Growing companies in our green industry are eventually faced with a decision about when and how to make a break from the accounting software with which they started their business.
The decision can often come with anxiety and frequently the decision makers are not those who actually utilize the accounting software, further complicating the process.
So why does it even matter? Why not just keep trucking along using your little store bought package? It has gotten you this far, right?
Benefits of QuickBooks and other “out of the box” accounting software products
I don’t mean to pick on QuickBooks per se. In fact, I have worked with it in the past many times and consider it to be a good product. There are also several other pieces of accounting software out there that are similar and can also be very affordable and effective for a small business.
This smaller accounting software offers benefits including the following:
Limited features – This may seem like a negative but for a small business, it is actually a positive. Fewer features mean it is easier for staff to learn how to use the system. A smaller company usually does not have the financial capacity to hire high-octane accountants, and these packages are easy to understand and can be a little more foolproof.
Price – Small packages can be utilized for as little as a few hundred dollars while larger packages can run you $15,000-$100,000. This is why the decision needs to be made carefully.
When do you know that you are outgrowing your current software package?
If you have multiple users and are having difficulty keeping up with your IT infrastructure needs then you may be outgrowing your current software. This can mean that you have times when the software goes down or the software is running slowly and/or reports are taking forever to load or print.
You also may need to look at new software if the business is growing but your accounting staff is still small enough where it is not possible to set up proper accounting controls through separation of duties.
QuickBooks and some of the other small software packages do not have the same type of audit trails within the system. This means many transactions can be simply erased as if they never happened and it isn’t always possible to go in and see which individual changed which transaction.
You may be outgrowing your software if you find that you are doing more of your accounting and reconciliation work outside of the system rather than within it.
How do you find and implement your new software package?
Ask fellow companies which products they use and whether they would recommend them. Many times if you ask companies within your own industry you can zero in on a group of potential products quickly.
Have each of the software companies give you a demonstration of their product. You should demo five products at a minimum.
Every company has different ways of running their accounting processes. The product that is good for one company is not always going to be the best one for the next company.
Plan, plan, plan. This cannot be emphasized enough. The process of converting to a new software package is not easy so it is important to have a proper plan in place. You need to have an achievable timeline, set deadlines, and stick to them.
Ideally you would have someone on staff that can run point on the conversion to make sure things go smoothly. If you do not have that skill set, be prepared to budget for a consultant to help guide you through the data conversion process.
Consider whether you need to spend the money to convert all of your data or if you can just bring your G/L, A/P and A/R balances over. This can save a lot of money and is probably adequate unless you are involved in large contracts that span over one year.
Consider just converting your core accounting modules first, and then adding in all the “extras” once you are stabilized on the new system. The software salespeople will try to sell you everything under the sun.
Many of the modules are helpful, but if you are currently running QuickBooks or something like it, you can probably get away with this two-step approach. It will delay some of the cash outlay and make the conversion less stressful.
After all of that is said and done, I want to emphasize that there is nothing wrong with QuickBooks if it works for you. A new software conversion should be thought through very carefully and it is only worth it if your company size and needs make it necessary.
Call us at (678) 298-0550 or use our simple contact form.
