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33.1 Software Selection Criteria

Overview​

Choosing the right accounting software is critical for business success. Software selection criteria help evaluate options and make informed decisions. Understanding these criteria ensures you choose software that meets your business needs, ensures compliance, and supports growth.

Essential Criteria​

PCN Compliance​

PCN Compliance is Mandatory:

  • Software must support PCN chart of accounts
  • Must handle PCN account numbering
  • Must support PCN account classes (1-7)
  • Must generate PCN-compliant reports
  • Must export to FAIA format

VAT Handling​

VAT Requirements:

  • Must handle Luxembourg VAT rates (3%, 8%, 14%, 17%)
  • Must calculate VAT correctly
  • Must support VAT returns
  • Must integrate with eCDF
  • Must handle cross-border VAT (if applicable)

Luxembourg-Specific Features​

Required Features:

  • eCDF integration
  • FAIA export capability
  • Multilingual support (FR, DE, EN)
  • Luxembourg tax calculations
  • Social charges calculation (if payroll included)

Functional Requirements​

Core Accounting Functions​

Must Include:

  • General ledger
  • Accounts payable
  • Accounts receivable
  • Bank reconciliation
  • Financial reporting
  • VAT management

Additional Features​

Consider:

  • Payroll processing
  • Inventory management
  • Project accounting
  • Time tracking
  • E-invoicing
  • Multi-currency (if needed)

Technical Requirements​

System Requirements​

Consider:

  • Operating system compatibility
  • Hardware requirements
  • Network requirements
  • Browser compatibility (for cloud)
  • Mobile access (if needed)

Integration Capabilities​

Integration Needs:

  • Bank integration
  • POS system integration
  • E-commerce platform integration
  • Payroll system integration
  • Other business systems

Cost Considerations​

Software Costs​

Cost Components:

  • Software license (one-time or subscription)
  • Implementation costs
  • Training costs
  • Support/maintenance costs
  • Upgrade costs

Total Cost of Ownership​

TCO Includes:

  • Initial purchase/license
  • Implementation
  • Training
  • Ongoing support
  • Upgrades
  • Additional modules

Usability​

User Interface​

Consider:

  • Ease of use
  • Learning curve
  • User experience
  • Customization options
  • Reporting capabilities

Training and Support​

Support Options:

  • Documentation quality
  • Training availability
  • Support channels
  • Response times
  • Local support (Luxembourg)

Scalability​

Growth Considerations​

Scalability Factors:

  • Number of users supported
  • Transaction volume capacity
  • Data storage capacity
  • Multi-company support
  • Expansion capabilities

Security and Backup​

Data Security​

Security Features:

  • Access controls
  • Data encryption
  • User permissions
  • Audit trails
  • Compliance with data protection

Backup and Recovery​

Backup Options:

  • Automatic backups
  • Backup frequency
  • Recovery procedures
  • Data export capabilities
  • Disaster recovery

Luxembourg Compliance Note​

Critical Selection Criteria:

  • PCN compliance: Must support PCN (non-negotiable)
  • VAT handling: Must handle Luxembourg VAT correctly
  • eCDF integration: Must integrate with eCDF
  • FAIA export: Must export to FAIA format
  • Local support: Luxembourg-based support preferred

Common Mistakes:

  • Ignoring PCN: Choosing software without PCN support
  • Underestimating costs: Not considering total cost of ownership
  • Overbuying: Choosing software too complex for needs
  • Underbuying: Choosing software that doesn't scale
  • Neglecting support: Not considering support availability

Think It Through​

Artisan Boulangerie needs accounting software. They have 3 employees, process about 500 transactions per month, and need PCN compliance. What criteria should they prioritize? What features are essential vs. nice-to-have?

Concepts in Practice​

Software Selection Example

TechLux Solutions software selection:

Requirements:

  • PCN compliance (mandatory)
  • VAT handling (mandatory)
  • eCDF integration (mandatory)
  • FAIA export (mandatory)
  • Payroll processing (needed)
  • Project accounting (needed)
  • 10 users
  • Cloud-based preferred

Evaluation:

  • Sage BOB: PCN compliant, VAT correct, eCDF integrated, FAIA export, payroll available, project accounting available, cloud option, Luxembourg support ✅
  • Odoo: PCN compliant (with module), VAT correct, eCDF integration (with module), FAIA export (with module), payroll available, project accounting available, cloud option, open-source ✅
  • Excel: Not PCN compliant, manual VAT, no eCDF integration, no FAIA export ❌

Decision: Sage BOB chosen for comprehensive Luxembourg support and features.

Result: Software meets all requirements, ensures compliance, supports business needs.