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Is it time for your business to upgrade its software system?
by Mike Fitzgerald
If your company has experienced growth over the past few years, you
may have outgrown that QuickBooks or Peachtree system you have been
using. Both packages are an excellent solution for companies during
their early stages, but recognizing when it is time to upgrade your
accounting and business management systems is important. The same is
definitely true for those who advise businesses on their growth, such
as CPAs or business consultants.
As a company grows, it typically will put additional resources into
the revenue producing components of the business such as product
development, sales, marketing, customer support and senior management,
but accounting and systems will lag behind. Most business owners will
tell you that this is not a conscious action, but strained resources
must be focused on those areas that will help drive the company’s
growth. Accounting support and systems are considered overhead and
consequently fall to the bottom of the list.
While this is understandable, there comes a point when these
inadequate systems, will begin to have a negative impact on the
company’s growth. It is important to recognize the signs that your
company has outgrown business management software
When a company has outgrown it’s current business system, it is
typically because the system is having trouble handling the volume of
transactions and it is unable to provide the information and reporting
the company needs to sustain it’s growth. And most of the time this
shows itself not in the traditional accounting applications such as
general ledger, accounts payable and accounts receivable, but rather
in the front-end of the business, in areas such as order processing,
customer relationship management, inventory control, purchasing, sales
reporting, e-commerce and web integration.
Signs that
your company has outgrown an existing system:
1. You are running on an old operating system
This is the easiest one to recognize. If you are still running on a
DOS package or an old version of Windows, you are living on borrowed
time. Very likely the package is no longer being supported, or if it
is, it will only be a matter of time before this support disappears.
In addition, you will not have the opportunity to use some of the
newer technologies such as Customer Relationship Managers, E-Commerce,
Web Integration and Remote Access.
2. Your staff is “bumping into each other” regularly
These entry-level packages, such as QuickBooks or Peachtree, were not
originally designed to be multi-user, and although they have added
some multi-user functionality into the software it is very limited and
restrictive. If you can only have one person at a time in each
application, or if you are constantly being required to back out of
the system, to let someone else get in, there will be a lot of wasted
time.
3. Multiple, non-integrated systems
If your information comes from many different sources, this is a sign
that there is likely a great deal of redundant effort being expended
to update these different systems. Mid-range systems today can fully
integrate virtually all of the accounting, business management,
customer service and management reporting needs required by virtually
any company. And industry standard, open-database systems allow you
to integrate front-end industry specific packages to eliminate the
manual integration to your accounting system.
4. Information is late or incomplete
If you cannot get information on a timely basis, or when you do
receive it, it is incomplete, you need to evaluate your system. If
appropriate systems are in-place, reporting and analysis should be an
automatic by-product of normal operations. Companies with proper
systems and proper staffing should be able to close out a month and
prepare all necessary reporting within a week of month-end. In fact,
with some of the better mid-range systems, management should expect
their systems to alert them to exceptions (positive or negative) as
soon as they happen. With today’s technologies, there should not be
waiting until the end of the month to find out how they are doing, as
often that is too late.
5. Poor customer service
This may be the hardest to recognize and can take many forms, but
potentially can have the biggest impact on the long-term success of
the company. This is also the single most common reason that
companies upgrade from the QuickBooks/Peachtree level of software.
Some of the things to be looking for include: customers complaining
about late, missing or incomplete orders; an increase in customer
returns and exchanges; an increase in freight costs relative to sales;
and losing customers because they are getting better product and
service from your competitors.
6. Profit margins are down
Inadequate systems may often lead to a less profitable, inadequate
inventory system leading to inappropriate inventory levels (too high
or too low).
A new system offers real solutions that reach into every area of a
businesses operation. Upgrading your business system can be just the
boost a company needs to grow and enjoy a successful future. The next
step is to choose the system that is the right fit for your company’s
needs.
(Editor's note: Michael Fitzgerald is President of The Fitzgerald
Group, a leading New England’s largest reseller and provider of,
training and support organization for two leading accounting software
packages, MAS 90® and MAS 200®. The Fitzgerald Group offers more than 50
years’ experience in implementation and training. Clients include
businesses in the accounting industry, as well as manufacturers,
distributors, sales processors, restaurants, specialty promotional
products, and the hospitality industry. The firm maintains its
corporate headquarters at 2 Commercial Street in Sharon,
Massachusetts, and also
maintains an office in Southern New Hampshire. For additional information on
products or services, please call 781-232-1212 or visit the company’s
website, www.thefitzgroup.com)
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