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Be aware of hidden costs

Evaluating and purchasing accounting software can be a daunting task. There are so many options to choose from, that the options often seem endless. Finding the perfect match for your business or organization may seem like an impossible task, however, choosing the right software can help you improve your bottom line and increase your business efficiency by reducing performance and reporting issues you may face every day. . Being armed with important information about hidden costs means you can make a more informed decision about the accounting software that’s best for your business and your budget.

We all understand that buying any new product or service often comes with a price tag. However, with many IT solutions, the software purchase price is tied to many other hidden costs that must be considered and budgeted for during the software evaluation process. One of the challenges many organizations face is calculating the total cost of ownership of an IT or business software solution. Here are five hidden costs to consider when budgeting for or evaluating an enterprise software solution.

5 hidden costs to consider:

1. Hardware costs – It is important to consider whether the software being evaluated can be compatible with the company’s existing hardware and IT infrastructure, or whether new hardware will be required.

2. Installation costs – There may be a cost associated with the actual physical installation of the software. Will you need a consultant to carry out this process for you? How long does the average installation take and how much will it cost approximately?

3. Training costs – Training costs should also be considered. How many staff members will need to use the new software? How much training will they need and what kind of budget should be set aside for this? Again, training should be a key consideration when budgeting for the purchase of an enterprise software solution.

4. Ongoing support and maintenance – Many software vendors charge an ongoing support and maintenance fee, this charge is to ensure that their software is kept up to date and meets local, state, or federal requirements. It will cover such things as legislative changes and ongoing improvements and updates to the software. The fee can range from 10% to 45% of the value of the software per year. Therefore, this cost is worth considering if ongoing support and maintenance charges apply.

5. Transfer or conversion of data – Is it necessary to transfer data from the existing accounting system to the new system? Is there an easy transition from the old system to the new system? This should also be taken into account as it may mean downtime for your business or there may be additional fees associated with the conversion process.

Choosing an accounting software: where to start?

Every organization has its own unique set of requirements when it comes to accounting packages, however some key questions in determining if your organization is right for an out-of-the-box solution or a larger enterprise resource planning (ERP) system include :

Suitable for ready-to-use products

  • The organization is in one place
  • small customer base
  • Small employee base
  • Limited or no stock requirements

Suitable for a larger solution or ERP

  • Multiple office locations
  • Multiple warehouse locations
  • Multiple currencies, complex prices
  • Advanced stock control required

The first step in the selection process should be to determine your business requirements. What do you need or want from your Accounting or ERP solution? What are the gaps in your current systems or processes? That features No meet your expectations? First identify your needs and wants, what are your current needs? Think about your future needs, growth capacity is important in any selection process. What might your business need in the future? Once you’ve determined your business requirements, use your resources such as the Internet, online business software guides, coworkers, or your accountant or financial advisor to learn more about what’s available in the marketplace.

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