How To Know When You’ve Outgrown Your Accounting Software


All businesses require the use of record keeping software, if even for the purposes of tax compliance. How these records translate into a bookkeeping system is another matter entirely, with companies using everything from spreadsheets to well established SME accounting software such as Sage 50, Quickbooks, Big Red Book, and other similar products. These solutions, while good at maintaining basic accounting information, can become limiting to a company as it grows. This welcomes a key question that is frequently brought up within SME circles, which is: ‘how do you know when you’ve outgrown your accounting software?’.

Accounting software 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 three common reasons to upgrade from an accounts package:

  1. 1. Over-reliance on spreadsheets: Manually entering in business information into 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 over time. Some companies will even rather hire extra people to handle these manual updates than spend considerably less money on a suitable Enterprise Resource Planning (ERP) System.
  2. 2. 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 a 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. An integrated solution allows for all information to be available at any time and simplifies the process of producing detailed reports.
  3. 3. Using multiple software systems: The problem with a bare-bones accounting solution 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 and Agri Business industries, and job costing in the engineering industry.

From the above, we can identify some key signs for upgrading your business management software. By finding the gaps and shortcomings of your existing solution(s), some of the key benefits of an ERP product are illustrated. With a complete all-in-one business management software package, the entirety of your business operations can be handled and recorded in real time, and duplication as well as paperwork can be greatly reduced. For more information on other benefits and features of ERP, please see our flagship Herbst Enterprise solution.


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