by Saeward Schillaci, The Resource Group
Even for a business with perfect accounting systems and easy-to-manage resources, proper accounting takes time and effort. On the other hand, companies with terrible accounting systems find themselves wasting time and troubleshooting issues constantly.
Realistically, most businesses have an accounting system that is somewhere in the grey zone between perfect and terrible. How does your company decide when its accounting system has crossed the line from adequate to inadequate? For most professional services firms, complex accounting requirements make this an especially important question. Allocating resources, budgeting and forecasting, tracking projects, and billing clients can all be particularly difficult for this industry. How do you decide when it’s time to take the leap and look for new accounting software? In our experience working with professional services firms, we’ve noticed certain broad issues that are a symptom of needing new software. Asking yourself these four questions can help you determine if your current software is holding your business back:
1. How long have you used your current accounting software?
Just like any other technology, accounting software has a shelf life. After about five to ten years, it frequently becomes difficult to get software updates or support, and software compatibility issues often become common. By the time a system has been in use for a while, the sprawl of customizations and workarounds often means that only a few people really know how to work with the software. In addition, if you have outdated software you might be missing out on a lot of awesome new functionality that has become common since your last implementation. If your software is more than five to 10 years old, you should consider something newer.
2. How many different tools do you use for accounting tasks?
As businesses outgrow their systems, they tend to end up combining a lot of disparate software in order to complete daily tasks. Spreadsheets get more numerous and more complicated, different pieces of software are used for each different function, and a lack of integration ends up demanding manual data entry. All these different tools can create information silos that are confusing, time-intensive, and error prone. With professional services firms, this can be a major hindrance to productivity and service quality. If you use a different tool for each accounting function, think about the potential benefits of implementing an integrated platform.
3. How difficult is customer billing?
For professional services firms, keeping track of clients and projects is critical to accurate and timely billing. Firms that have inadequate accounting software often experience their monthly billing as a lengthy nightmare. Inefficient billing processes require constant manual intervention to create service descriptions, apply write-offs, meet client invoicing preferences, and ensure that billing matches the project tracking. If your business’s billing system is a major headache, you should look for new accounting software.
4. How much valuable data becomes buried in your systems or spreadsheets?
Do you regularly use overly complex spreadsheets to make business decisions? Does forecasting and budgeting feel like playing Clue while sharing one pen with six people? In order to be successful, a business needs to access the right data in order to make effective decisions in a timely manner. Information silos, manual budgeting processes, and outdated software can all lead to buried data. In contrast, a good accounting solution will allow your firm to gain insight with real-time data visibility. If you want easier access to better data, you should seek out new software.
Overall, many professional services firms struggle with outdated, complex, error-prone accounting. If your company can be included in those ranks, you’d be wise to start shopping for better accounting software! Feel free to contact us at The Resource Group for more information.