Many companies are already using some form of digital solution for their day-to-day financial activities. But they may not have awareness around when their accounting software has become outdated or unfit for purpose.
In this article, we highlight the red flags to look out for when assessing your existing system and explain the repercussions of failing to upgrade accounting software when the time arises.
We also discuss the advantages of using a Cloud-based solution and provide some tips for selecting your new accounting software.
7 signs you need to upgrade financial and accounting software
1. A lack of support
If your software provider no longer allows you to log support calls for the system in question, this often means the product is reaching the end of its life and will no longer be updated going forward.
If you have no access to help when faced with software issues, there’s a risk your finance function could come to a complete halt (a scenario that should be avoided at all costs). So, in this instance, it’s crucial to find another accounting system as soon as possible.
2. Your finance team use workarounds
If your finance team frequently completes tasks outside the boundaries of your accounting software, it’s likely that it doesn’t have the functionality they require. Workarounds can be very time-consuming, as data is constantly being shifted from one place to another.
When choosing your next accounting system, you should think about the daily obligations of your team, and ensure the new solution enhances these activities. Financial management software should bring about tangible benefits, rather than creating more hurdles to be overcome.
3. Lack of reporting capabilities
The combination of data and reporting has become a staple of success for modern-day finance managers. If your digital system doesn’t have sufficient prowess in this area, it’s likely you’ll miss out on valuable insights that could otherwise separate you from the competition.
Any accounting software that is taken into consideration shouldn’t just be a tool for data storage, but for data manipulation too, so that true value can be mined from this information. If the CFO can instantly gain a snapshot of multiple performance metrics, this will greatly benefit them in board meetings. After all, today’s CEO expects the CFO to play a prominent role in key strategic decisions.
4. Inability to integrate with other systems
The best financial management solutions are generally adaptable and can integrate with other platforms. If the software you use is rigid, has very defined rules, and fails to bend to your needs, there’s a chance it will stifle you when your business evolves.
Many companies now use a multitude of systems for their various functions. So, it’s integral these platforms integrate seamlessly if the best results are to be achieved. Otherwise, a lot of time will be wasted making the same data updates in several locations. Something as simple as being able to export to Excel is beneficial, as some employees may prefer to analyse data in this format.
5. Previous capabilities have been lost
If feats that were previously possible can no longer be achieved, this should serve as an instant warning. It often means you’ve outgrown your accounting software. There’s always a risk any system could become obsolete, especially if it has limited capacity in the first place.
Perhaps your company has expanded, which has led to the finance team carrying out more calculations, processing more transactions, and storing more data. The software may simply not have the capacity to deal with such quantities. In this case you should upgrade to a system that matches your size, and ideally one that is scalable too.
6. The software doesn’t facilitate automation
Automation has become somewhat of a sacred word for many businesses. If your financial software doesn’t enable any form of automation, you’re missing out on a transformational capability.
If, for example, some transactions could be updated automatically, the finance team wouldn’t have to spend so much time doing manual data entry and could instead focus on more impactful work. Decreased human interference leads to fewer mistakes and quick work completion due to better efficiency.
7. Increased complaints from users
Perhaps the most compelling sign that a change is needed is when users are regularly complaining about the accounting software. After all, it’s these people that have the most financial expertise in your company (and are the most in touch with industry trends).
If a finance manager ignores repeated criticism of the system, there’s a higher risk they will lose their best employees. It could hinder their ability to attract new talent too. Employees have a bigger say than ever, and finance workers expect to have the tools they need to succeed, thrive, and advance their career.
What are the risks of not upgrading your accounting system?
Non-compliance with latest regulations
One of the biggest risks of using outdated finance software is not keeping up with the latest legislation within the industry. If employees must maintain compliance manually, it’s more likely they’ll miss an important update.
Higher chance of security breaches
Legacy systems will inevitably have legacy protocols when it comes to security. Without modern safeguards, finance teams could be vulnerable to hacking, which would be particularly damaging given the sensitivity of financial data.
Methods that are manual and don’t embrace automation usually lead to lower data quality (as there are more instances of human error). It’s also difficult to draw detailed insights from data without using the latest technology.
Old software is often very limited and fixed in terms of its capacity. It won’t have the flexibility to store more data or complete more processes as your operations expand.
If employees are made to use outdated technology, they’ll perhaps become frustrated as they’re unable to achieve the results they want. They’ll probably feel they’re on the wrong path too, as they’re not developing their skill set.
If a financial task is being completed in five steps instead of one, the business isn’t performing at optimal efficiency. Poor efficiency can be detrimental at a time when economic conditions are turbulent. Key stakeholders won’t be able to quickly get hold of financial data that could drive positive change.
Many out-of-date technologies are on-premise systems, meaning they can only be accessed on specific computers in a fixed location. With many people now adhering to some form of hybrid work model, this doesn’t give them the remote access they need (at a time when finance teams desperately need access to accurate data to influence decision-making).
Not upgrading your accounting solution could ensure financial performance isn’t easily viewed by everyone in the finance function. If many, non-integrated systems are used for separate processes, this will lead to multiple versions of the truth. In turn this creates data duplication and limits any kind of consistency or cohesion.
Advantages of upgrading to Cloud-based accounting software
Access the system anytime and anywhere
During the pandemic the importance of remote working increased significantly. With many offices closed, it was crucial that employees could access their work from home. For businesses with more traditional accounting solutions, they may have had to halt their operations throughout the various lockdowns. With new accounting software, your physical location is not a barrier.
Better financial data
Remote access doesn’t just serve to boost productivity, it helps to keep your financial data up to date too. If a member of the finance team learns of a new transaction when they’re out of the office, they can make this update immediately with Cloud technology. This reduces the likelihood of your reports being fuelled by historic data.
More secure data
Cloud-based accounting solutions are more secure too, which is a crucial trait when dealing with sensitive information. The system is accessed via the internet rather than being installed physically, meaning it is less vulnerable to sabotage or damage. Data is backed up on the Cloud rather than on a local server, with many providers playing an active role in the protection and storage of your information.
The benefits of internet-based access are felt both ways. If the provider needs to access your system (perhaps for support or to apply an update), they can do this remotely. This will likely lead to lower costs, as they won’t need to travel to you. It also means that you should always be on the latest version of the software, with no need to sacrifice time for installations. Due to instant upgrades, you’ll never have to ask what the latest accounting software is.
Ensure you stay compliant
By being on the latest version, not only do you have access to the latest software features, but you’re also more likely to stay compliant with the latest finance-related legislation. This reduces stress for finance teams and minimises the risk of being subject to fines. With old-fashioned accounting methods, there’s more emphasis on employees to ensure compliance.
How can Advanced help with Cloud-based accounting software?
When searching for the latest accounting software on the market, it’s important to find a good fit for your needs, values, and ambitions. At Advanced we provide an accounting solution called Advanced Financials. Not only is it Cloud-based, but it was also made by finance people for finance people. It can assist with complex calculations, while simultaneously being simple to use.
Advanced Financials is a scalable solution, so it can increase its processes in line with your growth. This ensures it won’t become obsolete and serves as a long-term solution. It has extensive functionality, including the likes of accounts payable / receivable, sales invoicing, credit management, bank reconciliation, purchase management, asset management, expenses management, and much more. This effortless integration of functions creates one version of the truth and enables automation. And with over 1,000 customisable reports, CFOs can easily find the data they need to influence business strategy.
If the time has come to migrate from manual spreadsheets or upgrade accounting software, and you’re looking to avoid the pitfalls of outdated technology, be sure to read more about our Cloud-based accounting software, Advanced Financials.