Four signs your business needs better accounting software

Recognize when basic accounting software becomes a barrier to growth

News By John Case published 11 October 2024

Imagine running a race with shoes that are just a bit too small. At first, they feel comfortable, giving you the grip and support you need to forge ahead. But as the race goes on, the tightness starts to pinch, slowing you down and making every step more painful, restricting your ability to succeed. This restriction is the reality many small and mid-sized businesses (SMBs) face when they rely on basic accounting software like QuickBooks. What once felt like the perfect fit for a company just starting can quickly become a hindrance as the business grows, creating barriers to efficiency, decision-making and, ultimately, growth.

While QuickBooks and similar tools are popular choices for startups and young companies, it can be challenging to recognize the signs that these systems are no longer sufficient. As the complexities of running a business expand, the software that once seemed capable can start to show its limitations, including inefficient manual data entry, system bog down, lack of synchronization and an inability to scale to meet new demands or market shifts. How can SMBs recognize when it’s time to graduate to a more robust solution, and what steps should they take to ensure a seamless transition?

John Case

CEO of Acumatica.

Common Growth Challenges

SMBs are the lifeblood of our economy, representing 99.9% of all U.S. businesses. Many of these businesses face a range of challenges as they scale and grow. By understanding these four telltale signs, companies can better identify when they are outgrowing their current systems and need to consider alternative solutions that better empower them to break through growth ceilings.

The first significant sign and source of pain for expanding SMBs is difficulty generating detailed, real-time financial and operational reports. Traditional accounting software often can’t provide the insights needed for strategic decision-making. For instance, a growing company might struggle to create customized reports that provide insights into specific product lines, regional performance or customer profitability. This limitation can delay decision-making, cause missed opportunities and reduce overall competitive edge.

The second sign comes as SMBs expand and find that their existing software can’t effectively consolidate data across multiple entities. Financial data might need to be manually compiled from various sources or instances and administrators of QuickBooks, resulting in time-consuming processes, a higher risk of errors and inconsistent data across the organization. This lack of centralized data can make it challenging to get a clear picture of overall financial health or areas needing improvement.

The third sign comes from overall growth that spurs an increase in transaction volumes and complexity. Traditional accounting systems often lack the scalability to handle this increase efficiently. A business experiencing rapid growth might face transaction processing delays, data server capacity limitations, data entry bottlenecks and financial inaccuracies. These issues can impact cash flow management and jeopardize customer satisfaction.

The fourth sign is that the existing system is missing industry-specific tools needed to succeed in the company’s sector and keep pace with a competitive market. Businesses may find themselves cobbling together a patched solution to address industry challenges without full integration. This makeshift solution can result in disparate systems, mismatched data and the grueling task of manual data entry. For instance, a manufacturing company using a basic ERP that lacks specialized production scheduling or inventory management tools is forced to rely on disconnected software or manual processes to fill the gaps. This reliance hinders efficiency and competitiveness.

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