How to select an accounting software

How to select an accounting software

How to select an accounting software

How to select an accounting software: In the current times, businesses across the world use accounting software to manage all their accounts such as sales, revenues, and inventory. The decision to use accounting software or not is easier; however, the difficult part is to choose the right accounting software for your business. Since there are multiple options available in the local market, it is difficult for businesses to finalize the best accounting software.

We present to you a few tips that will enable you to identify the right accounting software for your

Identify the best accounting software based on your business needs

The first step is to identify what are the accounting needs of your business. The accounting needs of small and medium-sized businesses differ from those of big corporates. The industry of operations is also a big parameter to consider before finalizing the accounting software.

You should also consider the accounting skills you have in-house that will make the accounting operations smoother. Every accounting software is different and requires different levels of training and expertise in using it.

Therefore, it is essential to conduct deep research of your accounting skills, business needs, and accounting software used by competitors to understand which software works best for you.

Budgeting for Accounting Software

Once you have identified the usage of the accounting software in your business, you can look at various options to find one in your budget. Different options are available for different budgets.

If you are looking for accounting software that can be used generally for any business type with basic features, then such options are available at lesser costs or may be downloaded free.

On the contrary, if you are looking for specialized accounting software with features customized for a specific industry, then such options turn out to be costly. Such accounting software is customized with features, which make the accounting process for that specific industry seamless and efficient. Therefore, they are highly priced.

For example, a retailer might require customized accounting software based on his/her retail needs. Similarly, in the case of a small business, you must look for specialized accounting software for small businesses. Nonetheless, it all boils down to the money you are ready to spend on buying the accounting software or you have the option to outsource your accounting work to a third-party vendor.

When looking at the price of the accounting software, you must also be wary of any hidden costs involved. Some software applications may be available at a lesser price, but those are with the basic features only; for advanced features or add-ons, you may be required to pay additional fees. Furthermore, consider the frequency of software updates or maintenance fees required.

Consider the add-on features you want in your accounting software

Some of the accounting software providers offer unique add-on features to attract customers to buy their products. While some accounting software provides you the option of remote access to enable remote work, others have the feature to accept online payments to expedite the payment process.

There are other add-ons, which make the accounting software easily integrable to other applications such as tax software, ecommerce application, inventory system, enterprise resource planning system, and many other applications depending on the industry of use. These add-ons improve the functionality and benefits of accounting software.

Ensure to have a simple user interface and data security in the accounting software

Businesses generally prefer to have accounting software that is easy to use and with a simple user interface. It must be simple enough to understand and learn to use the software, as training is an additional cost.

However, industry-specific accounting software with multiple features is difficult to use and
understand. Still if it aligns with your business requirements, a one-time training cost must not be a
difficult choice. You must still ensure that the user interface is simple so that every new user who interacts with the software understands it with not much time wasted on getting used to it.

Data security is the key feature for any accounting software since it will have all your company’s
financial transactions stored. To ensure data security, two points must be checked. First, if the
application stores data on the vendor’s servers, you must ensure that the vendor’s servers have
sufficient security measures. Secondly, the data transfer process from your computer to the vendor’s servers must be encrypted. These two points will ensure data security in your accounting software.

Installation and support after the purchase of accounting software

You must get the required support from your accounting software vendor whenever you face any challenges in using it. You may require support in the installation or usage. Therefore, check if they are capable enough to provide the right kind of support required at a given time. The response quality and response time matter a lot.


It is always a good practice to consider the above-mentioned tips while buying the accounting software so that you buy the right one and do not regret a wrong choice. Invest your time wisely in
considering multiple options. Check the features of all accounting software, analyze their alignment with your business requirements, and then select the best accounting software. Otherwise you can contact KMS for more guidance and support.

Advantages that risk consulting services bring for your business

Advantages that risk consulting services bring for your business

Advantages that risk consulting services bring for your business

Businesses face several risks arising from unexpected events such as injury to employees, natural calamity, economic downturn, change in customer behavior, increased competition, or any other that may affect their operations. Such risks that threaten a business’s march towards its goals are
called Business Risks.

Therefore, businesses are required to have in place a robust business risk management plan that can
help to prevent such events or minimize the risks, thereby saving your revenues and your future.

The risk management process ensures that the team identifies the potential threats before their occurrence and implement practices to avoid the risk, lessen its effect, or deal with the impact. Not all businesses would be able to develop such a strategic business risk management strategy. That is where the role of risk consulting services providers becomes significant.

Risk consultants provide risk consulting services to help businesses with managing risk in business, including understanding the risks and implementing corrective methods. The risk consulting services may pertain to economic risk, financial risk, competition risk, compliance risk, reputation risk, security risk, market risk, and operational risk.

However, businesses do not understand the criticality of risk consulting services. We help you in this context by sharing the advantages of risk consulting services as below:

Risk consulting services ensure more information at hand for businesses

Risk management consultants are skilled and knowledgeable in analyzing the risks of businesses and identify the reasons behind them. They are better equipped with the information required to create a strong risk management plan that can help the businesses to achieve a win over the risks and achieve their goals.

Their knowledge on the various potential risks that can affect a business, ways to minimize the risks to operations, handle the impact if the risks occur, and measure the bad effects provide the required morale and support to the businesses. They can share their knowledge of handling risks, financing, auditing, compliance, and accounting with the businesses’ teams to deal more effectively with the

Experienced professionals bring their expertise in risk consulting to the table

Risk management consultants have the relevant experience of dealing with multiple types of risks in their years of risk consulting services to businesses. When risk consulting vendors work with different types of businesses, their knowledge and expertise in managing risks in business grows. They develop unique skills in handling the risk management process for different types of industries.

If they know the risk faced by a business, it is easier to provide effective risk consulting services so that the risks to the business are limited and managed well before major setbacks. Furthermore, even if the risk is unknown to them, they can employ their expertise in a comprehensive risk assessment and development of business risk management policies to reduce their impact.

Risk consulting guarantee a third-party perspective for better insights

Risk consulting service providers bring a new perspective, a new thought process, and a unique solution to the risk management process that the internal team is incapable of. Probably the internal team fails to identify the risks on time, fails to understand the intensity of the impact of the risks, or is not able to design the risk management strategy on time.

The internal functional teams or departments may have arguments on the source of risk, impact on their respective functions, or the strategy to address the risks. All these situations can lead to significant damages for the business, such as loss in revenues, fines or penalties, or negative publicity. Therefore, it is for the best of the business to have a neutral perspective from third-party risk consulting vendors for easy and timely identification and resolution of risks.

Risk consulting assures you of healthier business processes

Risk consulting vendors keep a close eye on you by studying your operations, identifying the risks and their impact, and designing and implementing solutions. This entire risk management process ensures that any inefficiency associated with any business operation is identified and corrected. Thus, it results in completely compliant processes that are made more well-organized and effective.

With the assessment and analysis of your core business process, risk consulting services providers identify your strengths and areas of improvement. Such an analysis can guide you to gain a competitive advantage over other industry players. Their experience in similar industry’s risk consulting practices makes them competent enough to identify the right opportunities for growth and leverage them for benefits. Besides, you can leverage this competency to drive your business growth.

Risk consulting improves your attractiveness to investors

Once risk consulting services providers start improving your business processes with solid risk management strategies, your business starts performing better and draws more revenues. It becomes less risky, operations become more efficient and effective, and the finances of the business become positive and resilient.

These are the times when the business starts attracting investors. Investors look for such businesses, which have low risks, strong finances, and seamless operations. Therefore, risk consulting brings those benefits that a high-risk business would never have thought of – attractive investment opportunity for investors and completely compliant in the eyes of government and shareholders.


These are the reasons why risk consulting is essential for your business. The decision is on you to finalize the best risk consulting vendors for your business after evaluating several factors. Select the
finest risk consultants like KMS who can generate value for your business. Ensure that they put in efforts for risk identification, risk analysis, risk control, and risk treatment for your business survival.

Financial performance assessment: Top KPIs to track and measure

Financial performance assessment: Top KPIs to track and measure

Financial performance assessment: Top KPIs to track and measure

Financial performance assessment: While you are engaging in your business operations, devising new robust strategies, and innovating
some path-breaking products or services, you must not forget to understand the impact of all of the above on your business growth. These affect the financial health of your business and help you earn more profits or result in losses. You must keep a regular check on your financial performance through key financial indicators. You can use these key financial metrics to measure the success of your strategies and operations and take corrective actions whenever and wherever required.

Gut instinct also works sometimes; however, in the case of financial reporting, it is best to put your bet on financial performance measures. Financial performance metrics are defined as indicators companies use to track, measure, and analyze the financial performance of the company.

The company sets financial goals in terms of profits or revenues to compare the performance in comparison to other companies, industries, or some internal goals. Financial performance indicators generally help the investors decide whether to invest or not and in strategic planning.

Knowledge of these financial metrics is essential to gauge the business’s performance and then make relevant adjustments to the goals and strategic objectives of different functional teams and the organization as a whole.

The key financial metrics generally are segmented under different categories of liquidity, efficiency,
profitability, solvency, and valuation. Managers and other stakeholders of the organization must focus on the following key financial indicators:

Profitability: key financial indicators

Gross profit margin

Gross profit margin is one of the key financial indicators that indicate the profitability of a company. The profitability is calculated as the gross profits as a percentage of revenue. Therefore, the formula for gross profit margin is the difference between revenue and cost of goods sold, divided by revenue.

It indicates the effectiveness of the company in generating revenues with due consideration to the costs of production of products and services that are used to generate those revenues.

This financial indicator is generally compared with the industry average to match how the company is performing against its competitors. If the gross profit margin is lower, then the company may be under-pricing; if the performance measure is higher, then the company must control its overhead costs.

Net profit margin

Net profit margin is a key financial metric, calculated as the net profit as a percentage of revenue. It is a measure of profitability, as the gross profit margin. It indicates how much of each unit of money earned in revenues by the company translates into profits.

It gives a good assessment to the investors looking for investment opportunities. Through this financial metric, investors can gauge whether the management of the company is capable of generating enough profits from the sales without going overboard with the operating costs and overhead expenses.

A good net profit margin differs by industry and the business structure. Generally, an industry average is defined, and players can compare their net profit margin to the industry average to compare their performance with that of the competitors.

If the company has a high net profit margin, it means the management is effective in cost control while a lower net profit margin indicates either poor pricing strategies or ineffective cost structure, or both.

Return on equity

Return on equity (ROE) is one of the key financial indicators for a business in terms of profitability. Return on equity is calculated as the division of net income by shareholder’s equity. It indicates how efficient a company is in generating returns on the investment that is received from the shareholders of the company.

It is a ratio used for comparing the competitors since it is used to gauge which company is capable enough to generate cash internally.

If ROE is gradually decreasing, it means that the company is not capable of using its equity capital efficiently, while if it increases gradually, that means the company’s management is efficiently using the shareholder capital for generating profits.

Return on assets

Return on assets is a key financial metric that measures the profitability of a business. It calculates the profitability of a company in comparison to its total assets. The formula for return on assets (ROA) is net income divided by total assets.

It indicates how efficient a company’s assets are in generating revenues, meaning from each currency unit of assets they possess, how many currency units of earnings are generated.

A higher ROA number indicates that the company is effective in generating more money from investing less. The return on assets figure differs from industry to industry.

There are industries, which require a large initial investment. In such cases, the ideal ROA of the industry is less. For example, the return on assets for the services industry is higher while it is comparably lower from transportation and utility companies, as they need high investment initially.

Liquidity: key financial indicators

Current ratio

The current ratio is categorized as a key performance measure of liquidity. It measures whether a firm is capable enough to meet its short-term obligations.

It is calculated as current assets divided by current liabilities. Investors and analysts use this financial metric to understand if the company is capable enough to maximize the current assets on its balance sheet to fulfill short-term obligations such as current debt or any other payables.

Generally, a current ratio between 1.2 and 2 is considered as the optimum value. If a company has a current ratio below one, it means that the company does not have liquid assets to fulfill its requirement of short-term liabilities.

A company with a current ratio of two has twice the current assets as compared to the liabilities to cover its short-term debts. However, a too high value of the current ratio is also not good since that indicates that the company is incapable of using its current assets efficiently.

Quick ratio

The quick ratio is one of the key financial indicators that measure the liquidity of a company. It is similar to the current ratio, except that it excludes the inventories and prepaid from current assets.

It measures the ability of a company to use its quick assets to fulfill its current liabilities. The quick assets here include cash and cash equivalents, accounts receivable, and marketable securities.

In general, a ratio of one or higher is considered a good quick ratio. It is a more conservative measure as compared to the current ratio. A lower quick ratio means the company has several unpaid bills, lesser sales, and poor collections of accounts receivable.

Another point of concern is when the quick ratio is significantly lower than the current ratio. In such a case, it means that the company lacks liquid assets to cover its short-term liabilities, and therefore, relies heavily on inventory, which should not be the case.

Leverage: Key financial indicators

Debt to equity ratio

The debt to equity ratio is one of the key financial metrics of leverage of a company. The formula for debt to equity ratio is a company’s total liabilities divided by the shareholder’s equity. This ratio indicates how much shareholders’ equity and debt are used to finance the assets of the company.

An ideal debt to equity ratio varies from industry to industry, depending on the usage of fixed assets in that industry. Generally, the ideal debt to equity ratio must not be more than two, except for some asset-intensive industries such as mining.

A too high debt to equity ratio means a company is unable to pay its debts due to financial distress situation, while a too low debt to equity ratio means that the company is over-dependent on its equity to finance the business. Both the situations are bad for the company ad must be avoided.

Debt ratio

Debt ratio is another leverage-measuring indicator. It is calculated as total debts divided by total assets. It indicates how much of a company’s assets are financed by the debts it takes.

Generally, the debt ratio is industry-specific; however, a ratio of less than or equal to 20% indicates a healthy company, while if the ratio is higher than 30%, then the company is in distress and must take immediate actions for improvement.

Investors use this ratio to assess the risk level of a company. If the company has an extremely high debt ratio, it must take measures to increase the sales, lease more assets of the company, or must issue new or additional shares to improve its cash flow in the company.

Efficiency: key financial indicators

Asset turnover ratio

Asset turnover ratio, also called total asset turnover, is a key financial indicator to measure the efficiency of a company. It measures the efficiency of a company in generating sales revenue from its total assets. The formula for asset turnover ratio is net sales divided by the average total assets.

The higher the value, the efficient the company is in generating revenue from its assets, while a lower ratio value indicates the inefficiency of the company in using its assets to generate sales. Like many other ratios, the ideal asset turnover ratio differs by industry since some industries are asset- intensive while some require fewer assets.

If the total asset turnover is declining over time, the company can improve its figures by increasing sales, selling assets, automate the inventory management system, find efficient use of its assets, and accelerate collections.

Inventory turnover ratio

The inventory turnover ratio is one of the key financial metrics that measure the efficiency of a company. It is calculated as the net sales divided by the average inventory at the selling price.

It indicates the number of times the company uses or sells inventory in a given defined period, specifically a year. In the general sense, it is a measure to check if the company has an excess inventory as compared to its sales figures.

For most industries, a good turnover ratio lies between 5 and 10. This number indicates that the company is not required to place frequent orders with the suppliers and has enough inventories on hand to satisfy the demands.

A higher number indicates a more efficient organization since it is capable enough to save on storage costs and other holding expenses. Low inventory turnover means the company is overstocking and unable to sell its products.

Other key financial indicators

Customer acquisition ratio

Customer acquisition ratio is one of the key financial performance measures to identify how much revenue you are generating from every new customer that you acquire. The formula for customer acquisition ratio is net expected lifetime profit from customer divided by the cost to acquire a customer. The ideal customer acquisition ratio is one.

The numerator of the formula includes the average purchasing price of the customer and the purchasing frequency, while the denominator includes all the marketing and onboarding costs. However, the components making up the numerator and denominator differ from industry to industry.

A high customer acquisition ratio means you are earning higher profits from every one unit of currency that you spend on acquiring a new customer. On the other hand, a low ratio means your investment in acquiring a customer is not fruitful enough to generate profits for your business, and you are losing money.

Budget variance

Budget variance is a key financial indicator for any business. It is calculated as subtracting the actual
spend from the planned budget for each item in the budget over a defined period. To calculate the percentage variance, divided the above number by the original budgeted number.

If the actual revenue is more than the budgeted revenue or if the actual costs are less than the budgeted costs, then the budget variance is considered favourable. In the case of the opposite
situation, the budget variance is unfavourable. An unfavourable budget variance depicts poor management decisions.


There are many other key financial indicators in addition to the ones stated above. However, it depends on your industry of operations, goals, and objectives. Nonetheless, they are significant for any business to measure growth, success and design future business strategies.