When to Upgrade An Accounting System

May 5, 2008

3 Min Read
When to Upgrade An Accounting System

By Louis Rosas-Guyon

Think of your business — or your customers’ business — as a potted plant. As the plant grows, you’ll need to move it into a bigger pot if you want to sustain healthy growth. Now, let’s apply that example to a typical office accounting system.

As a business grows, you should reassess the company’s accounting software capabilities. You want to prevent problems that might slow growth. And you want to be pro-active. Installing a new accounting system is not something you want to try when your company’s resources are stretched thin.

The first step is to study a business’s exact needs. How does a company expect to evolve over the next three years? What will the business need over that time, and how much spare capacity needs to be factored into a potential accounting system?

Remember that accounting systems can offer the most reliable data when they are used properly over a several years. You must choose a system that will fit medium-term business plans. You must also allow enough time for training of workers so they can efficiently use the new system.

What To Expect from A New System

Good accounting software is more than just number crunching. Contract management, customer relationship management (CRM), e-commerce, multiple currency management, logistics, project management and digital dashboard/business intelligence systems can all now be integrated into accounting systems.

This provides a total data analysis and reporting capability hitherto unknown in business. You can now command the most timely and critical data at your fingertips for rapid and accurate decision making.

All these features are only available in mid to high-end software systems for medium to large-sized businesses. All these systems include very expensive up-front costs for the proper integration of the various service offerings required by your company. However, once that expense is amortized over the life of the system, it is ultimately negligible compared to the enormous benefits gained.

Purchasing Considerations
As always, there are several issues to consider before you — or your customers — spend money on a new syste,:

  • Can the new accounting software be customized to fit specific business needs?

  • Can it accommodate growth (e.g. more users)?

  • Will the new system be able to communicate with older systems?

  • Can the manufacturer provide competent customer service?

Again, I must stress to be sure to budget enough time for training. At minimum, your accounting staff should receive all the training required to ensure the orderly conduct of business after the new system is implemented. Your old system information should be migrated to the new system to ensure continuity of information and to provide you with the immediate analysis benefits. While you can rely on printed materials for training purposes, nothing is better than actual human teachers that can give classes.

For additional questions to ask before you buy any technology system, check out some of my more extensive thoughts here.

Contributing Blogger Louis Rosas-Guyon is a business technology expert with R-Squared Computing, Inc. His opinions do not necessarily reflect those of The VAR Guy.

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