Accounting is an essential part of almost every business and personal practice where money is involved. It’s the process that keeps the world going, both in business and our everyday lives. That’s why it’s imperative you have access to all the accounting software features needed to get the job done. But where should you start?

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We surveyed accounting software buyers over 15 months from companies of many sizes and asked them why they were looking for a new accounting system and what features they needed the most. We also asked about their challenges and what deployment methods they prefer. Here’s what we found.

Key Insights

• Core accounting features matter more than non-essential tools.
• Buyers want centralization of data and processes.
• Buyers want smarter, more automated systems.
• 96% of buyers are open to the cloud.

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Top Reasons for a New Accounting System

As any business grows, the amount of data it needs to handle grows alongside it, making it essential to invest in a technically competent and relevant accounting system. We surveyed buyers in the market for accounting software to see what they’re looking for.

A quarter of buyers mentioned they were considering a system upgrade ⁠— not necessarily because there was anything wrong with their current system, but rather, to improve the capabilities of what they already had in place.

About 17% of buyers wanted more centralization from their system, expressing a desire to integrate existing software into one place and access data from other company areas. About 15% said their current system was too old, or had been discontinued.

15% of surveyed buyers said their current system wasn’t scalable enough for their company’s growth, while others wanted to leave room for projected growth. 8% of buyers wanted more automation, and 8% wanted more reporting. 6% of buyers felt their current system was hard to use, and 4% didn’t have the necessary capabilities.

Buyers who mentioned wanting more features needed software with more functionality than what their current system offered. On the other hand, buyers who mentioned wanting an upgrade didn’t have a longer list of key characteristics, implying that they were happy with what their current system offered; they just wanted a system that could perform the same capabilities more efficiently.

As we’ll see in more detail later on, survey respondents primarily prefer software upgrades and improvements to contain the same core features as previous versions, but with improved functionality. Accounting specialists would rather have a system that assists their primary tasks with increased efficiency than a system that only has more features added on.

Respondents by Company Size

Our survey sample came from a diverse range of company sizes, with 100-249 employees being the most common size at 30%.

Here’s a quick review of the other percentages:

• Less than 2% of buyers came from companies with 1-99 employees.
• 13% of buyers came from companies with 250-499 employees.
• 13% of buyers came from companies with 500-999 employees.
• Less than 2% of buyers came from companies with 2,500-19,000 employees.
• Less than 2% of buyers came from companies with 20,000-49,000 employees.
• Just under 6% of buyers came from companies with over 50,000 employees.

A little less than 25% of our respondents didn’t disclose their company size.

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Key Features

We found that a large number of organizations are looking for certain accounting software features over other non-essential features.

The graph under our earlier Key Insights section provides a quick rundown of the top accounting software features list buyers want. First, it’s no surprise core accounting comes in as the most-requested, at 95% of buyers.

But what about the last 5% of buyers? They still need core features of accounting software, but possibly didn’t mention it because they see them as a given. However, one buyer specifically mentioned not needing any AR since another party handled it outside of her company. A few software buyers may be looking for non-essential features only.

Budgeting was the second-most identified feature, at 60%. Budgeting not only helps manage money effectively but it improves decision-making by monitoring performance, helping companies identify issues before they occur and providing a strong basis for future planning.

Forecasting came in third with 55% of respondents and was named concurrently with budgeting about 90% of the time. Reporting was identified by 49%, asset tracking by 26%, payroll by 23%, billing by 15% and inventory by 13%.

Let’s discuss these essential enterprise accounting features and functions in detail.

Core Accounting

In our survey, core accounting was the top feature buyers cited. This includes characteristics like a general ledger (GL), accounts payable (AP) and accounts receivable (AR).

The general ledger serves as the engine of software that includes essential information from financial transactions, managing billing and how much customers owe. Modern software systems come with the capability to remember consumer data. Standards, terms and payment reminders are automated to ensure there’s no delay or penalty.

With core accounting identified by 94% of respondents and budgeting identified by 60%, there’s over a 30% drop in buyer agreement. This suggests buyers care a lot more about core attributes than the bells and whistles many vendors offer.

Since most of our respondents came from companies of 100 to 249 employees, you may wonder if that’s where the preference for core characteristics originates. It’s easy to assume the smaller businesses are skewing the results, opting only for core features to save resources.

But that’s not the case. We looked at the data again without the results from buyers in this group and found 97% identified core attributes and only 59% identified budgeting. Focusing on buyers from larger companies widened the discrepancy, showing us this isn’t a size-based preference.

Centralized Data and Processes

When we asked accounting software buyers why they wanted a new system, respondents who reported not having enough characteristics or that their system was too hard to use were in the minority. This differs from buyers in many other categories — in both our HR buying trends survey and our study of marketing automation buyers, a lack of features was the most commonly reported issue.

The most common responses to our survey focused more on buyers wanting to centralize accounting software features with other business functions or growth. Core accounting capabilities are standard for all companies in all industries, and financial departments are more concerned about having financial visibility in their features as opposed to more of them.

Additionally, there’s been discussion for years over whether or not software will replace accountants. While some argue that it will, others believe that accountants will move to a more advisory role. After all, accountants do much more than the tedious day-to-day tasks that can be automated by software. Investing in upgraded accounting software moves their focus to more in-depth tasks and considerations like capital optimization and process control.

This software also makes it easier for teams to transition into centralized accounting, enabling users to follow processes more consistently, standardizing procedures and making it easy to manage payables and receivables from one place.

Giving the closing team access to data makes it easier to research and resolve any issue promptly. It also gives staff the freedom to close multiple locations with a single process, saving time and money.

Smart, Automated Systems

One major conclusion from the data was buyers are looking for more analytical support. Over half of all respondents reported forecasting as a feature they’d like to see in their next system.

Using a financial forecast, you can create cohesive reports that help institute realistic and feasible goals. You can make well-informed decisions, improve the quality of management, and encourage cooperation and coordination by anticipating future financial upturns or downturns.

49% of buyers also identified reporting as an important feature. Reports improve decision-making by demonstrating revenue-collecting trends and how quickly creditors are being paid. They also help identify bottlenecks that could obstruct the cash flow and keep track of business transactions — maintaining the budget, predicting cash flow and forecasting revenue.

A small but significant 8% of buyers said their current system lacked automation. Accountants save time with automatic financial closing, freeing themselves up to focus on core activities. Automating the most tedious accounting tasks can also prevent human errors and typos in copying information from one platform to another.

As software plays larger and larger roles in the accounting process, accountants can focus more on strategy, influencing major business decisions. Many of the surveyed software buyers act as leaders in their financial department who don’t want to replace their staff, but rather, free them up to take on more important duties that go a long way towards strategically developing the business.

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Cloud Deployment

Cloud computing has become standard in nearly every software category, and accounting is no exception with 96% of buyers open to cloud deployment. A large majority (71%) of respondents were open to either type of deployment, and an impressive 25% of respondents reported considering an upgrade to an exclusively cloud-based solution.

Cloud-based solutions provide access to financial data anytime and anywhere, giving employees more control over their information for better collaboration.

Furthermore, cloud-based solutions facilitate workflow automation, saving time and money. Since the business doesn’t have to pull data from different sources, it increases the accuracy of internal information.

However, it’s important to understand why 4% of respondents reported seeking exclusively on-premise solutions. This option solely relies on internal infrastructure, removing the risk of data loss due to poor connections and making the network impenetrable for prying third parties looking to steal data.

Additionally, it offers greater flexibility since companies can update the system themselves without asking cloud service providers.

On-premise systems are also sometimes necessary for compliance reasons. Non-compliance could lead to hefty penalties, audits, reputational damage, and in severe cases, imprisonment of the organization’s board members or CFOs.

Budgeting and Forecasting

Forecasting helps businesses understand and plan future operations according to models. Automated systems use AI and historical data to understand patterns, identify trends and predict the possible outcomes for revenue, cash flow, and more. This allows executives and managers to create a robust budget — another task that accounting software makes easier ⁠— that strengthens decision-making and impacts the bottom line positively.

Reporting

With the right capabilities in place, accounting software can ensure proper regulatory reporting and speed up internal use. Modern versions come with pre-built reports and a dashboard that makes it easy for employees at all levels to interpret results. Reporting also assesses the current state of the business and compares it to the forecast, visualizes KPIs such as balance sheet and profit/loss, and makes it easier to maintain a budget and use a forecast.

Asset Tracking

Incorporating asset tracking capabilities allows you to keep track of capital and property such as machinery, vehicles and buildings. This information gives a detailed view of your business property’s health, which includes valuation, condition, insurance status and more. It’s important to optimize asset tracking as a business grows and obtains more capital and property to keep track of.

Payroll Management

Getting a handle on payroll includes calculating, processing and distributing pay to employees, which can be easily automated with accounting software, saving precious time and money.

With an increasing employee base, it’s essential to incorporate this component into any enterprise accounting system. It enables you to quickly and accurately calculate and generate payslips, expenses, and bonuses with minimum effort.

Billing and Invoicing

As your business grows, the increasing volume and variety of sales make billing and invoicing features increasingly useful. Using accounting software to automate this process further frees up accounting employees to tackle more important tasks.

With modern accounting software features, billing and invoicing capabilities include various transaction types, which can all be automated to ensure accuracy and efficiency.

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To Sum It Up

Overall, it seems buyers want software that uplifts departments to a more advisory position. We see this in the survey when buyers ask for more centralization, as more integrated data means more visibility to make decisions. Survey respondents also wanted more automation and reporting. By reducing the amount of tedious tasks and implementing easy-to-understand reports, more time is freed up for productivity and strategy.

The survey also showed buyers’ preference for upgrading to a more advanced system — even the few respondents with hard-to-use systems didn’t ask for a less sophisticated solution. A sophisticated system doesn’t necessarily mean more components; buyers showed a strong preference for accounting software that improved the core features that were already in place rather than adding new features. Buyers also wanted systems that can handle company growth.

Not sure what features to look for in your accounting software? Our requirements list has you covered.

Did you get a chance to voice your opinion in our survey? If not, let us know what the most important accounting software features are to you in the comments below!