Many companies will already be using some form of digital solution for their day-to-day financial activities. But a lot of them will perhaps be oblivious to the fact that their system is no longer fit for purpose.
In this article, we highlight the red flags that suggest you should upgrade your current accounting software, as well as the risks associated with ignoring these signs.
We also discuss the advantages gained from using cloud-based accounting solutions, and how to choose your next system at the right time.
Which companies are more likely to need a new accounting solution?
There’s no specific type of company that’s more prone to needing an accounting system upgrade. There are perhaps industries that are more susceptible to frequent change, which will impact the needs of the associated businesses. There are also differing levels of ambition within companies, which can lead to growth (and therefore an alteration of priorities).
However, all businesses with a finance function should regularly assess the viability of their existing accounting software, because, as we’ll come on to, not doing this can have costly consequences. Not only should they be alert to the need for a change, but they should also select a solution that suits their approach, and switch at the optimal moment.
If your finance team doesn’t use any form of digital assistance, this is the most obvious sign that a change is needed, as it is becoming less and less feasible to survive when utilising traditional methods in accounting. If you’re already on the technological ladder, there are more subtle signs that suggest it’s time to take the next step up.
What are the common signs a business should upgrade its financial software?
The provider is no longer giving support
If your software provider doesn’t allow you to log support calls anymore for the product in question, this can often mean the system is reaching the end of its life and will no longer be updated going forward (which will ultimately lead to further issues).
If you have no access to help when faced with a software bug, there’s a risk your finance function could come to a complete halt (which is an unthinkable scenario). So, in this instance, it’s crucial to find another accounting system as soon as possible.
Your finance team must use workarounds
If those in your finance team are frequently completing tasks outside the boundaries of your accounting software, it’s likely that it doesn’t have the functionality you require. Workarounds can be highly time-consuming, as data is constantly being shifted from one place to another.
When choosing your next accounting system, you should think about the obligations your finance team faces daily, and ensure the prospective solution enhances these activities. Financial management software should bring about tangible benefits, rather than creating more hurdles to be overcome.
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 it. If the CFO can access performance snapshots instantly (for a variety of metrics), this is extremely beneficial in board meetings. After all, today’s CEO expects the CFO to play a prominent role in key strategic decisions.
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 for these platforms to integrate seamlessly (if the best results are to be achieved). Otherwise, a lot of time will be wasted by having to make the same data updates in several different places. Something as simple as being able to export to spreadsheets is beneficial, as some employees may prefer to analyse data in this way.
Previous capabilities have been lost
If feats that were previously possible can no longer be achieved, this should serve as an instant red flag. It usually means you’ve outgrown your accounting software. There’s always a risk any system could become obsolete eventually, especially if it has limited capacity in the first place.
Perhaps your company has expanded, which has led the finance team to carry out more calculations, to process more transactions, and to store more data. The software may simply not have the scope 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.
It 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 as much time doing manual data entry and could instead focus on high-level work that is more impactful. Having less human input reduces mistakes too and increases overall efficiency through quicker completion of work
Increased complaints from users
Arguably the most compelling sign that it’s time for a change 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. Employee wellbeing is bigger 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
- Higher chance of security breaches
- Poor data
- Insufficient storage
- Unfulfilled employees
- Dissatisfied customers
- Inefficient processes
- Insufficient accessibility
- Low clarity around performance
- Multiple sources of information
What are the long-term 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 the cloud, your physical location is not a barrier.
Better financial data
Remote access doesn’t just serve 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 a cloud-based system. This reduces the likelihood that your reports will be fuelled by historic data.
More secure data
Cloud-based accounting solutions are more secure too, which is a crucial trait when dealing with sensitive financial information. The system is accessed via the internet rather than being installed physically, meaning it is less vulnerable to theft, sabotage, damage, or misplacement. Data is backed up in 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 or productivity for installations.
By being on the latest version, not only do you have access to the latest features of the software, but you’re also more likely to stay compliant with the latest finance-related legislation (as and when it changes). This reduces stress for finance teams and minimises their 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?
At Advanced we provide an accounting solution called Cloud Financials. Not only does it provide the benefits associated with cloud computing, but it was also made specifically with finance teams in mind. It can assist with complex calculations, whilst simultaneously being simple to use.
Cloud Financials is a scalable solution, so it can ramp up its processes in tandem with your ambitions of growth. This trait ensures it is far less vulnerable to becoming obsolete, and makes it a viable option for the long-term (which removes the inconvenience of having to switch regularly).
This accounting software has functionality for accounts payable, accounts receivable, sales invoicing, credit management, bank reconciliation, purchase management and more. With such a range of capabilities in one system, it removes the need to reconcile and integrate multiple platforms (whilst also decreasing duplicate data and providing one source of financial truth for all employees). The interconnectedness between these separate functions makes automation a real possibility too.
The accounting software also has over 1,000 customisable reports, so you can seamlessly compile financial data in a way that suits your needs. With a clear view of key financial metrics (thanks to up-to-the-minute dashboards), it’s easy for the CFO to convey the company’s health in board meetings. Your finance team are empowered with valuable insights, using reports fuelled by accurate data to drive top-level strategic decisions.
If you think it’s time to upgrade your financial solution, and you’re looking to equip your finance team with the power of the cloud, be sure to take a closer look at our Cloud Financials Accounting Software. The system is tailored for medium to large-sized businesses.