Monday, April 28, 2008

When To Upgrade Your Accounting System

Success increases the demands on your resources especially your accounting system. Think of your business as a potted plant. As the plant grows, you need to move it into a bigger pot if you want to sustain healthy growth.

As your business grows, you should reassess your software's capabilities. You want to prevent problems that might slow growth. Don't get caught with inadequate software when you need it most. Installing a new accounting system is not something you want to try when your company's resources are stretched thin.

The first step is to study your exact business needs. You want to find the right system that will fulfill your needs. That requires you to determine where you will be in three years time. What will your business need then, how much spare capacity do you need to factor in now so you aren't caught unprepared later down the line.

Remember that accounting systems can offer the most reliable data when they are used properly over a several years. You must choose a system that will fit your medium-term business plans. You must also allow enough time for training of your workers so they can efficiently use the new system. Change is seldom easy or swift. Be patient and determine realistic timelines.

What To Expect from A New System
If you are still using the same accounting software you started with, that isn't a bad thing. However, you must open yourself to the reality that you are missing out on significant analytical capabilities that come with more sophisticated software. These advanced reporting systems can offer you a new look at company data.

Good accounting software is more than just number crunching. Contract management, customer relationship management (CRM), e-commerce, multiple currency management, logistics, project management and digital dashboard/business intelligence systems can all now be integrated into accounting systems. This provides a total data analysis and reporting capability hitherto unknown in business. You can now command the most timely and critical data at your fingertips for rapid and accurate decision making.

All these features are only available in mid to high-end software systems for medium to large-sized businesses. All these systems include very expensive up front costs for the proper integration of the various service offerings required by your company. However, once that expense is amortized over the life of the system, it is ultimately negligible compared to the enormous benefits gained.

Purchasing Considerations
As always there are several issues to consider before you spend money:

  • Can the new accounting software be customized to your business needs?

  • Can it accommodate growth (e.g. more users)?

  • Will the new system be able to communicate with your old systems?

  • Can the manufacturer provide competent customer service?

Again, I must stress to be sure to budget enough time for training! At minimum, your accounting staff should receive all the training required to ensure the orderly conduct of business after the new system is implemented. Your old system information should be migrated to the new system to ensure continuity of information and to provide you with the immediate analysis benefits. While you can rely on printed materials for training purposes, nothing is better than actual human teachers that can give classes.

For additional questions to ask before you buy any technology system, click here.

R-Squared Computing - Business Technology Experts

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