Do you want to scale your business profitably without losing consumer satisfaction? Then it’s important to have a reliable accounting system while your company expands. When you’re only selling a few products per day, a simple process probably has you covered. Once your sales reach dozens, if not hundreds, of products every day, your process either evolves or you watch your costs explode and profits shrink.
Where do you start?
First, inspect your current accounting system for signs it’s holding you back.
What are the signs, you ask?
Let’s dig in!
There’s a good possibility your accounting system isn’t scaling. While change may sound painful, consider how much time and money you’re bleeding on an unproductive accounting process. When your software is limited and you find yourself doing extra effort just to stay organized, it’s time for a change.
Here are 6 indicators that your accounting system is failing you:
Too much manual work
As your business grows, so will the demands on your accounting system. You’ve outgrown your software if you’re struggling to manage your accounts or are undertaking more manual processing to complete important tasks. All of this extra work is both exhausting and a big source of data mistakes.
Too many spreadsheets
Having difficulties integrating all of your accounting data into a single system?
Using spreadsheets outside of your accounting program?
Are you manually updating data fields?
If you said yes to any of the above, yikes!
Your accounting system should combine your critical information in one location. That includes sales metrics, vendor details, outstanding bills, and more. Otherwise, your workload will increase along with your frustration. Even with painstaking work, there’s certain to be incorrect, duplicate, or outdated data in the mix.
Issues with Integration
You’ll need to add more software tools into your management system if you want to improve your customers’ experience or expand your company’s capabilities. If your accounting system is unable to communicate with other mission-critical programs, you will be forced to manage funds in several locations. Again, your data will be inconsistent, and you will have to re-enter quantities just to ensure that everything is handled correctly.
Accounting systems are basically just large databases. If you’re experiencing constant glitches or crashes in your software, you may have a deeper problems that will grow over time. If that’s the case, ask yourself, “Am I wasting time and money just to get the system to work?”.
Remember the more issues you have to deal with every week, the more likely your system is to be corrupted. This could result in IT support or data recovery to constantly maintaining your system or repair it during a total failure. If you find yourself fighting your accounting software for survival, it’s probably time to start fresh with a new install. Better yet, take the opportunity to seek out a cloud based solution that can help you take your accounting to another level.
Lack of flexibility
Flexibility is critical for the growth of your business. If you can’t configure your accounting system to meet your specific needs, it’s not working for you. Because of the uniqueness of your business, you may need to configure and customize the core aspects of your accounting system. If the software is too rigid to allow for new functionality, it is critical to upgrade to a more adaptable one.
Missing Collaboration or Visibility
A transparent accounting process is one way to reduce errors and ensure that your team is aware of the financial performance of the company. Collaborative accounting empowers your entire organization by increasing data visibility for stakeholders. Teams and department managers can better visualize and react to performance metrics if it’s available to them quickly and easily.
Being aware of the “big picture” will assist your team in avoiding wasteful resource allocation, overspending, and lagging sales performance. Staying on top of the financials also helps your team achieve business milestones more efficiently. Having clear and accurate data available as quickly as possible will help management react to emerging issues before they become the next fire drill. If your accounting system isn’t collaborative, you’re missing out on valuable opportunities to improve your financial management!
Final Thoughts: Look for Signs to Improve Your Accounting System
Is your existing accounting system hurting rather than helping your business? You can easily tell if the signs above are present.
For a risk-free migration to an improved accounting system, seek the expertise of professional accountants at Today CFO.
We help e-commerce and construction companies scale their business with comprehensive and highly effective accounting and tax services.