Continued from Part 1 & 2 on web-based accounting packages, append below are some of the features/factors that we should consider when buying a web-based accounting packages system:

System requirements

• We should ensure that at the workplace, the computers meet the requirements to use web based software effectively, including hardware specifications, browser software version, and Internet connection.

Chart of accounts

• Web-based accounting packages would have the predefined sample chart of accounts, hence the need to select the one that most closely relates to our own business and customize it instantly.

Account numbers

• In order to group subsidiary ledgers systematically, the software should allow at least five digits for account numbers. This allows proper accounts classification for major category to sub-category. A typical example is inventory and its various elements like raw material, work-in-progress and finished goods. Within each sub-category, we need to further put up codes for them.

Segmentation/departmentalization

• Can the company use segments or departments to group information?

Data entry

• Does the software provide the interface with bar code or UPC scanner to process transactions

Data import

• Can the software import the existing accounting data from other systems? If so, what types of data can the software handle? This feature allows the company to access its old data quickly.

Data export

• The ability to export the data to other platforms (e.g., MS Excel) is critical, because the company may terminate the service in the future. With all the master and transaction files in another application, the firm can easily transfer the data to a new accounting system.

E-mail/fax interface

• Can the system send source documents such as invoices (or purchase orders) to customers(or vendors) via e-mail, fax, or even both?

Check printing

• Can the system print checks or generate e-checks for payment?

Inventory control

• Can the system trace detailed information about the inventories?

Payroll cycle

• Is this a standard feature or an add-on for additional charge? Is it a stand-alone package or is it integrated with labor cost allocation?

Sales transactions

• Can the system handle different “bill to” and “ship to” addresses?

Sales analysis

• Can the system analyze sales figures by a number of factors, such as product, region, or salesman?

Product/job costing

• Can the system perform costing by jobs/projects/products?

Reports.

• How many report templates are available? Does the software provide all the reports that the company needs?

Routine transactions

• Does the software provide recurring templates so that the system can initialize a routine transaction automatically? For example, some softwares can use templates to send invoices to clients via email and record the transactions on a preset date every month.

Security features

• The service provider must use the industry standard technology Secure Socket Layer (SSL), which helps ensure that the accounting data are protected during transmission over the Internet.

Data backup

• The provider should back up all the company’s vital data, and have a second, off-site storage facility.

Storage capacity

• Does the provider have any limitations on the numbers of records or transactions stored on its servers? How many years can the company go back to its own old records on the provider’s server?

Technical support

• Is tech support free? If so, for how long? If not, how much does it cost? Tech support can take many forms (e.g., e-mail or toll-free telephone), and its quality can be variable. How long does it take, on average, to answer support questions? Are there any limits on the number of questions or the support-staff time?

Customize the accounting system

• Web-based accounting packages are general-purpose software, and a company needs to use and customize only the features required for its business. The business are set up and customize by using the predefined chart of accounts, forms, and reports.

Prepare system documentation.

• There is a need to prepare system documentation so that new staff can learn how to use the system. System documentation should provide detailed procedures, including system activation and deactivation, chart of accounts, sales cycle, purchase cycle, employee and payroll cycle, cash receipts, cash disbursements, journal entries, inventory, financial reports and queries, and error corrections. The system designer should copy the predefined forms, screens, and reports and include them within the system documentation. Good system documentation should be easy to read, make it easy for users to find specific information (i.e., include a table of contents, page numbers, and an index), and be well organized (i.e., by cycles or accounts). The procedures should be complete, in easy-to-follow steps (e.g., showing all relevant forms, screens, and reports). The overall presentation should be professional, and the system documentation should be kept in a safe place.

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• Using The Web-Based Accounting Packages (Part 2) -Procedures
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• Samples of Corporate Finance Roles And Responsibilities