Blog / Choose wisely: 8 ways to ensure your accounting system lasts the life of your business

Choose wisely: 8 ways to ensure your accounting system lasts the life of your business

Everyone has heard the jokes about accountants who never leave their office and have no sense of humor, but perhaps this comes from having to spend too much time working in a subpar accounting system instead of having one that actually works for them. It’s time to reduce your workload and get your accounting system to do the heavy lifting for you. Let’s discuss eight ways to make your accounting system work for you!

1. Get the right accounting system and get out of spreadsheet hell

Accountants who find themselves maintaining a large number of spreadsheets may have the best of intentions, but can easily find themselves on a slippery slope.

Multiple spreadsheets can exist for valid reasons. The existing accounting system is not real-time. It does not track the information in “the way we need.” There is simply information the system doesn’t track. It may not have been implemented correctly. The need to carefully track cash necessitates an up-to-date cash balance, perhaps even across several organizations. The business has outgrown the capability of the software. You get the idea.

The slippery slope comes from entering data more than once and keeping manual systems. If you are old enough to remember the old paper journals and ledgers, you will know the difficulty in keeping everything perfectly balanced. You spend so much time trying to maintain the integrity of manual systems that you neglect the things that really matter.

Find yourself a system that actually meets your needs and take your life back. Get rid of those spreadsheets, unless they pull real-time information.

2. Managing cash flow is not the same thing as tracking cash

A typical low-end or mid-market accounting system defines managing cash flow as tracking cash, deposits, and payments. Expected receipts or cash outlays depend entirely on cash balances or scheduled receipts or payments from accounts receivable and payable. What they usually totally neglect is everything else. What about outstanding purchase orders? Sales orders that have not been shipped? Planned equipment purchases or disposals? The list is extensive and it is often these items that cause your cash flow management to fail.

A proper cash flow management system (yes, they do exist) will track all of these activities and allow you to make adjustments for dates and amounts as necessary. Imagine having a large receivable scheduled to come in at the end of next month, just in time for payroll, and you get a call to let you know the payment will not be received until the middle of the following month.

A cash flow management module should allow you to quickly change the date and see how that affects you. Or perhaps you have new equipment worth several million dollars arriving in six months. How does that affect your cash flow forecast?

You know how you hate those conversations where you go to the president and say you unexpectedly need more cash? Don’t fly blind when it comes to managing cash flow; pick a new system that tracks all cash inflows and outflows, whether confirmed or projected.

3. Data warehousing is out, business intelligence is in

For many years, Tier One systems such as SAP and Oracle had the advantage over mid-market systems when it came to accumulating information from diverse systems and making it available to users and analysts. A very real problem for most companies was the need for incredibly expensive data warehousing projects that rarely took less than a year to put together and could cost well into seven figures.

The progression of SQL databases, especially Microsoft SQL with its SQL Server Reporting Services (SSRS) and Power BI, has made pulling together information from one or more databases significantly easier than it was even just a few years ago. This information can be easily published through a number of report writers including spreadsheets, which are so well-loved by accountants, or in graphical interfaces usual for senior management and executives. Instead of trying to filter reams of data, decision-makers can now easily access the KPI’s or metrics necessary to properly manage their organization.

In many cases, a business intelligence solution for a mid-market accounting system can be installed in one day and producing reports the next. Dashboards and mobile reporting are readily available now to mid-market organizations for less than six figures.

4. Real-time posting is where it’s at

When the president or CFO walks into your office and asks for a cash report, you don’t want to be using a system that relies on batch processes to move information to the general ledger and cash management modules at month-end. There are a few processes that are never going to be one hundred percent real-time, such as revaluation of foreign currency receivables and payables at month-end for realized and unrealized exchange gains or losses. Tracking inventory consumption, invoices, vendor payments, and cash adjustments should not be in that list.

If you don’t have a real-time system that updates all modules when you post transactions, you need to be considering a new system… or a new job! Remember, it is the manual processes that suck so much time and life out of you.

5. With the right accounting system, consolidations won’t make you want to pull your hair out

If you are one of the lucky accountants that need to pull together financial results for multiple organizations, you don’t have to dread month-end if you have the right system. Intercompany and related party transactions can happen in a real-time mode throughout the month. Properly designing the general ledger and cost dimension tracking can eliminate many or all of the intercompany eliminating entries you may be forced to reconcile now.

Today’s consolidations modules are generally easy to use and can accommodate unlike charts of accounts, different year-ends, varying consolidation methods, and meet international accounting standards. Intercompany and related party transactions can happen in real-time mode throughout the month.

6. You probably use Microsoft Office already, what if your accounting system worked the same?

Microsoft Word and Excel have come a long way since they first appeared on the old Macintosh computers. They are now accompanied by a number of additional modules including Outlook, SharePoint, OneNote, PowerPoint, and others. All of them now share a similar look and feel so that users can easily transition from one to the other.

What if your accounting system had the same “look and feel”? What if it had the same keyboard shortcuts? Do you think users would find it easier to learn the system? Most new employees are familiar with Microsoft Office before they come to work for you. Learning a new accounting system with a familiar interface would cut days and weeks off their learning curve.

7. Pick the right mid-market accounting system and you will never need to change again

One of the best accounting systems in the world is QuickBooks. Given that this is generally an article about mid-market accounting systems you may find that comment a bit strange, but it is true. If you have a start-up business and limited capital to invest in an accounting system, or limited bookkeeping or accounting capability, QuickBooks just makes so much sense. Buy it and get your system up and running quickly, hence its name.

But be warned. You are almost guaranteed to need to change systems if the organization grows or develops any complex business requirements. It would be like sending out a pickup to pull a 53 foot trailer full of heavy equipment. It wasn’t designed to do that and even if it could move the trailer, you know problems are inevitable. Putting the right truck in front of that trailer will make the job a breeze and the same is true when you need a mid-market accounting system.

Today’s business environment has become so complex that many mid-market organizations need the capability of a Tier One system but can’t afford the cost or complexity. Picking the right mid-market system today means you will never need to upgrade as some are capable of handling hundreds of concurrent users and offer advanced functionality at a fraction of the price of a Tier One system. Choose correctly and you will be able to retire with that system.

8. Enter data once, use it many times

The best thing you can do for your organization is to find a system that allows you to enter data once and then use it many times. This is a prerequisite for real-time accounting systems. Sometimes it happens by having an integrated system allowing payroll transactions to be posted real-time into the general ledger and cash modules. At other times, it requires an integration field mobility system that provides real-time or near real-time data to the accounting system for payroll and invoicing.

Data entry entries will decrease dramatically. The time required to continually reconcile diverse systems will disappear as there becomes only “one version of the truth.” Your staff can spend time on things that matter instead of entering data into multiple systems and reconciling them. Your after-hours time will become yours again.

No one benefits from having multiple, disconnected systems. Sometimes you will not be able to do everything in one database, but hold firm on the principle of an integrated system. If someone needs a specialized, stand-alone system, insist that there are multiple options to reliably integrate the data.

Contact us here if you’d like to discuss an integrated accounting system that can enhance your business and grow with your organization.


*Looking for an integrated payroll app for Microsoft Dynamics 365 Business Central? Read our previous blog here where we review three of the best integrated payroll apps that could enhance your Microsoft Dynamics system.