Free online accounting software is a great way to sample different programs to determine which one is right for you and your business. After finding a free accounting system that works, many small business owners continue to use the free version instead of upgrading or finding an accounting system that has more capabilities. While this can save money in the short term, it can be problematic when you discover that you need more than what your free version can deliver.
Instead of waiting for a major problem to come up before upgrading, watch for these signs that you need to upgrade your free accounting system. It is a small investment that can pay off in a big way down the road.
You find yourself telling clients and employees, “the computer can’t do that”.
If your free accounting system cannot perform the basic functions that you need to handle day to day business transactions, then you have to upgrade before this becomes a financial or legal issue. If your business has employees, you need to have an accounting system that can track payroll accounts. Similarly, you need to have a program that can track and submit tax information to your accountant or tax professional.
You are keeping separate records.
If some accounts are too complicated for your free software program to handle, or if you’re bumping up against the program’s space limitations, it’s time to upgrade. Dealing with several different accounting systems is a good way to overspend, forget accounts, and make many other errors.
You are combining accounts or leaving out transactions.
If you’re doing these things to force your business into an accounting program, rather than finding an accounting program that adapts to your business, then it’s time to move on. Accounting software is supposed to help you with your finances; it isn’t meant to complicate your business.
You can’t communicate with other businesses.
When you started your business, it might have been acceptable to send your clients an invoice that was produced by a free accounting system. As your client base grows and your projects become more complicated, however, you need a software program that can communicate with larger companies. Look for a program that uses the same type of files as your clients and suppliers.
If you decide it’s time to upgrade your software, try to do it at a time when your business will be able to adjust to changes. If you choose to upgrade, then you will probably need to get used to the new modules and enter data in the expanded database. If you decide to switch programs entirely, then you’ll need to schedule several days for the transfer all of your data and adjusting to a new way of running reports.
Do not wait until there is a major financial or legal issue before upgrading your free accounting system. Not only will this cost you in money and time, but it will be next to impossible to upgrade software and solve the problems that your old program caused.