Upgrading or migrating your old, legacy accounting system to a unified, web-based corporate performance management solution could significantly benefit your company.
In his article, “5 Signs You Need a New Accounting System”, Brian Dietz, CPA, of Brittenford Systems, says that, rather than procuring, implementing, and training users on a net-new solution, companies should consider augmenting their existing accounting system with an automated, web-based corporate performance management (CPM) solution.
Here are five signs that your company’s accounting system is inefficient and an explanation of the ways a CPM solution can help extend its life.
Your accounting team is doing a lot of manual work.
If your accounting team is spending a lot of time keying and re-keying data into uncontrolled Microsoft® Excel® spreadsheets, or using spreadsheets outside of your accounting system to work around limited or complicated functionality, they may be under considerable strain and unable to keep up with the pace of business.
Manual work significantly extends the life cycle of business processes. In fact, it took one Quickbooks user 45 days to finish the month-end close! In the absence of an automated solution, users communicate solely through static, multi-page workbooks, phone calls and emails that can quickly pile up and get lost in the shuffle.
If this is the case for your company, it may be time to adopt a web-based, automated CPM solution that can integrate with your core business system.
This kind of solution will extract, organize and house data from your source system in a single location and can automatically feed up-to-date data into the proper reporting format. As a result, your accounting team won’t need to manually copy and paste data from source systems into uncontrolled spreadsheets, collect additional data via email, then export all collected data into reports suitable for management, auditors and regulatory bodies.
You cannot create or analyze reports in real-time.
Users of legacy accounting systems rely on static reports that were manually created over extended periods of time. Reports of this nature can contain many errors and do not reflect the company’s current financials. As a result, executives cannot use these reports to make informed decisions about the future.
A CPM solution that houses all your data in one place will automatically extract and organize data into dynamic reports. As a result, Finance teams will be able to analyze data in real-time and drill through to supporting details for a more complete picture of the company’s financials.
Real-time insight into consolidated data and local financial and operational metrics enables management to make meaningful decisions more quickly and helps companies maintain a competitive edge.
Your solution is expensive to maintain and requires a lot of external support.
Many legacy accounting systems are expensive to maintain because they are limited in terms of functionality. Users must be trained on how to create new kinds of reports and IT must make frequent changes to the system’s structure to accommodate business growth.
A CPM solution that integrates with your company’s core business system is easier to maintain because it does not come with many associated costs and users can be up and running in no time.
The core business system of choice for many companies today is Excel. Companies around the world use the popular application to create templates, spreadsheets and business logic for accounting and other business processes.
However, since Excel does not support user communication or collaboration, departments end up managing workflow through email, risking the loss or misinterpretation of data.
The most effective solution CPM will add structure to Excel processes. As a result, companies will effectively gain an enterprise-scale solution without needing to abandon their core system.
Your solution cannot keep up with your company’s growth.
As companies expand operations and acquire businesses, processes become more complex. For example, as companies grow, they are faced with the need to manage disparate systems and consolidate data across multiple entities and regions, making it difficult for executives to maintain a holistic view of the company.
In addition, increasingly strict regulatory and compliance requirements, such as tightening GAAP guidelines, are forcing companies to demonstrate higher levels of auditability and traceability.
However, most accounting systems cannot accommodate business growth or trace and record user activity without the introduction of manual work or extra costs.
In this case, companies should consider investing in a CPM solution that is flexible enough to accommodate all possible business scenarios and requirements.
A unified CPM solution – that is, one that centrally stores a company’s data and automatically maps it to relevant templates – can support almost any process at no extra cost. Every user will be able to use the solution regardless of their language, location, accessibility needs or skill set.
Your data is not secure.
Accounting teams need to ensure their data is secure in order to submit accurate figures to auditors, meet regulatory and compliance requirements and protect their company against fraud. Financial controls, system backups and data recovery are therefore essential to accounting departments.
Unfortunately, many accounting systems are limited in terms of design and expensive external consultants must intervene to extend the system’s functionality and create reports for uncommon scenarios.
As a result, users of these systems tend to revert to familiar, user-friendly spreadsheets to collect, organize and store data. However, spreadsheets on their own cannot automatically confirm the accuracy of entered data, nor can they prevent unauthorized users from making changes to individual spreadsheets or workbooks.
Most accounting systems are expensive to maintain and cannot protect data integrity or support continuous business growth.
However, companies should not abandon these systems in favor of spending significant resources and dollars assessing internal requirements and procuring, implementing and training users on a new system.
Instead, companies should look to adopting an automated, web-based CPM solution that can seamlessly integrate with their core business system, eliminating the need to maintain multiple applications or buy a new one.
With an automated, web-based CPM solution, companies will experience the best of both worlds. They will get to keep what they already have while gaining the flexibility and power of an enterprise-scale solution.
As a result, users will be able to create accurate, timely, streamlined reports that satisfy auditors and enable management to make better decisions.