Many businesses start their journey with simple accounting software, like QuickBooks, Xero or FreshBooks, to manage their financial data. They often complement their basic system with tools like Microsoft Excel to track inventory and Outlook to manage contacts and appointments.
Entry-level accounting software packages are designed to get your company up and running. However, as your business grows in complexity and transaction volumes, the rudimentary software might not meet your complex needs, such as planning, budgeting, and forecasting. The system that once supported you may now put your company at risk and hold you back. Whether due to changing external factors or internal needs, it’s essential to recognize when it is time to move on.
If you are concerned that your current accounting software slows you down, it might be time to consider other options, such as an integrated ERP system that will offer complete visibility into every aspect of your business. So, how can you tell if you’ve outgrown your system?
Here are common signs that say you are ready to upgrade to a fully customized software accounting package or enterprise resource planning (ERP) solution.
Incapability to Handle Transaction Volumes.
If you’re waiting until the end of the month to process bulk transactions instead of entering them in real-time, it’s a clear indicator that your accounting software cannot keep up with the number of financial transactions and data collection of your growing business. If you neglect to ensure that your business management software is up to scratch, you’re wasting time and resources on inefficiencies easily fixed with a modern business management solution.
Manual Processes & Lack of Efficiency
If you spend too much time on manual data entry and paperwork, consider it is a sign that you’ve outgrown your accounting software. Your accounting software needs to help you streamline repetitive and manual tasks to remain error-free, save time on reconciliation, and create automated business processes.
Inefficient Invoice and Data Tracking
Invoicing is foundational for any company. The process also requires accuracy and timeliness. Get it wrong, and you won’t get paid, or you’ll get paid late for your products or services, which impacts your cash flow. Older software programs often have difficulties retrieving saved data, including consumer data, invoices, sales records, etc.
New cloud-synced accounting software may solve your issue if you nod your head at this problem.
Relying on Spreadsheets for Inventory Tracking.
If you still use spreadsheets to track and update inventory records, it may be time to upgrade your accounting software. Not only are mistakes like the shipment of incorrect items costly, but they could also affect your customer relationships and brand image. ERP software is the solution you seek when looking to improve your inventory management, visibility and tracking, and even predict demand, allocate resources, and optimize stock.
Limited Ability to Accommodate New Operational Needs
If your accounting tool cannot connect with popular third-party apps like PayPal and Zendesk, your business management software is limited to niche processes. It won’t allow future expansion to support operational activities like distribution, manufacturing, logistics, professional services, project accounting, and more.
Difficulty Complying with Regulatory Requirements
If you spend too many resources to remain compliant, as transparency becomes more critical and compliance becomes more complex, it may be a sign that you’ve outgrown your system.
Some industries face regulations that can be costly to uphold.
A good accounting tool should help you comply with your country’s tax agencies. If your accounting software cannot do this, you should consider a cloud accounting tool that automatically syncs all the critical data to have your reports ready when they need to be submitted.
If you do your reporting with an Excel spreadsheet, Chances are you are facing a constant delay in reporting and impairing the ability to operate in the long run efficiently. If your close process includes extensive manual wading through endless spreadsheets, correcting duplicates, time-consuming accounts receivable and payable functions, you risk errors and sabotage your credibility.
If you rely on emails to prompt transaction approvals and move tasks forward, and the internal workflow process can use some streamlining, it’s time for a change.
Workflow automation eliminates frustrating project creep by keeping everything moving forward in one platform and out of your inbox.
What Should You Do Next?
If you nodded “yes” to any of the above, it might just be time for a change. Adopting a new business management /ERP software is an opportunity to boost the organization’s competitive advantage. Deciding to replace your accounting software or business may seem like a daunting task. But what is the actual cost of maintaining a system that is no longer up to par with demands?
My take on things is, that a modern, flexible and open financial management system is what every business needs to support current needs and scale as the business grows. There has never been a better time for companies to update their capabilities, maintain greater efficiency, and prepare for growth and changing business conditions.