Are you suffering from the costly inefficiencies of invoicing your customers with a billing software package, processing payroll with another software system and then handing over all your receipts to a bookeeper to prepare a set of books with yet another software package.

Are you losing productivity by preparing your Purchase Orders in Word, keeping track of your Inventory in Excel, billing your customers using Q&A, then paying a bookkeeper to re-enter everything to figure out how profitable you are 3 to 6 months after the fact?

With the low cost of pentium processors and the sophistication of business software programs today, it probably makes good sense for any business to start utilizing accounting AND business management software programs. The time savings related to performing daily, routine repetitive tasks is enormous. Furthermore, since many of these programs perform many varied functions, most of the routine business functions can be incorporated into one system.

Make sure you get the most from your computer system and avoid costly time wastage. Get your point-of-sale system tied into an accounting management ledger, your purchase orders tied into inventory management, and tie that into your invoicing system. That will help cost effectiveness and keep you up to date in managing your inventory stock.

Accounting software has matured considerably since the days about five to ten years ago when you had to have a partial degree in accounting to understand it. As with every other product on the market these days, the sophistication of the software has increased significantly, but so have the choices. Not only are there a variety of individual programs to choose from but there are also several variations to pick from each developer, increasing your chance of a "good fit" solution for your business.

Today’s programs have progressed beyond just accounting software, the proper term these days is "Business Management Software". The program developers have designed systems to enable you to perform your daily business tasks, such as recording invoices and cutting cheques, while simultaneously recording your accounting information.

There is no single software package that will serve every business’s needs despite what the marketing hype on the box says. There is, however, an appropriate business software system out there for every business. As with many things in life, though, compromises have to be made. The first one being cost.

Custom software would be the answer for every business. Once you add up the figures it is very expensive and prone to have bugs. Many small businesses cannot afford customized software packages. The compromise then is to choose from the many off-the-shelf software packages, which range in price from a couple of hundred to several thousand dollars.

If you keep in mind that there is NO off-the-shelf package which will do 100% of what your business does you will not be disappointed. Your challenge is to find the package which performs as many of the mission-critical functions required in your business as possible.

To improve your chances of getting the right software package for your needs, start with the basic ability to maintain an accounting general ledger, then write down the five most important functions or information requirements that you need on a daily or weekly basis to manage your business effectively. Then your ready to have the various contestants demonstrate what they can do for you.

Next Time: Should you use a software consultant?