So, you’re deciding which
Native Functionality
The decision to get the software with the native functionality (the feature is provided by the accounting software developer themselves) would initially seem to be the best choice. After all, it’s easier to set up and one less cog that can break.
However, there are situations in which native is not always the best option.
For one thing, native functionality may not be as powerful as you need it to be. If you have inventory that is anything beyond basic, like you need to build assemblies, you’ll most likely need add-on software to deal with this.
Another thing you’ll want to check is if the data is accessible to other software? For example, if you’re using your accounting software as a CRM tool, can you then get this data out to other services, like MailChimp for email
You should also look and see if your accounting software can import the data you need it to. For example, you may have a lot of employees on payroll. Instead of manually re-creating all this information in your accounting software, it may be a better option to keep it separate from your accounting software and use an add-on to exchange only specific information. And to add to this, it could be that you want to limit access, so using a separate payroll system ensures that there’s limited access to the data.
Add-on Functionality
So why go add-on? Add-ons usually offer the advantage of more powerful functionality. This functionality is often more important to a business than its accounting software, such as with companies who mainly sell online via ecommerce, have retail operations with POS systems, or need a robust inventory
Although, just because there’s an add-on available, it doesn’t always mean it’s a good integration.
Sadly, some add-ons are glorified import / export tools. In these cases, you may be better off manually exporting data from the one system and then importing into the other, as this will give you more control over the data going in and out.
Another caution with using add-ons is that there is usually no undo button. Once data has been exchanged, you can’t take it back. There’s also no restore points found in online accounting software, so you’re only option will be to manually delete any unwanted data that has been imported erroneously.
Something you should look for is if the software has a partnership or direct integration. For example, Square has a direct integration with Xero, so the developers worked together to make sure the experience was as seamless as possible. What is seamless integration you ask? According to technopedia.com:
“Seamless integration is the process where a new module or feature of an application or hardware is added or integrated without resulting in any discernable errors or complications.”
In other words, seamless integration means that you won’t have to deal with any extra headaches as a result of the add-on. Unfortunately, a good number of add-ons I’ve tested still require a very specific workflow in order to use it and often required the use of workarounds to get the data entered in the way I wanted.
For example, I use payroll add-ons. The payroll is completed in the payroll software, and then after the payroll is run, I’d start an export to push the data out to my accounting software. However, once the data was in, I’d still have to manipulate the transactions created in order to be entered into the accounting software correctly. The ideal seamless integration would be that the payroll is run in the payroll software and the data automatically shows up in the accounting software as well.
The reason we don’t have seamless integration is probably because most add-ons are not the result of partnerships or direct integrations. So sure, an add-on may be found in the official add-on store, but it doesn’t mean that it’s seamless. This is why when you’re comparing native functionality vs. add-on functionality, you not only need to judge the capability of the function (running payroll), but also how the data is managed between the two systems. In my payroll example above, having a completely native payroll solution would be my choice.
Another issue I’ve found with add-ons is that integrations tend to break over time. Most of the time, the fix is as simple as re-authenticating user credentials. Anyone who has bank feeds set up knows that this happens from time to time. However, in more problematic scenarios, the integration breaks because something fundamental has changed that prevents the data from being exchanged as it had before. With this in mind, I think you really should look into how you would handle the situation if the apps no longer talked to each other. If it’s a mission critical integration, I’d look into how serious the companies are about working together.
Native vs. Add-on Checklist
Here’s a checklist for deciding whether to go native or add-on:
- Does the software have the native functionality and is that functionality powerful enough for my needs? If native has what you need, it’s usually best to go native.
- Can the data in the software be accessed via an API if you need to expand functionality via an add-on or you need it to play nice with yet another piece of software? Even if you use your accounting software as a CRM tool, you still may want that data accessible to other software, such as for when you want to do an email marketing campaign.
- Can the data in the software be manually exported (via something like a CSV file) into another system? If you ever need to move or upgrade systems, this will be important.
- How good is the integration? Did the developers of both companies work together? Usually you can find a blog announcement detailing this if it’s the case. Read online reviews and forums about the integration.
- Did you test out the integration? If you can, create some test accounts to see how the data flows between the software before fully implementing the add-on with your live data.
- What is the cost of extra functionality, whether native or via add-on? Sometimes the extra functionality can outstrip the price you pay for your accounting software.
I’ve been talking about choosing accounting software based on it having a single piece of functionality, like inventory or CRM. But what about choosing the software with the most; the most native functionality or the most add-ons? Just remember is that quantity does not equal quality.
As I often say, choose software based on fit, not on whether it has the most; the most add-ons, the most native-functionality, or the most awesome interface.