It’s tricky knowing the right time to upgrade your accounting system. Most businesses will not actually need one until they start to handle a significant volume of business, and it can be a challenge figuring out exactly when you should give up your current ad hoc system for a better one.
Unfortunately, way too many businesses make the shift to a new accounting system or full-fledged enterprise resource planning system (ERP system) too late, making such upgrades painful and complex. When it comes to system upgrades, the general rule is that it’s better to do it too early than it is to do it too late, because of the added complexity your larger database and transaction volumes will present.
Here are four signs that you might want to get a new system as soon as possible.
1.) You’re Spending Less And Less Time On Real Business
Upgrading your system can allow you to focus on your organization’s strengths while reducing the cost of paperwork and red tape. While some paperwork is necessary, there are certainly many parts of it that can be automated.
If more than a tenth of your time is spent doing paperwork rather than improving your brand, generating sales, and developing new products, chances are you’ll want to get a new enterprise resource planning system.
2.) Your System Can Only Handle Accounting
In the Philippine small business context, the benefits of “accounting systems” are misunderstood. Many less-informed business owners see no need to get a separate accounting system when they can get Microsoft Excel or Google Sheets for free.
However, a modern accounting system is really more accurately referred to as an enterprise resource planning system, as they typically do more than just help you maintain your books and your payroll. These systems can be used to automate different aspects of your business, including your store and warehouse inventories, order management, customer service, and virtually all routine business processes.
If you’re sticking with a system that merely crunches numbers, your organization can be missing out on the possibilities these systems are able to offer for your business.
3.) Your Team Needs Mobility
Businesses and nonprofit groups alike are allowing more work-from-home and telecommuting arrangements to reduce office maintenance costs while improving employee happiness and efficiency. Upgrading to a new system, particularly one with cloud capabilities, will allow your organization to make wider use of telecommuting, cutting down office maintenance expenses and reducing employee turnover.
Newer accounting and ERP systems will also make it easier to integrate teams in different offices, reducing effort duplication and allowing data and reports to be shared more easily.
4.) Your Business Has Outgrown Your Current System
While a simple paper or Excel-based system may suffice in the early stages, eventually the sheer volume of transactions your organization will have to handle will exceed its capacity to process them properly. Computerized accounting systems were initially developed to resolve this scale issue and it’s still an important reason to get a modernized ERP system.
As a matter of fact, it may be impossible to meet international standards for efficiency and competitiveness without the use of such systems. If you want to take your organization to the next level, some kind of ERP system is absolutely mandatory.
ERP systems will become absolutely necessary as your business starts to expand. Make sure to keep these signs in mind so you can upgrade at the best possible times.
