As businesses evolve and grow, so do their operational needs. One critical aspect of business management is the accounting system, which tracks financial transactions and provides vital insights into the company’s financial health. Many companies use products such as excel spreadsheets to well established SME accounting software such as SAGE 50, Quickbooks, Big Red Book and other similar products; and while good at maintaining basic accounting information, these can become limiting to a company as it grows.
This welcomes a key question ‘How do you know when you’ve outgrown your accounting system?’
In this blog, we will explore the signs indicating that it’s time to upgrade from your basic accounting system to a fully integrated business management solution (or ERP). Additionally, we will discuss what steps to take when your company has surpassed the capabilities of your current accounting system.
Accounting system options scale depending on factors such as businesses’ size, number of users, workflows, and specific business process requirements. Once these factors have been identified and quantified, it is quite manageable to ascertain what kind of business software solution to select.
Keeping that in mind, below are 5 common reasons to upgrade from an accounts package:
Over-reliance on spreadsheets: Manually entering in business information to Excel over time means duplicating or supplementing data that could be integrated within the accounting software. This essentially creates a second set of books, which must be continuously updated and maintained with each new transaction and entry. This has the negative outcome of wasted time over double entry and an increased risk of errors. Some companies will even rather hire extra people to handle these manual updates than spend considerably less money on a suitable business management System. When you spend excessive time on routine tasks, it hampers productivity and prevents your finance team from focusing on strategic initiatives. A fully integrated business management solution automates processes, reduces manual efforts, and frees up resources to drive growth and innovation.
Inability to extract detailed information: While most accounting systems for small business are capable of providing financial statements, cash flow, current balances and other such basic information, they have serious limitations when it comes to extensive and customisable reporting. Without immediate real-time access to information and a way to produce custom reports, it becomes difficult for a business to operate as efficiently as would be possible otherwise, and places another obstacle to worry about. A fully integrated solution allows for all information to be available at any time and simplifies the process of producing detailed reports.
Using multiple software systems: The problem with a bare-bones accounting system is that they end up creating complications as a company grows. Their limited system features do in fact make them easy to use, but this comes at the cost of deeper functionality and the capability of only being able to handle a certain amount of information. At the point where your business starts to require multiple solutions while previously only having to rely on one, it is evident that your company has grown and expanded to a size where it may be necessary to consider a more comprehensive solution that can handle a greater level of operational complexity. This is the point where a basic accounting package has to be supplemented by 3rd party add-ons and multiple pieces of software that can handle more specialised tasks. Good examples of such tasks would include traceability in the Food, manufacturing and Agri industries, and job costing in the engineering industry.
Complex Compliance Requirements: In every industry, distinct compliance regulations such as tax codes, ISO standards, revenue recognition guidelines, and industry-specific reporting requirements exist. When your current accounting system proves incapable of managing these complexities, it exposes your business to significant risks. This is where a comprehensive and fully integrated business management solution steps in. By offering configurable modules specifically designed for your industry, a business management solution ensures precise and compliant financial operations, mitigating potential risks and bolstering your business’s overall compliance posture.
Lack of Integration: Is your accounting system isolated from other critical business functions? An accounting system focuses primarily on financials, but as your company expands, you may require integration with stock management, sales, customer relationship management (CRM), traceability or production. A comprehensive business management solution provides a centralised platform that integrates various departments, ensuring data consistency and streamlining operations.
Evaluate your needs: Assess your current and future business requirements, considering factors such as scalability, integration capabilities, reporting needs, compliance requirements, and process automation.
Research business management solutions: Explore comprehensive business management solutions that offer modules for accounting, inventory management, sales, CRM, and more. Look for scalability, ease of integration, robust reporting and analytics, and industry-specific features.
Plan and budget: Develop a migration plan that includes timelines, resources required, and budget considerations. Ensure you have a clear understanding of the costs associated with implementing and maintaining the new solution.
Data migration and implementation: Collaborate with your chosen solution provider to migrate data from the old system to the new one. Establish a seamless implementation process, including training for your team members to ensure a smooth transition.
Continuous improvement: Once the new system is in place, regularly review and optimise your processes to leverage the full potential of your business management solution. Stay informed about updates and new features to maximise efficiency and stay ahead in a rapidly changing business landscape.
Herbst Software are a family owned, Irish business who have over 40 years’ expertise developing and implementing customised business management solutions tailored specifically for each industry.
With over 800 clients across the island of Ireland currently using their customisable solutions, Herbst pride themselves with empowering the day to day operations of employees, whilst empowering management with real time information.
Their goal is to streamline and integrate business processes across all company departments within ONE system, meaning you can get all the information you need, at the touch of a button.
Give Herbst a call if you would like any further information on our integrated solutions or if you would like a complementary needs analysis completed for your company alongside a customised demonstration.
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