So much of your business depends on accounting, from tracking project costs to staying compliant with federal regulations and making informed decisions about future investments, the right software can easily make or break your business. At regular intervals it’s important to consider the question; do I need a better accounting system?
2020 is quickly approaching, and it’s not too early to start thinking about a New Year’s resolution. If your organization’s accounting system needs an upgrade, this is a great time to consider buying one. In this article, we’ll help you to determine whether it’s necessary and compare different options.
The Limitations of Spreadsheets
The most popular accounting software for small businesses is easily QuickBooks by Intuit. As an entry-level system, QuickBooks is often used in conjunction with Excel for analysis and reporting.
While QuickBooks is a great place to start, it’s difficult to stay there. When businesses grow or their accounting requirements become more complex, limitations of the software make themselves all too apparent. Here are just a few:
- Non-scalable – as your business and contracts mix become more complex, QuickBooks is unable to provide the functionality needed to calculate revenue or automate the invoice presentation mandated by the DCAA. The result to these limitations is off–line invoicing or a need to supplement these functions with Excel spreadsheets.
- Labor intensive – out-of-the-box, QuickBooks offers only a few automation features, requiring extensive configuration to integrate with other products, that can lead to an unmanageable workload.
- Error-prone – with so many touchpoints from third party use for data entry, manual duplication and user errors tend to accumulate, resulting in skewed projections that leave your business at risk.
- Limited insights – QuickBooks provides few tools for data analysis or insights that drive business, marketing and sales strategy.
- No ad-hoc reporting – QuickBooks does not provide users granular, role–based access to specific projects’ data and cannot generate meaningful reports.
- Partial integration – QuickBooks has come a long way in providing integration with other business systems like timesheets, indirect rate calculations and banking, but still does not provide a single-point-of-access to these functions.
Over time, these disadvantages will be reflected in an organization’s bottom line; software that offers a low total cost of ownership (TCO) in the beginning will become more expensive as lack of functionality raises overall workload, reduces return on investment (ROI) and ultimately produces less usable insights.
The Power of True ERP
Businesses who want to move on from QuickBooks often switch to enterprise resource planning (ERP) software like Deltek Costpoint, Jamis Prime, or Unanet. While these alternatives perform all the basic functions of QuickBooks, they also offer much more, and comparing them is almost like comparing a calculator with a smartphone.
General features offered by all major ERPs include:
- Full integration – ERPs provide one central location for accessing different business functions including payroll, timecards, expenses, projects, client billing and much more. Switching between different streams of data becomes a breeze, cutting down on labor and preventing the existence of conflicting records.
- Scalability – ERPs are built to work for an arbitrary number of employees, offering industry-specific modules and special functionality that can be enabled or disabled at an organization’s discretion, according to its needs.
- Easier compliance – ERPs are built to support government requirements like those mandated by the DCAA for time tracking, projects, expenses and labor distribution. This reduces the time spent on compliance procedures and ensures audit-readiness.
- Insights – ERPs provide advanced analytics and ad-hoc report generation tools, allowing executive users to compare past efficiencies with future projections and discover areas where costs can be cut.
- Automation – ERPs offer applications to automate routine tasks and business processes such as approval, performance tracking and assignments across different departments. This results in significant time-savings and improved integration across an organization.
It’s fair to say in summary that ERPs constitute a significant upgrade from QuickBooks or any other entry-level accounting system. But which one is the best?
As a vendor agnostic company, we believe that all ERPs have strengths and weaknesses and businesses should compare features and pricing to make an informed decision based on their own needs.
Should You Upgrade?
From a business perspective, the point of upgrading your accounting system is to reduce TCO and raise ROI. More often than not, we find that QuickBooks becomes the least cost-effective solution for businesses as they grow. A professional assessment by experts in accounting systems is the best way to find out for sure; don’t leave your bottom line to guesswork or gut feelings.
At WiJiT, we combine years of experience in accounting and accounting systems with a genuine desire for our clients’ success to find the perfect solution for your organization. If you are considering an upgrade to your accounting system, send us a message or give us a call – we look forward to hearing from you!