The accounting function in any business is undeniably one of the most important in ensuring growth, and ultimately success. Many small businesses start off using traditional and archaic accounting practices as a cost saving when starting their business, only to find later that this is an immense barrier to scaling their business when the time comes.
The key to avoiding this pitfall of new business is to choose an affordable accounting package at the outset as one of the essential elements to your business start-up plan. Small and affordable is key, but not so small that the software cannot grow with you and your business as it grows. If you have already started a business and are experiencing any of the below issues, it is perhaps time to look at getting some accounting software into your business to take it to the next level:
- Your current traditional accounting system cannot keep up with your business
Many small businesses start their business with a spreadsheet as their way of tracking finances. If you have started your small business in this manner and it worked well at the start but keeping and maintaining this system is starting to work against you in terms of growing your business, it might be time to move on.
- You still often find yourself doing manual calculations and analysis, even outside of the system
If you currently don’t have an accounting system or software package in place, you are undoubtedly doing many accounting tasks yourself. Even if you have some sort of accounting package but still find yourself having to do some of the required accounting functions outside of the system that you have, it is time to look at formalizing your accounting function. The accounting industry offers various accounting software applications – from the most basic to the most comprehensive. The best one for your business depends on your specific needs and specifications. However, if you find yourself doing more things outside of your accounting system such as manual calculations, data manipulations, analysis, and report generation, then it is time to look for something else that can accommodate your requirements.
- You find an increased need to have tighter system security, financial control, and audit trail.
Another element that can become an issue if you don’t have an accounting system in place is security. If you started your business by yourself or with just one or two people to help you out, an accounting system that has not-so-tight security might have sufficed. However, the growth of your business probably comes with more hands to help out – the same hands that can wreak havoc on an unsecured accounting system. Simple changes and deletions can have huge effects on your figures, so you wouldn’t want anyone to be able to do this, at least not without any audit trail.
- You can’t keep track where your money is going.
An accounting system is supposed to make it easier for you to track the finances of your business or simply put, where the money is. If you find yourself confused or overwhelmed with all the figures, making you wonder where exactly you are spending the money and how much the business is earning, then your accounting system is probably as overwhelmed as you. It is time to change your accounting system to one that will handle your data seamlessly while making everything easier for you to track.
- You are turning down business opportunities because of your system’s limitations.
Many small to medium businesses can find themselves having to say no to potential for growth such as a potentially profitable partnership with another company, increased demand from customers, or new products and services, because of the limitations of their accounting system. If this is the case in your business, then it is time to look for a new accounting solution. A system should be able to adapt to your business and any changes it goes through, not the other way around.
The lack of a good accounting system can certainly hold a business back. No matter what kind of accounting system you currently have, it is always a good idea to assess whether it is still the right one for your business. If you feel that it is time for your business to move forward with something else, make sure to carefully consider the right one that will meet your business needs and requirements – one that can take your business into the future.