Businesses and business owners across the world tend to face numerous challenges with their software systems of choice. They may find that their systems require more time to get accurate financial and operational reports. Or that they feel the need to improve their accounting software to facilitate cash and POS transactions more efficiently.
Some are also aware that they aren’t using a CRM that aligns with the other systems they’re utilizing. If your business is using a basic accounting package to manage its day-to-day operation, it might be time for an upgrade. More capable systems like Enterprise Resource Processing (ERP) solutions can improve the way that your business users perform tasks, handle operations, and manage finances.
Some startups may even start out using simple Excel spreadsheets and manual labor to control their finances. However, as they start to grow in complexity and size, this solution just isn’t enough to keep their books in order. Inefficient bookkeeping methods can lead to trouble around tax audit times.
They also create day-to-day headaches and cause you to miss opportunities as your company scales. G2’s ‘The Power of a Cloud ERP Suite’ report notes that many companies face challenges when improving productivity and efficiency and supporting growth while minimizing the associated costs of achieving these goals.
Upgrading your basic accounting package to a more comprehensive solution may assist in boosting productivity and efficiency. Ensuring ongoing customer satisfaction at the same time. If your accounting system is causing any of the following challenges or bottlenecks, it’s time to consider an upgrade.
1. System Downtime is Jeopardizing Business Opportunities
Time is money in the business world. If you own or operate an SMB, your ability to meticulously control your finances and facilitate transactions allows you to respond to the needs of your customers. You can grab market opportunities as soon as they arise.
Unfortunately, companies that use basic accounting software or spreadsheets can neglect to focus on business support. They can face system downtime or lose data on a regular basis. This can impede their ability to take profitable opportunities before their competitors get there first.
2. Expansion Challenges
Growth is a crucial part of any business’s long-term success. It’s important to assess whether or not your current accounting solution can meet your business’s financial, compliance, and tax management requirements as it scales. If it cannot, it might be time to invest in a more robust alternative that can handle fluctuations and expansions in your demand.
As your business expands, you might find that you can’t keep sufficient financial records. Best bookkeeping practices involve maintaining meticulous records of all of your company’s financial transactions. Both your financial auditors and your tax regulators will ask you to substantiate any transactions visible on your general ledger.
If you can’t, you risk missing out on tax deductions that could stabilize your cash flow and reduce your financial challenges early on. Your investors may look through your books carefully before agreeing to fund you. They will almost certainly request all of your financial statements from the past few years, too. Poor bookkeeping in spreadsheets or using dysfunctional software won’t give your investors the data they need to back you with confidence.
3. Excessive Operation and Maintenance Costs
The right accounting software for your business should not drain your time, effort, and financial resources. As your customer base and sources of income increase and diversify and your supply chains and transactions become more complex, a basic program can quickly reach its limits and hinder further growth.
If your business spends too much time compiling all the needed data between your accounting and management systems, consider upgrading your accounting software. Opt for a package that can handle your business volumes without wasting precious money and time and straining your accounting team.
4. Limited Visibility
Business owners usually demand detailed reports on their enterprise’s operations in order to create insights and analyses based on solid information. If you are finding that the gap between this data and your accounting software’s reporting abilities is growing continuously, you might be tempted to rely on workaround tools like spreadsheets to compensate.
Unfortunately, this can lead to limited visibility and impair your ability to make informed decisions about your business. A stronger accounting program is better equipped to gather, store, and provide complete data sets about your company’s financial inner-workings. This aids in your decision-making processes. Limited visibility can impact your cash flow.
Especially when your statements show you are earning money, but your bank account is constantly low on funds for reasons you aren’t sure about. Poorly managed cash flow can lead to miscalculations on burn rates and runways, inability to cover liabilities and attend to payroll, and loss of investors’ interest. The right software will enable you to manage your cash flow more effectively. It will automatically reconcile your books for you and highlight inconsistencies.
5. Limited System Functionality
Many basic accounting packages offer limited ranges of functions and features. Usually, their providers do this to encourage their clients to upgrade to more comprehensive solutions. But many businesses attempt to reduce their expenses by choosing more affordable, basic packages that may not fully meet their accounting needs.
If you use a basic accounting system, you may find that it cannot provide you with the financial management tools, subscription billing, credit limits, consolidation, and budget roll-up tools you need to manage your business efficiently.
This limited functionality can cause serious problems for your business later down the line, especially as it grows. A better accounting system will provide all the tools you need to optimize your business’s outputs without negatively impacting its flexibility or growth.
If you’ve noticed that your accounting system is experiencing long periods of downtime, hindering your business’s expansion and growth, costing you too much, and limiting your visibility, it’s almost certainly time to upgrade to a more complete accounting package.
There are plenty of great and affordable alternatives on the market today that offer the accounting tools that support your business at every level, in a single centralized program.
Check out FreshBooks.com to see how this accounting software can meet your needs. Integrating an ERP system into your operations will bring your enterprise a myriad of benefits that will aid its growth and assist you in reaching your long-term business goals.