When considering the most essential software for your business, your initial focus is likely on the platforms that directly support the production or delivery of your products and services – and understandably so.
However, accounting software is often nearly as critical. This system records every financial transaction within your organization, so it must remain secure, current, and well-suited to your company’s size and operational requirements.
To ensure these factors remain aligned, it is important to approach accounting software upgrades thoughtfully. The following are some key practices to consider.
Plan upgrades strategically
Among the most important aspects of managing an upgrade is knowing when to do it. You do not want to unnecessarily disrupt operations and spend money, but you should not risk the downsides of outdated functionality by waiting too long.
There is no one-size-fits-all answer. Your financial statements are a potentially helpful source of information. A general rule of thumb says that, when annual revenues hit certain benchmarks — perhaps $1 million, $5 million, $10 million and so forth — a business may want to consider an upgrade seriously. However, the right tipping point depends on various factors.
Look for an industry-specific solution
Some companies rush into upgrades without considering all their options. Others resist change entirely, sticking with the same accounting software for years. Either way, you could miss out on something important: a product designed for your industry.
For instance, construction companies can choose from many applications with built-in features tailored to how contract-based businesses work. Manufacturers also have industry-specific accounting software. If you’re ready to upgrade, check out whether there’s now a solution on the market that was developed for your industry’s accounting practices and standards.
Mind all the details
When upgrading, be sure to mind all the details. For instance, do not overlook the importance of integration and mobile access.
Older accounting software may still function only as a standalone application, meaning data from across the company has to be manually entered into the system. This creates all sorts of risks. Optimally, you should be able to integrate your accounting software with other critical applications to share data seamlessly and securely, reducing errors and redundancy.
Also, if you have not already, add mobile access to your accounting system. Many solutions now include apps for smartphones or tablets.
Set your budget carefully
It is easy to overspend on an accounting system upgrade. Those bells and whistles can be enticing. Then again, many frugal-minded business owners underspend — settling for a cheaper, less robust upgrade that may leave their employees dealing with headaches.
The ideal approach generally lies somewhere in the middle. Perform a thorough review of your accounting needs, transaction volume and required reports. Also factor in the proficiency of everyone who’ll use the software and the availability of tech support. Then set a reasonable budget for an upgrade that checks all the right boxes.
Ask for help
Relying on outdated accounting software can impede efficiency and limit access to valuable features and insights.
If you are uncertain whether it is time to upgrade your accounting software, our team at Rudler is here to support you. We can evaluate your existing system and help determine the best course of action. If needed, we can partner with you and your leadership team to set a budget, choose the right solution and implement it properly. For more guidance, consult your Rudler PSC advisor at 859-331-1717.
RUDLER, PSC CPAs and Business Advisors
This week's Rudler Review is presented by Brandon Hughes, Staff Accountant and Evan Kandra, CPA.
If you would like to discuss your particular situation, contact Brandon or Evan at 859-331-1717.
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