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Expert Advice for Medium and Midsize Businesses

How to Know When to Dump Your Small Business Accounting Software

Rudolph Lukez
Director, ERP Product Marketing, Oracle

A few years ago, I walked into a company’s accounts payable department. It looked more like a flight-control station than a bookkeeper’s desk. An employee had three computer screens in front of her, each displaying a different program. One was a sales ledger, another was an inventory management program, and the third was the accounting system. 

Most (if not all) small and medium businesses face this same problem as they evolve and grow. Their small business accounting software (think QuickBooks and Excel) are not flexible or adaptable, so the business has to take a piecemeal approach to accounting, including integrating information across the organization. Plus spreadsheets, in particular, are prone to errors when copies are forwarded, modified and shared.

This means adding a host of add-ons and upgrades to satisfy ever-changing accounting needs. Such a disjointed approach leads to inefficiencies and missed business opportunities.

So, how do you know when it’s time to leave your small business accounting software behind? Look for these 3 warning signs:

1. Impossible to Modify Your Systems

Basic accounting tools are static. If you need to make any changes, you might need a complete rebuild, which quickly consumes money, time, and resources.

For example, you may need to make changes to your chart of accounts because you are moving into a new geographical market, starting a new product line or service, or you’ve acquired a new company. With growth and expansion comes the need to add new operating divisions / offices, different plans for various branches, etc. And let’s not even try to walk through all the different reporting regulations for all the new regions.

As it grows, your business must have the flexibility to adapt its chart of accounts to its new needs. Outdated accounting tools makes this exercise extremely cumbersome. If you’re not careful, the impact of such dramatic changes can be significant.

I stumbled upon just such an issue recently when I tried to place an order on a company’s website. This company had just merged with a larger organization and was not accepting orders for 10-14 days while it integrated its ERP system with its parent company’s system. To say that that is a huge competitive disadvantage in this age of real-time transactions is an understatement.

2. Difficult to Scale Horizontally

Remember my example of the employee looking at three different screens? That’s a prime example of an inability to scale horizontally.

As companies grow, they often add disparate point solutions to manage various functions, such as procurementhuman capital and inventory management. When disparate systems don’t work together, you can’t see how different factors impact each other. You may need to add staff or even more systems to reconcile the information that’s reflected in the general ledger. This boosts your costs, suppresses your profitability and challenges your growth curve.

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The corollary—difficult to scale vertically—is equally troubling as adding users becomes difficult and system performance degrades rapidly across all operations.

3. Accounting System Maintenance is Too Complex (or Impossible)

Overall maintenance of multiple data systems easily becomes unmanageable. Instead of working in one environment with an integrated, common infrastructure, you’re juggling several systems that require individual updates. Each platform likely has its own release cycle, so, before you know it, your IT department and other key employees are stuck in constant upgrade mode and distracted from their responsibilities. Not the best use of talented resources.

In a worst-case scenario, staff may ignore updates or upgrades. This means your company can’t take advantage of new technologies and may face increased non-compliance risks.

Older, outdated systems may also make your company less attractive to tech-savvy employees who expect to access data on mobile devices, impacting your employee recruitment initiatives. And in a worst case situation, your current system may no longer be supported (or, even worse, the software vendor has gone out of business).

The Solution: End-to-End Financials in the Cloud

Primitive accounting systems are like boat anchors that hold your company back. They’re the reason many small and medium businesses are moving to cloud-based accounting and financial reporting platforms—such as Oracle Cloud for Finance—to gain a holistic view of their organization. When you work with Oracle small business solutions, you don’t have to worry about entering new markets or acquiring new companies. You can support your growth curve by seamlessly integrating key business processes into a single platform that’s easily accessible from various devices.

Cloud-based financial platforms also offer analytical capabilities that Excel-based spreadsheets lack. You receive regulatory, management and financial reports that provide valuable insights.

So, if you see any of the above warning signs on the horizon, lift the anchor that’s holding your business down. See how a move to the cloud can free your organization to scale rapidly and grow with confidence.

Learn more about how to grow your SMB. Check out Oracle’s solutions for SMB, and when you are ready, chat with an Oracle SMB expert who can help you GO and grow with confidence. 

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