Accounting Software » Outdated financial accounting software: A growth stumbling block for businesses

Outdated financial accounting software: A growth stumbling block for businesses

Growing businesses must upgrade wisely to evolve, according to Nick Longden of AccountsIQ

Many growing businesses are still persevering with accounting systems that no longer meet their needs because of indecision and confusion on how to upgrade.

That is the opinion of Nick Longden, chief revenue officer of AccountsIQ, which provides financial management software solutions.

“It’s really difficult for finance leaders because there are a myriad of options,” he says. “Businesses also have many other priorities, which means changing the financial system can get postponed.”

However, Longden warned such delays could pose significant problems for growing businesses unless they have the necessary systems in place to cope with scaling up.

For example, heavier workloads mean more tasks need to be carried out manually, usually in Excel, with the associated possibility of inaccuracies being made in calculations.

“If you haven’t got the right controls and processes in place there is also the potential for fraud as the business owner can’t oversee everything in a growing business,” he adds.

What do businesses need?

According to Longden, growing start-ups can be just as reticent to change how they work as businesses that have expanded through acquisition.

“In a start-up, the owner will have a handle on everything, but this control is devolved into different teams and departments as the company starts to grow,” he explains.

While entry-level, off-the-shelf accounting software may be sufficient when the business is small, such solutions can be found wanting when employee numbers increase.

“The software has to evolve and grow with the business,” Longden warns. “Managers need the comfort of having a certain level of visibility and control even if they’re no longer involved in every decision.”

Reducing the time needed to process transactions, using technology to automatically process information, and giving departments a degree of autonomy is important for growing operations.

Similarly, businesses that have snapped up smaller rivals or made other bolt-on acquisitions could be faced with a dizzying array of legacy accounting systems.

“They can either continue using those systems and manually do group consolidation via Excel or move everything to a system like AccountsIQ,” he said. “The trading entities can all use the system as individual discrete businesses and then click a button to consolidate to the group level.”

Choosing the right solution

Longden believes it’s essential that accountants opt for a cloud-based system – but acknowledges the challenges of choosing the right provider.

Most people stay with the same financial accounting system for up to eight years and for some it’s even longer,” he says. “You need to do your due diligence on both the software and the software vendor.”

Of course, each business is different. For some, budgeting and forecasting may be the priority, in which case they will assess solutions based on their effectiveness in these areas.

Others, meanwhile, may need the ability to integrate with other systems, such as e-commerce platforms if they’re running websites selling products online.

Future plans are also important to consider.

Businesses must estimate how much they are likely to grow, according to Longden, who pointed out AccountsIQ was ideal for those with up to 300-400 employees.

Longden also emphasises the importance of dealing with credible software vendors that can give their clients “a strong long lasting partnership and a really good level of service”.

“We take on board comments from our customers and that’s what drives our future product roadmaps,” he says. “Recently we launched a refresh of our expenses app that was driven wholly by feedback from users.”

A boost to staff retention

Other benefits provided by state-of-the-art financial systems include automated email reminders to chase debtors and creating a more flexible and powerful level of financial analysis.

The technology may also help businesses recruit and retain talented staff, particularly with new entrants to the industry being so used to the powerful technology they have on their mobile phones.

While the requirements of individual businesses will vary, Longden suggests it’s easier to implement a change of systems than many people think. AccountsIQ is typically implemented within 4-8 weeks and the transition is relatively pain free compared to implementing some of the more widely known ERP systems.

“My advice is to embrace the change but plan well,” he says. “If you don’t embrace change at certain points in the evolution of your business, you’ll effectively be going backwards and be overtaken by your competition.”

 

 

 

 

 

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