The 7 signs of an Ageing System: Signs that you and your software need a change
A key element in setting up a new business is buying an accounting system to help with the bookkeeping of your new enterprise. This vital piece of business software takes care of invoices, expenses, reporting and payroll.
Over time, as your business grows in size and complexity, you may begin to notice errors creeping into day-to-day operations and business processes taking longer than they used to.
When these changes start happening, it’s time to consider an upgrade to software that not only provides accounting functionality, but has the capacity to integrate with your other key systems and automate your many manual processes.
How will you really know when is the right time? There are many signs that your old system may not quite ‘cut it’ anymore, but here are seven of those key signs.
1. Your systems are getting slower and slower
When a business first purchases an entry level accounting solution, they generally only have one or two users and fairly simple processes, typically built around capturing sales and purchasing information.
As your business grows, more people need to use the system to do a greater range of things. In the background, the underlying technology is trying to cope with an expanding database, while providing instantaneous access for multiple users and processing workloads of increasing size and complexity.
You might have noticed that some of your processes are no longer as efficient as they used to be. Your banking now seems slower and that key sales report is taking half an hour to generate instead of mere seconds when you first began. At times the entire system freezes, or even crashes (usually when you most need it).
If you are experiencing problems similar to these, you need to start the planning process now.
2. Your Add-ons have Add-ons
Your business changes over time. You add new products and services and change or discontinue others. You recruit more people, upgrade equipment and open additional offices.
Basic accounting packages are often just that, basic. To keep up, businesses start to use ‘add-ons’ to supplement the functions of the main accounting software. For example, adding new software to help with an expanding payroll, and then later another to manage the growing inventory.
Each piece of software in itself made sense at the time. But after a while the business ends up with an expensive ‘spaghetti’ of software systems that cause just as many problems as they solve. Inevitably, these systems don’t talk to each other; have multiple licensing agreements and support contracts and require regular upgrades that, in turn, impact the performance of all the other strands of software.
Maybe it’s time to take your business to the next level and consider an integrated system that services all your needs?
3. Using spreadsheets to manage critical business processes
If the required add-on is not available or too expensive, businesses often turn to the trusty Excel spread sheet. They are easy to use, allow you to organise large amounts of data quickly and there is no software to purchase.
But, like software add-ons, one spreadsheet leads to another, which leads to many spreadsheets, often inter-linked and of increasing complexity. This is not only time-consuming to manage; it also exposes the business to the risk of potentially undocumented and unsupported solutions being created “on the fly”.
When you step back and consider how much effort goes into this, you will quickly start to see the inherent value in a new solution.
4. Using manual workarounds and procedures to fill the gaps
Despite the number of add-ons deployed or processes contained in spreadsheets, you and your people may still find yourselves continually stepping out of your software and using manual processes to fill gaps.
Manual work around procedures are not only time consuming, they also are liable to increase the risk of errors, fraud and the threat of cyber-crime. If you are surrounded by poorly integrated software and reliant on spreadsheets and manual processes, then it’s time to act.
5. Re-keying the same data into different systems
Re-keying the same data into two different systems due to a lack of integration is clearly inefficient. Often these duplicate processes develop into time-consuming bottlenecks when, early on, the effort seemed minimal. However, as your business grows, so does the amount of data requiring entry. What was once a simple process can become an all-consuming task for one or more members of your team.
Re-entering data is not only costly, the lack of ‘real-time’ integration between different systems means you are often left waiting for data input to ‘catch-up’ and then ‘sync’ before you can run reports and get the information you need.
Software needs to support your business processes with minimal intervention and if you have many different solutions, they need to talk to each other.
6. You are seeing more and more errors
As a small business owner, you can usually manage mistakes easily as you are aware of everything that is going on; with a hands-on involvement in the business. You (hopefully) pick them up, correct them and move on before any real damage is done.
As your business grows your manual processes continue to create errors, but at an increasing rate. You and your team find it increasingly difficult to be across everything. You gain more staff, suppliers and customers and potentially, more and more errors being missed. The result is lost time and income, as well as the negative impact on customer satisfaction.
7. You feel tied to the Business
As a business owner or senior executive, the business relies on your stewardship. You accept this responsibility, but need information to run the business effectively.
If you perform a process that no one else understands or is considered too complicated to handover to someone else, then you may be locked into your business (and that holiday probably seems a long way away).
So, there you have it. You can persist with the status quo and continue to keep your old, introductory system running. You can try to use multiple systems that don’t talk to each other and plug the gaps with spreadsheets and manual workarounds, while managing all of the associated risks.
Or you can choose to take your business to the next level and consider an Enterprise Resource Planning (ERP) system that will provide effective and efficient functionality across a range a variety of business areas.
Article by Richard Heap
Project Manager at Acacia