly requiring a simple training to the

users. However, some other complex software packages linked to other

information systems require intensive training on a continuous basis. The

software must be capable of attracting users and, if its requires simple training,

should be able to motivate its potential users.

5 Utilities/MIS Reports

The MIS reports and the degree to which they are used in the organisation

also determine the acquisition of software. For example, software that requires

simply producing the final accounts or cash flow/ratio analysis may be readyto-

use software. However, the software, which is expected to produce cost records

needs to be customised as per user requirements.

6 Expected Level of Secrecy (Software and Data)

Another consideration before buying accounting software is the security features,

which prevent unauthorised personnel from accessing and/or manipulating

data in the accounting system. In tailored software for large businesses, the

user rights may be restricted to purchase vouchers for the purchase department,

sales vouchers to the billing accountants and petty cash module access with the

cashier. The operating system also matters. Unix environment allows multi-users

compared to Windows. In Unix, the user cannot make the computer system

functional unless the user clicks with a password, which is not a restriction in

Windows.

7 Exporting/Importing Data Facility

The transfer of database to other systems or software is sometimes expected

from the accounting software. Organisations may need to transfer information

directly from the ledger into spreadsheet software such as Lotus or Excel for

more flexible reporting. The software should allow the hygienic, untouched data

transfer.

Accounting software may be required to be linked to MIS software in the

organisation. In some ready to use accounting softwares, the exporting, importing

facility is available but is limited to MS Office modules only, e.g. MS Word, MS

Excel, etc. However, tailored softwares are designed in manner that they can

interact and share information with the various sub components of the

organisational MIS.

8 Vendors Reputation and Capability

Another important consideration is the reputation and capability of about

the vendor. This depends upon how long has he been the vendor is in business

of software development, whether there are other users of the software and

extent of the availability of support mechanisms outside the premises of the

vendor.

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