When software is simple enough to self-install, the manufacturer will provide an entry level solution with limited capabilities.
If you can live within the limited capabilities (most cannot) then you can use the software for free.
However if you grow or need more capabilities, then you pay the software company a fee which unlocks certain features. And in order to unlock these features you increasingly will be required to enter into a mandatory ongoing licensing fee (formerly sold as updates or maintenance).
This is an intriguing model because it potentially eliminates the old software distribution model of cardboard boxes filled with software CDs.
Why Self Install Is A Poor Idea
Where most users get burned on self installed accounting software is they fail to consider the future. They buy only enough capability for today – when they are small – and give no consideration to what their upgrade path may be once they add the next 2, 5, 10 or 100 employees.
Do you know the most expensive and painful time to upgrade software? It’s when your company is growing and you can ill afford the downtime (when the company is growing you’ll no longer care about the initial software cost that you saved using a freebie solution)
Purchasing any accounting software without giving thought to where your company growth may lead you in the next 3, 5 or 10 years is a recipe for failure.
How To Succeed in Accounting Software Selection
Given that we’re Sage MAS 90 authorized resellers and consultants you probably figure this is the point that I’m going to give a fancy sales pitch to use our product.
Sorry to disappoint but my pitch is for you to sit back and THINK about where your business is going over the next 3 to 5 years.
A pencil and paper will work for businesses that are just starting out. But as you grow you’re going to need something more full featured. That free system that you began with is quickly going to become a paid system. The question you’ll be facing is whether the paid system is enough.
- Think about all aspects of your accounting software needs. Don’t focus only on the cash register or the shop floor or the lumber yard. Core accounting is the foundation which your reporting is built upon.
- Find a consultant who can provide the pros and cons of any solutions you’re considering. If they can’t come up with half a dozen cons – walk away because you’re just getting a sales pitch. Seriously.
- Arrange for a conference room pilot or test setup. These are called many different things but they all involve configuring the software in your office and fine tuning it to your business. This provides a much better understanding of where the software is a good (and bad) fit for your business. Expect to pay for this – and don’t be upset if you uncover items that cause you not to buy the package that you’ve just paid for have setup. Consider it an investment to avoid disaster down the road.
Finally, take a look at my post regarding Intuit’s QuickBooks Software. Even though I’m a Sage MAS 90 consultant, I took time out to spend a week in Arizona at a QuickBooks specific conference to learn more about the product and talk to the consultants who work with it every day. I’ve written up my thoughts (both good and bad) and you can review them here.