If your organization fails to stay ahead of the trends within its industry on a consistent basis, you will run into frequent problems. In the accounting industry, running into problems leads to thousands or hundreds of thousands of dollars in fees. This makes it crucial that you and your organization understand the common symptoms involved with an outdated accounting software solution.
1. POOR REMOTE CONNECTIVITY
In today's world, the healthiest small business owners and managers utilize real-time accounting and bookkeeping technology for all of their accounting needs. Software as a Service (SaaS) accounting systems are trending within the industry, though they don't usually offer the same functionality as desktop software their modulation capabilities allow companies to manage their accounts specifically to their clients' needs.
2. YOUR BOSS DOESN'T KNOW WHAT IS GOING ON
Most of the time, a lack of communication is the reason why your boss doesn't know what is going on within their organization. This lack of communication can be sourced directly to your accounting software because if it's an outdated practice it is likely clunky in nature, making it harder to communicate clear business goals to your boss.
3. CONSISTENT LATE REPORTING
If you and/or your team are consistently reporting late, you need to take a deep look into both your procedures and software solution because a change is necessary. There are some additional red flags you should look for according to Client Support Services Manager for Cloud 9 Portal, Nancy Gulla.
- Suspense accounts accumulating balances during the period that have to be reconciled
- Waiting for information (e.g. bank statements)
- Transactions that are booked one way during the month, but have to be adjusted at month end
- Differences in intercompany accounts
- Complex allocations or variance calculations
4. MANUAL SPREADSHEETS ARE STILL IN USE
The conventional method of producing a particular type of report is to manually create spreadsheet reports. If your company still uses these, they are probably re-created every month rather than automatically.
5. REPORTS DON'T FIT YOUR BUSINESS
These days small businesses evolve at an extremely fast pace by adding new product lines, service offerings, and changing or adding locations. Often times this leads to them switching their focus, which could make it so that their accounting system is no longer effective for their changes.
6. CALCULATION ERRORS
If you notice that you are starting to see repeated report errors in your tax calculations, margin percentages, and inventory turnover you should evaluate your current account software. These are all glaring red flags that could cost you a ton of money both long term and short term.
7. LACK OF BUDGET
Budgets are a huge part of conducting business efficiently and if you aren't budgeted to spend an annual amount on keeping your accounting system up-to-date, you will quickly accumulate a massive deficit. Software developers consistently push out new versions and updates on a yearly basis and it's important that you budget for those changes in order to keep up.
8. MANAGEMENT TENSION
If you notice that your management team is consistently debating over the direction of your business rather than the accuracy of reporting, it's time to evaluate your outdated accounting system.
If you don't know whether or not your current accounting software solution is outdated, think deeply about the signs that we've just given you to evaluate your current situation. Accounting practices and software are things that should not be taken lightly as they help you manage your most valuable accounts and ultimately lead to getting you paid.