There are many little signs that your business is outgrowing your accounting software, but you need to think ahead of the big ones to decide when to migrate to a system that delivers better value. Desktop applications like Intuit QuickBooks and Sage 100 seem like they offer great features for the price but provide nowhere near the functionality a growing small business will need. Once your company overextends these solutions past their native scalability and performance, it will become quickly and readily apparent that smaller accounting software will cost your business extra time and money as you grow.
As companies expand into SMB, midmarket and small enterprise stages, processes inevitably multiply alongside personnel and inventory counts as you are forced to swell operations to meet demand. You may have gotten by with desktop applications and spreadsheets handling only a few orders at a time, but now your financial procedures eat up work hours and budget just to maintain a little accuracy. Only an Enterprise Resource Planning (ERP) level system will help your business scale your bookkeeping and other functions for growth and provide the best ROI for finance automation.
Here are nine signs you are outgrowing your accounting software and what you need to do to think ahead:
1. You Need More than Accounting Software
Does your current bookkeeping solution produce a ton of data that every department outside of finance still needs to record, process, and execute on physically? This can often be the easiest indication to identify that you have outgrown the system in place, while simultaneously being the most difficult to address. You can find industry-specific applications to shore up your accounting software’s shortfalls, but that does not mean they will integrate with each other and will still likely require manual data transfer.
ERP, on the other hand, is built with capabilities extending beyond just financial management, with some products having modules for nearly every vertical function. This allows you to connect your finances with the other critical components of your business, such as raw material processing, inventory management and transportation tracking for full manufacturing visibility.
2. You Spend Too Much Time on Manual Tasks
If you are forced to devote more and more employees to just processing your transactions and bookkeeping tasks, then this is a big sign you are outgrowing your accounting software. Relying on smaller and legacy solutions will inevitably leave you falling back on manual procedures in Excel or on paper. When your finance team is running between three different toolsets to record and track everything, along with anyone else that is forced to perform data functions by hand, then you know that your have outgrown your system.
Process automation through technology will mitigate the time you are forced to spend on physically entering and transferring data, along with many other associated tasks like approvals, scheduling, etc. Deploying an ERP will allow you to streamline these operations and ensure that work hours spent on your financial management application will be optimized for efficiency and value.
3. Your Financial Systems are Way Out of Date
Software can seem like an expensive upfront investment, but continuing to rely on the same legacy accounting system for years (or decades) will generate a lot of risk of lost ROI. It may seem like the most affordable option is to use up what you already paid for, but it is important to remember that technology does not stand still – and because of factors like the Internet, no application exists in a vacuum. Your outdated solution will end up generating a lot more cost in compliance, cybersecurity, and making up for all the other deficits it brings.
Modern ERP helps return value on your software investment by delivering the functionality you need to compete in today’s fast-moving markets. By keeping up to date with the latest enhancements and regulatory information, an enterprise-level system will help ensure that your capabilities and output do not fall dangerously behind.
4. Your Data is Increasingly Inaccurate or Incomplete
Data corruption is an escalatory consequence of outgrowing your accounting software, with diminishing returns on the amount of viable information processed as you move past the limits of your system. Human error alone will mitigate your ability to capture complete or reliable data as your processes expand past the capabilities of your current application. Inaccuracies will inevitably grow along with the extent of your operations as your system proves unable to handle the sheer volume of information consistently and forces your users to complement their processes with manual tracking.
Adopting the right ERP will grant you access to data quality tools that enable you to reconcile errors and leverage automation to limit potential mistakes. These features help you identify and correct issues around duplicate entry, typos and more that could lead to serious transactional consequences.
5. Your Software Does Not Scale with Your Strategy
Companies planning for growth require scalability in their technology to capture the best ROI, but smaller solutions like QuickBooks and Sage 50 will not leave much room to expand your processes. These solutions have a hard ceiling for user count, storage capabilities, and other functions that will leave you again seeking additional solutions or manual methods to handle the data overflow. The severity of this problem will only increase as your business continues to outgrow your current system and your finances become mired in heaps of extra accounting work.
ERP software delivers a better capacity to scale your data management upwards to meet new demands and incorporate expanded operations without having to delete data or revert to manual input. This flexibility will enable your business to plan for growth without being held back by technological disadvantages.
6. Compliance is an Increasing Investment in Time and Money
Regulatory pressure is a constant in industries such as process manufacturing, where precise qualifications for items like formulation create exacting standards to follow with each batch. It becomes even more complex for subsectors like food and beverage processing that have persistent quality management and seasonality concerns. Even if your business faces no market-specific regulations, you still face compliance requirements for payroll, taxes and other labor management stipulations.
Ensuring you are consistently following regulatory responsibilities as your company grows is a time-consuming and costly venture without an ERP solution. Legacy accounting software will lack updated data, but modern enterprise systems keep your information current and let you leverage automation to avoid tediously updating fields by hand.
7. You Lack the Ability to Customize Your Software
Applications with limited or no customization available force you to adapt your internal processes to the static capabilities of your existing software. Without the ability to modify reports within your system, your users must follow the basic data guidelines offered and place the burden of compromising for the inevitable idiosyncrasies on your finance team. You will also have to make up everywhere else for the rigid level of insight this delivers and the consequences that the lack of data visibility will have on your forecasting.
Smaller accounting software products may not be built for extensive customization, but modern ERP solutions are designed to be flexible to manage the wide range of demands in the midmarket. Select partners will also be able to make changes to your system’s code to allow for specific functionality that provides value for your particular circumstances and needs.
8. Your Finance Application Has No Built-in Cybersecurity
The age of digital transformation is bringing many industries and traditional business management solutions increasingly into the world of web-based connectivity. Unfortunately, most legacy applications are not equipped to make this leap without significant updating, otherwise misconfigured endpoints will provide open backdoors for hackers. A sure sign of outgrowing your current accounting system is if you have to do extensive work to make it cybersecure, or worse, if it features no security capabilities at all.
Not every ERP has made the shift to digital IT infrastructure unscathed, but well-built modern solutions come equipped with strict role-based permissions and access controls. Engaging the right cloud service provider (CSP) will also give you the option of hosting your software with real-time cybersecurity monitoring provided by a SOC (security operations center).
9. You Cannot Connect to Cloud or Lack Functionality When You Do
Even most smaller desktop accounting systems have made cloud connectivity an option; however, not all have implemented it effectively. Whether you are still using an on-premise legacy solution or a hosted installation of QuickBooks Online, you are likely missing out on the full range of what web-based software has to offer. A true cloud solution should provide seamless integration with other SaaS applications, instant communication between all connected databases and many other state of the art features.
A modern ERP built with cloud connectivity allows you to take your accounting processes digital with paperless reporting, electronic automation and real-time collaboration. The multiple deployment options available also lets your business choose to migrate as fits best with your needs, whether through a completed hosted infrastructure or a hybrid model that leverages existing on-premise resources.
Migrate to Better-fitting Accounting Software
Don’t let outgrowing your current accounting software drag your business processes down. SWK Technologies, an award-winning software consultant and value-added reseller (VAR) of market-leading ERP, will help you find the solution that best fits your current needs and future goals.
Contact SWK here to get started on your search for better-fitting accounting software.