As your company grows your needs change and your current basic financial system(s) may not meet the task. But how do you spot and fix this problem before it becomes a liability? Ask yourself the following five questions and you’ll have a good idea as to whether it’s time for a new system.
Question 1: How do you generate financial reports today?
If you answered: We already have effective accounting systems and processes in place to handle reporting, which consists of two people (sometimes more) exporting to an Excel file, reformulating it into a standard financial report and then formatting it for print.
The implication: You probably devote extra resources to accounting and finance and spend too much time and budget on it. In addition, the timeliness of financial reports is questionable since reporting more than once a month is not feasible. The net result is that the company cannot get a frequent, timely handle on the pulse of the business and react accordingly.
Question 2: How many locations and subsidiaries do you have and how do you consolidate their financials?
If you answered: Each company has its own QuickBooks file (or Peachtree or other basic financial package), or each separate subsidiary or location emails you an excel file at the end of the month that you manually consolidate.
The implication: Accounting packages that work well for small businesses with only one legal entity and few locations are not a good fit for companies with a more complex organizational structure. In addition, those same simple financial applications may have trouble dealing with multiple currencies and legislations. What you miss is a holistic view of your business and the information you need to make timely decisions.
Question 3: How do you get visibility into sales, finances, and other business functions to evaluate how well your company is performing right now?
If you answered: We rely on a combination of Excel files, printed reports, shadow systems, and meetings where we discuss and consolidate information.
The implication: Your CRM, accounting, finance, and other systems are operating on their own without proper integration. Your business is subject to the duplicate entries, limited visibility and missed opportunities that result from “Islands of Information”
Question 4: What business intelligence tools do you use today?
If you answered: Separate spreadsheets, e-mails, department data, and software like Crystal Reports.
The implication: Your staff is wasting time consolidating data that could be available immediately to them from one screen. In addition the resulting information may be plagued by errors caused by manual entry. As your company grows, it needs On Demand access to information about business performance directly from your system of choice, without having to fuss around with multiple printouts and systems.
Question 5: Is financial data difficult to audit or unreliable due to ineffective controls?
If you answered: We always fear the audit season but try to do our best in getting everything ready. It does take a couple weeks worth of time, though.
The implication: You may be at risk for audit issues related to incomplete records or discrepancies and get a negative audit result. Moreover, your staff is wasting time that could be better spent working on actual business needs. As the financial stakes grow with your company so does the difficulty and importance of transparency.
Now What?
These five sample questions are meant to make you think not just about how you operate today but the implications. Yes, you may have processes in place and things may work just fine, but you don’t need me to tell you that—if you don’t anticipate your needs as you grow—then you may have a painful awakening.
Fortunately there are business management solutions for small and medium sized corporations that are meant to address many of the pressing issues these companies face as they grow. Consolidated financial reporting, On Demand business intelligence, integration with CRM and other systems, are just part of what make business management software for small and mid-sized organizations so attractive.
Interested in learning more? Let’s schedule a one-hour free consultation where we’ll help you ask the hard questions and decide if you’ve outgrown your accounting software.
