Accounting software doesn’t usually get a lot of attention when a business or nonprofit is just getting started. Buyers almost always select a well-known option that’s easy to use and offers basic functionality to meet the fledgling organization’s limited needs. The startup mentality is so geared toward growth that bookkeeping and accounting are little more than an afterthought, which is fine for a while. At some point, though, that basic accounting package becomes inadequate. It is no longer able to cope with increasing demands and can even start limiting the organization’s growth by creating inefficiency and yielding inaccurate data.
How do you know when you’ve outgrown your accounting system? Here are six reliable indicators that it may be time to move on from your current software.
- You’re relying heavily on spreadsheets to support financial processes and reporting. Are you exporting information and data into Excel spreadsheets? Massaging or customizing reports to meet specific needs or perform multi-entity consolidations? If so, you’re not alone. Over time, many organizations begin to develop Excel-driven workarounds to meet their daily, monthly and annual accounting and reporting requirements. These solutions often reflect great ingenuity but no matter how well-designed they may be, adding manual processes builds inefficiency into the system and opens the door to faulty data.
- You need stronger security and controls around sensitive data. Legacy accounting systems are vulnerable to technical issues and system crashes, resulting in loss of data and time-consuming restorations. Moving to a cloud-based solution eliminates this risk and defends the integrity of your information through continual backups on servers mirrored across various geographies. An updated system also enhances security through granular permissions that can be implemented on a need-to-know basis, instead of an all or nothing model.
- You lack sufficient real-time visibility. Are you struggling to keep up with leadership or management requests for data and reports? Is updating accounts and posting entries becoming an overly laborious process that is impossible to keep current? Constantly playing the data entry catch-up game leads to untimely financials, forcing leaders to make decisions based on obsolete data. To make informed business decisions it is imperative that your accounting system offer real-time visibility into company financials, along with the ability to utilize custom reports, dashboards and integrations for added clarity.
- Your financial processes are no longer efficient – or even appropriate. Manual tasks lead to inefficiencies and errors. As your organization grows, so does the complexity and volume of your accounting needs. The sheer number of entries might become overwhelming to manage with your current software’s features, or perhaps you need to re-think how you record revenue. For every accounting obstacle that accompanies organizational growth, the solution hinges on a system sophisticated enough to provide advanced functionalities that can accommodate your growing needs.
- Your team lives in the cloud but your accounting system does not. Do you have the ability to log in and access your financials from any location? With the increasing trend toward remote work, an accounting system that provides easy accessibility is a necessity. Like real-time data, secure remote login capability for a variety of devices is no longer a feature that’s just nice to have; it’s a must for dynamic organizations that want to stay competitive in the digital age.
- Your accounting system can’t grow with your business. You’ve got a vision of serious growth for your organization; selecting a tech stack that’s scalable and can grow with you without losing efficiency is crucial for making that vision a reality. As you’re nurturing a growth-enabled mindset in your team, don’t forget the importance of building a solid accounting technology foundation that allows for automations and integrations down the line to meet your evolving needs and goals.
If you can relate to any of these situations, there’s a good chance your organization has outgrown your current accounting system. Don’t let last year’s accounting software create a drag on your growth trajectory. Our Financial Management Solutions team can help you explore the advanced accounting tools available today and find the solution that’s right for you. Contact your RKL advisor today to learn more, or reach out using the form below.