Key takeaways
What this article covers, in order:
- Why this comes up / what goes wrong
- Step-by-step
- Example (fictional figures)
- Common mistakes
- Doing this in HelloBooks
- Frequently asked questions
Evaluating an accounting software company’s fitness on accounting means checking if their product can reliably support your business’s accounting needs, including accurate bookkeeping, GST invoicing, reconciliation, and reporting. This is crucial for startups and tech companies that want to streamline finance operations and comply with Indian tax laws.
Why this comes up / what goes wrong
Startups and technology companies in India often struggle with manual accounting methods like Excel or Tally, which consume time and cause errors. When evaluating an accounting software company, owners or accountants want to ensure the software can handle their specific accounting needs — such as GST invoicing, GSTR-1 and GSTR-3B filing, and bank statement reconciliation — without causing compliance risks or operational delays. Many startups also want easy integration with their sales and payment systems.
Step-by-step
- Check GST Compliance Features: Verify if the software supports GST invoicing, e-invoicing (if applicable), and filing of GSTR-1 and GSTR-3B. Confirm it can handle multiple GSTINs if your startup has them. Use tools like the GST invoice validator to ensure invoice accuracy.
- Assess Reconciliation Capabilities: Confirm the software can reconcile bank statements and GSTR-2B input tax credit automatically or with minimal manual effort. This reduces errors and saves time.
- Evaluate Reporting and Financial Insights: The software should generate standard financial reports such as profit and loss, balance sheet, and GST reports. Check if reports are easy to understand and export.
- Review User Support and Accessibility: Look for support options like chat, phone, or AI assistants. For example, HelloBooks offers the Noor assistant on WhatsApp that understands Hindi, English, and Hinglish, helping owners ask questions about their books conveniently.
- Confirm Integration and Scalability: Check if the software integrates with other tools your business uses, such as CRM or payment gateways. Also, consider if it can scale as your startup grows.
- Test Usability and Interface: Try a demo or free trial to assess how user-friendly the software is for your team, especially if your accountants are used to Excel or Tally.
- Check Pricing and Plans: Compare pricing against features offered, but don’t choose solely on cost. Ensure the plan supports your transaction volume and GST filing needs.
Example (fictional figures)
Consider a 12-person SaaS startup in Bengaluru evaluating accounting software in April 2024.
- Monthly sales revenue: ₹15,00,000
- GST collected (assumed 18%): ₹15,00,000 × 18% = ₹2,70,000
- Monthly purchases: ₹7,00,000
- Input GST (assumed 18%): ₹7,00,000 × 18% = ₹1,26,000
GST payable calculation:
GST collected - Input GST = ₹2,70,000 - ₹1,26,000 = ₹1,44,000
The startup needs software that can generate these figures accurately for GSTR-1 and GSTR-3B filings, reconcile purchase invoices with GSTR-2B, and produce financial reports showing profit margins.
Common mistakes
- Ignoring GST compliance features: Choose software without GST invoicing or filing support and risk penalties. Prevent by verifying GST features upfront.
- Overlooking reconciliation tools: Manual reconciliation causes errors and delays. Prevent by selecting software with automated bank and GSTR-2B reconciliation.
- Neglecting user experience: Complex interfaces discourage adoption. Prevent by testing usability and support options like the Noor assistant.
- Not checking integration options: Lack of integration with payment or CRM systems reduces efficiency. Prevent by confirming API or app integrations.
- Choosing based on price alone: Low-cost software may lack critical features. Prevent by balancing cost with functionality and support.
- Failing to consider scalability: Software that can’t grow with your startup causes disruptions. Prevent by reviewing plan limits and upgrade options.
Doing this in HelloBooks
HelloBooks offers the Noor assistant on WhatsApp, which understands Hindi, English, and Hinglish. Owners who prefer working in Hinglish can ask questions about their books via WhatsApp voice notes or text. This helps startups get quick answers about their accounting data without needing to learn complex software interfaces. Learn more at HelloBooks India.
Frequently asked questions
How do I evaluate the accounting software company business fitness on accept payments?
Check if the software supports payment tracking and reconciliation with your payment gateways or bank statements. Integration with UPI or payment links can be helpful but verify these features explicitly.
How to evaluate the business fitness on bookkeeping software?
Look for features like automated data capture, expense tracking, bank reconciliation, and ease of use. The software should reduce manual entry and errors.
What should I check regarding tax & compliance features?
Ensure the software supports GST invoicing, e-invoicing if applicable, and timely filing of GSTR-1 and GSTR-3B. It should also provide accurate tax calculations and report generation.
How to evaluate integration with other apps?
Ask if the software offers APIs or built-in connectors for CRM, payment gateways, or inventory management. Good integration reduces duplicate data entry.
What about evaluating payroll features?
If your startup needs payroll, check if the software supports salary calculations, TDS deduction, and payslip generation. Many accounting tools offer payroll as a separate module.
How can I assess the software’s ability to capture data?
Look for features like invoice scanning, bank statement import, or automated data extraction to reduce manual entry.
Key takeaways
- Verify GST compliance and invoicing capabilities before choosing software.
- Automated reconciliation saves time and reduces errors.
- User-friendly interfaces and support options like WhatsApp AI assistants improve adoption.
- Integration with other business tools is essential for efficiency.
- Consider scalability and pricing in balance with features.
Start your evaluation with a clear checklist to shortlist accounting software companies that fit your startup’s accounting needs.
To get started with accounting software that supports GST invoicing and filing, try HelloBooks on the Free plan (200 transactions a year, GSTR-1 and 3B filing for one GSTIN) at HelloBooks pricing.
