Choosing accounting software: the features that save time and a clean switch
Pick accounting software on the work it removes and the rules it must meet, then switch at a period end without a gap in your records.
In this topic: IT and data 18
Most businesses choose accounting software twice. The first time by accident: the package came with the first bookkeeper, or it was the cheapest on the day the company was registered. The second time on purpose, when that choice starts to cost hours: payments matched by hand, supplier bills retyped line by line, a VAT return that eats an evening.
Choosing accounting software the second time goes better when you start from where those hours go, not from a feature list. This guide covers the choice, and a switch at a period end without a gap in your records.
Choose accounting software on the work that comes back every week: bank lines, supplier invoices, sales invoices and the tax return. Then check what a demo rarely shows: the rules where you operate, how you get all your data out and who may change what. Switch at a year end or period end, with opening balances that reconcile and the old system kept readable.
- Time saved
- Local rules
- Your data
- Switching
Cloud or desktop accounting software
This choice decides who looks after updates, backups and access, and how easily you can leave.
Cloud software runs on servers the vendor manages: you sign in through a browser or an app, pay a subscription and receive updates automatically. Desktop software runs on your own computer or server, so you decide when to update and arrange backups and remote access yourself.
| Question | Cloud | Desktop |
|---|---|---|
| Where the data lives | With the vendor; ask in which country | On your own hardware |
| Updates | Automatic, on the vendor's schedule | When you install them |
| Backups | The vendor's job; ask what you can restore | Your job, with a copy kept off site |
| Accountant access | Their own sign-in, from anywhere | Remote access, or files sent back and forth |
| Leaving | Depends on export options and the contract | The data stays, but often only that software reads it in full |
Desktop still fits when, for example, a specialised industry package exists only in that form. Then ask how long that version will be developed further.
The accounting software features that save the most time
Almost any package can post an entry and produce a balance sheet. The difference lies in the manual work before that.
Start by counting the bank lines, supplier invoices and sales invoices you process in a month. Those numbers make a demo far easier to judge than any feature list.
Two features usually save the most. A bank feedBank feedA direct connection that brings your bank transactions into the accounting software automatically, so nobody imports statements by hand. brings in every payment and suggests the invoice or cost it belongs to; check that all your accounts and cards connect. Invoice capture reads supplier invoices that are emailed in or photographed, and an approval step gives the budget holder a say before anyone pays. With an e-invoice there is nothing to read: the data arrives as data.
VAT, GST or sales tax
Look for the right tax code on every invoice line and a return in the form your tax authority accepts, ideally filed from the software. Whoever files, check the return against the ledger first.
Currencies and entities
Invoices in other currencies, with exchange differences booked when payment arrives. For a group: books per entity, intercompany entries and a consolidated view without a spreadsheet in between.
Integrations through an API
Payroll, webshop, till and time tracking all produce entries. Through an APIAPIApplication programming interface: an agreed way for two systems to exchange data directly, without anyone exporting or retyping files. they post to the books without retyping. Ask who maintains each link: one built by a third party may fall outside the vendor's support.
User rights and an audit trail
Each user gets only the rights they need, with two-step sign-in. An audit trailAudit trailA log that records every entry and every change with the user and the time, so nothing is altered without a trace. shows who entered or changed what, and when. Allow few people to change supplier bank details, and confirm each change by phone on a number you already had.
More on sign-in protection in cybersecurity basics.
Which accounting software fits your business
Size matters less than how your business earns its money: a trading company with stock needs different things from a consultancy that bills hours.
Sort every requirement into must, should or could. A must is a knock-out: one fail and the package is out, however good the rest. Shoulds are weighted and scored after each demo or trial; coulds only count when two packages end up close.
Keep the musts few: a long list of them usually hides wishes that are really shoulds.
| Type of business | Must handle | Watch out for |
|---|---|---|
| Freelancer with few transactions | Bank feed, simple invoicing, tax return | Modules you pay for but never use |
| Company with staff | Users with their own rights, accountant access, payroll link | How the payroll journal arrives each month |
| Trading with stock | Stock or a link to the stock system, purchase orders | Without sound stock valuation the monthly margin is wrong |
| Services billed by the hour | Time tracking, project invoicing, work in progress | Hours that need an export before they become invoices |
| Group with several entities | Books per entity, currencies, intercompany entries, consolidation | One chart of accounts, local tax per entity |
| Accounting firm | Access to client files, bulk tasks, review tools | Few packages across clients, so expertise stays current |
If purchasing, stock, planning and finance run in separate systems held together by spreadsheets, look at an ERP instead: see choosing and implementing an ERP.
Tax and e-invoicing rules: check where you operate
In several countries, tax rules now reach into the software itself: digital records, filing from the software, structured e-invoices. Three examples, not a full list.
United Kingdom
All VAT-registered businesses must keep VAT records digitally and file returns using software, and copying and pasting between programs does not count as a digital link (source: HMRC, April 2022). Sole traders and landlords above an income threshold have also been under Making Tax Digital for Income Tax since 6 April 2026 (source: HMRC, March 2026).
Belgium
Since 1 January 2026, structured e-invoices are compulsory for nearly all transactions between Belgian VAT-registered businesses (source: Belgian federal government, October 2024). A PDF by email is no longer enough, and invoices are in principle exchanged over the PeppolPeppolAn international network and set of standards over which business software sends and receives e-invoices, so they arrive as data in the receiving system. network (source: Belgian federal government, November 2026).
Singapore
GST-registered businesses must send invoice data directly to the tax authority through InvoiceNow-ready software. New voluntary registrants came first; all remaining GST-registered businesses must comply by 1 April 2031 (source: IRAS, September 2026).
In the EU, digital reporting requirements will apply to cross-border transactions between businesses from 1 July 2030, and member states may make e-invoicing compulsory at home under specific conditions (source: European Commission, March 2025). Where sales tax differs by state or province, test every place you sell to.
Rules change and differ by country. Ask your accountant or the tax authority which software rules apply where you operate, then have each vendor demonstrate, not promise, how its software meets them. More in e-invoicing around the world and business taxes.
Data ownership, export and how long to keep records
In cloud software your books sit with the vendor. How you get all of the data out depends on the export options and the contract.
A ledger export alone is not enough. You also need customer and supplier details, open invoices and the attachments, such as scanned receipts, downloadable in bulk and in formats other software can read.
Law sometimes helps. In the EU, providers of software as a service must make open interfaces available and at least export data in a commonly used, machine-readable format, and from 12 January 2027 switching charges, including those for moving data out, disappear entirely (source: European Commission, December 2025). In Norway, businesses with an electronic accounting system must be able to give a tax auditor a SAF-T file, a standard format for accounting data based on an OECD recommendation (source: Norwegian Tax Administration, November 2026).
- Ownership: the contract says the data is yours and limits what the vendor may do with it.
- After cancelling: how long you keep access, and whether a read-only archive exists.
- Personal data: data protection terms for employee and customer details.
Retention periods differ by country
In Australia you need to keep most records for five years (source: ATO, June 2026). A UK company must keep its records for six years from the end of the last financial year they relate to, and longer in some cases (source: GOV.UK, January 2025). The obligation stays with you when you leave a vendor, so decide at the start how old years stay readable: a read-only archive, a tested export, or both.
How to switch accounting software without a gap
A switch rarely fails on the new software. It fails at the seams: opening balances that do not reconcile, a payment that matches no invoice, an old year nobody can open.
Switch at the start of a financial year if you can, so each year lives in one system; otherwise at the start of a VAT or tax period, so no return draws on two systems. From the cut-over date, new transactions go into the new system only, while the old one takes the closing entries for the old year.
Then run both systems for one period, at least for bank and sales invoices, and compare the trial balance, VAT figures and open items. Running longer mostly doubles the work.
- 1Map the chart of accountsLink every account in the old chart of accountsChart of accountsThe list of all ledger accounts a business posts to, such as revenue, bank, debtors and wages, grouped for the balance sheet and the profit and loss account. to a new one, tax codes included, and have your accountant check the table.
- 2Move the master dataCustomers, suppliers and items, with tax numbers and e-invoicing addresses. Take supplier bank details from a trusted source, not from an old export.
- 3Post the opening balancesThe closing balances of all balance sheet accounts, provisional until the old year is closed. The bank balance must match the statement on the cut-over date.
- 4Enter open items one by oneEvery unpaid invoice separately, not as one total, so payments match and reminders work. Start the bank feed on the cut-over date, so nothing arrives twice.
- 5Keep the old system readableTest a full export on another computer, and cancel the old subscription only after the first tax return from the new system and your accountant's approval.
Other software guides are in the IT and data overview.
Does your accounting software still fit?
Answer eight statements for your own business and see where to start.
- 1We know where our accounting data is stored and who backs it up.
- 2Bank lines arrive automatically and the software suggests the matching invoice.
- 3Supplier invoices are captured and approved without anyone retyping them.
- 4Each user has only the rights they need, and changes to supplier bank details are logged.
- 5Our requirements are split into must, should and could before we look at any demo.
- 6We know which record-keeping and e-invoicing rules apply in every country where we operate.
- 7We have tested a full export of our ledger and attachments within the last year.
- 8We know until when we must keep each old year, and how we would open it.
Related guides
Requirements checklist and switching plan with milestones
Below you will find a requirements checklist with must, should and could and a demo test per line, filled in for a wholesaler, and a switching plan with milestones from eight weeks before the cut-over.
Frequently asked questions
Can we keep the books in a spreadsheet instead?
Does our accountant need to use the same software?
What happens to our data when we cancel the subscription?
Can we switch in the middle of the financial year?
- HMRC: VAT Notice on Making Tax Digital for VAT (April 2022)
- Belgian federal government: From when is e-invoicing mandatory? (October 2024)
- IRAS: Frequently asked questions for businesses on the GST InvoiceNow Requirement (September 2026)
- European Commission: Data Act explained (December 2025)
- ATO: Overview of record-keeping rules for business (June 2026)
- GOV.UK: Running a limited company: company and accounting records (January 2025)