Your business has outgrown your entry-level accounting software. It’s probably a good problem to have, but what do you do now?
In the past, there has only really been one option: keep struggling with the old startup software until you can afford an expensive enterprise resource planning (ERP) system like NetSuite, Intacct or Dynamics.
But that could be a recipe for pain and frustration – and there is an alternative to waiting until your system is under much more strain than it already is.
The problems of outgrowing entry-level accounting software
Entry-level accounting software such as Xero and QuickBooks is popular for a reason. These platforms do a good job of serving small businesses. Many of their clients will always operate as small businesses, so they may never need to upgrade.
But for a business that grows substantially, there comes a time when that entry-level software is not up to the job.
This is likely to bring a host of problems:
- You are processing more transactions than the software is designed to handle;
- Tasks like reporting for multiple entities in a group, handling different currencies or calculating deferred revenue require you to export data from the finance system and work in spreadsheets;
- As a result, you spend a lot of time working in Excel or another spreadsheet tool – quite possibly more time than you spend in the accounts system itself;
- Ever more staff time is committed to data entry and other basic finance tasks, leaving less time for higher-value work such as more sophisticated reporting;
- The number of points where human error can creep in multiplies;
- Audit is a stressful experience, with the finance team running around in pursuit of information and physical documents – and the likelihood of mistakes being unearthed.
Why enterprise software might not be the right solution for your growing business
Traditionally, organisations put up with their entry-level accounting software until they felt able to commit to an expensive replacement that was aimed at big businesses – NetSuite being the traditional front-runner.
The impulse to put off changing software is understandable. While they boast powerful automation and reporting features, NetSuite and the other big-name ERP systems are expensive. They also require the new customer to commit a lot of time to the implementation process, which can disrupt the business for a period of months.
What’s more, the complexity of those systems can be too much for a medium-sized organisation where people are used to their software being simple to use. Those systems can be a sledgehammer to crack a nut.
However, the longer you delay doing something, the longer you are stuck with all the downsides of entry level systems, including that ever-multiplying commitment of staff time – and the constantly increasing risks arising from human error.
Perhaps even more important is the question of the quality of information you are missing with basic accounting software.
Expanding businesses need timely, accurate financial data to drive strategy and good decisions. This is especially true in rapidly changing sectors such as tech, where leaders need quite a sophisticated dashboard of information in order to keep a constant eye on costs and revenues.
Until you find something to replace entry-level software, decision makers are going to be working with data that is out of date – perhaps by weeks – by the time it is in their hands.
Fortunately, it’s no longer an “either/or” choice between the entry-level packages and the unwieldy, high-priced kind. So, rather than sticking to the position that “one day, we’ll be able to get something like NetSuite”, it’s worth researching alternatives now that could be cheaper, less disruptive and affordable straight away.
iplicit was created to put powerful cloud accounting software into the hands of medium-sized organisations, via a simple and intuitive interface and is one of a few fantastic NetSuite alternatives for small and growing businesses.
Download iplicit’s toolkit for growing businesses here