Using the wrong small business accounting software can reduce the efficiency of your business, increase your operating costs and make controlling your operations more difficult.
To help determine whether the accounting solution you’re using is hindering your business health, look for the following symptoms:
- You don’t have easy access to the information that would tell you how your business is performing. Even simple information like how much your customers owe you isn’t immediately available. If you find yourself making extensive use of Excel to generate reports your system doesn’t provide, you’re probably suffering from this affliction, which leads to delays in getting reports, errors if data isn’t re-keyed accurately and ongoing concerns about the time and cost involved in re-keying all those numbers.
- Even when you do get the information it never quite seems to feel right. Maybe your gross profit figure fluctuates wildly, your stock on hand doesn’t gel with what’s in the warehouse (creating cash flow problems due to holding too much or too little inventory) or your reps just laugh when sales analysis reports are tabled!
- Your existing system is starting to run really slowly, taking ages to process transactions and even longer to generate reports, and the problem gets progressively worse as more users log on.
- Sometimes the system crashes altogether and you have to restore to a back up and/or re-key data. (You do have a back up, don’t you?)
- Your software is a score-keeping solution only, and lets you record transactions, but does little to help you manage the business. For example it might have limited stock control features. Again over-use of Excel can be symptomatic of this problem. If you’re keying inventory data into Excel to decide what you need to order, then keying that data back to your accounting system to raise the purchase orders, it’s probably time to think about a smarter system.
- What used to take half an hour a week now takes a full day, and you worry that the only person who can operate the system is the bookkeeper. What’s going to happen when he or she is off sick, on holiday, or resigns?
- You’re spending a large amount of money on annual maintenance for your software but you know you’re only using a fraction of that software’s features, and never seem to get any of the new features that you actually need and want.
- You’re constantly updating contact details in multiple databases – customers and prospects all need entering into your accounting system, email address book and your customer relationship management (CRM) database. And even then you’re not sure the data is all up to date. You might also be wasting time re-keying data from your point of sale system or an e-commerce solution on your website into your accounts package.
- You worry about the possibility of fraud and whether your systems are suitable to help you minimise that risk.
Any one of these issues can cost your business hundreds or even thousands of dollars every year. Especially damaging are those symptoms that relate to lack of information or wasted time.
Does your business suffer from any of these symptoms? Or perhaps you’ve noticed some different ones? If you’ve managed to address any of these issues, we’d be keen to learn what worked for you. Share your experiences with small business accounting software.