When starting our business there were several decisions we had to make.
- What will be the name of the company?
- How should we incorporate?
- What should be the logo?
- What should we use for project management?
- What email provider should we use?
- And finally, what accounting software for expenses and invoices should we use?
That last one is the focus of this article. We did some research and found some were bloated and had way more features than we needed. This also meant they were more costly. Some were missing features we thought we needed. In the end we chose a software called Invoicely. Invoicely seemed to have the simplicity and cost we were looking for. However, we didn’t know what we didn’t know.
Unpleasant Discoveries
For the first several months everything was fine. The software did what we expected it to and worked well. However, I did notice that expenses and invoices were treated the same way. They used the same input layout and method. While the expense and invoice input pages had many features, the essentials came down to entering data into a digital invoice. While I understand from a design perspective that this might seem like a good idea because a client and a vendor “look” the same, but an expense doesn’t generally need as much information. In addition I could not find a way to bulk import expenses. Each one had to be entered manually.
While entering an expense one day I encountered a bigger issue. I attempted to make a payment for an expense that was under $1.00 USD, but received an error that said “An error occurred! Please try again or contact support. (Error Reference: Could not be marked as paid)” The error itself did not give me the reason it would not complete. I suspected it was the amount because I could make other payments that were larger. However, it took a couple of emails to customer support to confirm that this was the case and part of the program. Complicating things was the fact that Invoicely is a European company with a significant time difference causing delay in getting an answer. I understand that having a bill under $1 is not common, but we have them.
To workaround this problem our options were to combine multiple expenses from the same company, or to not enter a payment on the expense and just know that it was paid. Neither are good options for us. The first option would create more work later when I am trying to match the bank account ledger with the Invoicely transaction, and the second option would require me to remember that those transactions were actually paid and make the correction before tax calculations.
There could be reasons for this design I am not aware of. It could be European customers and businesses have rounded prices with no decimal or there is another system Invoicely is tied to that requires this. The point is regardless of the reasons, it is not ideal for our situation. Keep in mind I am not saying Invoicely is a bad solution, it has a very clean and simple interface, and may work for most people. It just wasn’t the perfect fit for us.
The point is regardless of the reasons, it is not ideal for our situation.
Choosing the Solution
Now that we had identified two things that we didn’t like we asked some questions. At what point is this off-the-shelf software not good enough? Is it time to build something custom? The trade off is we are taking time to create the software, but we will have something that 100% works the way we want and need. Once we determined these problems were big enough for us to choose the custom software route we reviewed the below questions.
The trade off is we are taking time to create the software, but we will have something that 100% works the way we want and need.
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What productivity gains will we see?
If solving the problem will have a huge impact on your productivity then you should ask additional questions below. In some cases you can quantify your possible gains by multiplying the time lost with your current labor costs. Don’t forget to include your opportunity cost into your calculation. If the gain is minimal you can probably stop asking any questions and the solution you have is probably sufficient. -
How long do you think you will need the software? Will you require something else in the future?
If the software you currently use will only be needed for a short time then most likely a custom solution is not the best choice, but if it is something you plan on using for a long time the savings will continue to add up year over year. -
How long will it take to get your money back?
As part of your calculation you will want to know your break even point. You have already determined you will be using the software long term and now you need to know when you will see a benefit. If you recoup your money 20 years down the road it may not be worth it, but 1-5 years might be acceptable. While it might be a large upfront cost you won’t have to keep paying for a solution that doesn’t really fit. -
How easy will it be to maintain?
The last thing to review would be if there are any additional costs. You need to consider whether you will have any maintenance or hosting fees. For example if you plan to host this software yourself you may need to purchase new server hardware to run your software with any associated costs. If you choose to have someone else host it you may need to pay a monthly fee for the hosting. All of these should be included in your break even analysis.
Stop Settling for “Good Enough”
The math isn’t complicated. Every minute you spend wrestling with a UI that doesn’t fit your workflow, or manually entering data because the software isn’t optimized, is money leaking out of your business.
Off-the-shelf software is built for the “average” user, but if your business isn’t average, you’re just paying for the privilege of being frustrated. If your break even analysis shows that a custom software pays for itself in a few years, stop making excuses for bloated, rigid platforms. Build the tool you actually need and stop settling.
Off-the-shelf software is built for the “average” user, but if your business isn’t average, you’re just paying for the privilege of being frustrated.