Outdated accounting systems have proven to have negative upshots towards organisations’ efficiency, growth, and profitability. They are like a volcano sitting in the middle of the business and when it erupts, the company may end up with mountains of paperwork and flows of frustration.
In this article, we look at four ways business can be impacted when a company decides to stick with an outdated accounting system and how to avoid them:
1) Inefficient operations
When you are using outdated accounting software, it slows down the entire operation of the business, and not just in a mild manner. The lag is so severe that sometimes the flow of information backfires on you and it can actually mislead your decisions, like cutting staff costs to keep up with revenues or overstocking inventory.
It’s like putting a brake on progress and it will only be a matter of time before stagnation sets in.
Inefficient operations equal slow progress. Slow progress means missed project deadlines, poor service delivery, and a general lack of productivity. By extension, these issues only result in unhappy customers and loss of revenue.
2) Lack of transparency (and this means no accountability)
The consequences are particularly dire when you don’t have any record-keeping practices in place.
You will have no idea what has been going on and this makes it harder to make decisions, especially when things are looking bad.
Without information, you won’t know where the problems are coming from until it’s too late and a crisis almost happens or is already happening.
3) Poor and slow business decisions
Typically, modern financial accounting systems such as Infor SunSystems are known to have built-in business intelligence, analytics, and reporting functionalities that allow business users to access the data they need in real-time.
When you’re running old systems, your management is mostly going to be based on spreadsheets and information that’s not very much up-to-date. In this case, when a manager makes decisions or plans for the future he/she is going to act on wrong or outdated information.
4) Overall, you lose profits and the competitive edge
And that’s simply because your competitors are already using updated financial accounting systems. If you don’t upgrade, then they’ll move ahead of you in terms of throughput times and efficiency. Which is a really big deal when companies are fighting for their market share.
This is a no-brainer, really. If you don’t have the most efficient system in place, then you are at a disadvantage and that’s no way to stay competitive in today’s business world.
How to Avoid the Situation
The solution is rather simple and straightforward: don’t get stuck with outdated accounting systems.
Modern financial management systems of this class are built to optimise accounting efficiency. They facilitate more accurate financial reporting, quicker financial close, and seamless integrations overall.
In short, modern accounting software can:
- Improve operational efficiency and speed up the flow of information from other departments to finance and back.
- Allow you to manage projects more effectively and stay on top of deadlines.
- See all your data in one secure place with real-time access, allowing for faster and more accurate decision-making.
- Cut costs and save the finance team an ample amount of time.
- Automate and centralise your accounting and finance operations – which are considered the backbone of a successful business. This eliminates redundant or manual tasks and lets the software do the hard work.
- Uncover opportunities, the root causes of issues, and other hidden risks that may be in your financial operations.
- Reduce chances of fraud and financial losses.
- Help you streamline accounting processes, improve accuracy, and boost efficiency – thus giving your financially-driven business a competitive edge.
- For organisations that want to expand their business globally, financial accounting software such as NetSuite ERP and SunSystems allows for seamless international integration.
Of course, there are a lot more benefits you can reap by using modern and updated financial accounting systems.
But how do you know where to start? What should you look into when it comes to selecting a new financial system for your business? After all, we’re talking about a big action that can totally transform your financial operations.
In short, the answer is right here. Get in touch with one of our specialists and we’ll be more than happy to guide you through the entire process.
We’re dedicated to helping companies make better business decisions through the use of financial accounting software.