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4 Signs You Should Switch Accounting Software to ERP

Lukman • 21-01-2022 • 1438 Viewer • SAP Business One

4 Signs It's Time to Consider Converting Your Accounting Software to ERP Software



When you first set up a small to medium-sized enterprise (SME), you probably acquired basic accounting software such as QuickBooks or Xero to manage your business's financial processes.

Accounting software like this may have been suitable for your SME in the early days, when budgets were a concern and your business wasn't operating at a scale beyond the capacity of your business to handle.

However, you may have noticed some symptoms of inefficiency in your business processes as your SME operations continue to grow.

These symptoms indicate that your business has outgrown its accounting software, and it's time to consider switching to ERP software.

Let's take a look at some of the most common symptoms, and why changing from your accounting software to ERP software is the solution to them.


1. Inefficient Manual Processes affect your financial management


Making more sales and generating more profits is always a cause for celebration for your SME.
However, you may have noticed that as your business grows, you have to spend more time and labor on the manual data entry required to keep the financial records in your accounting software up to date.

You may have tried to solve this problem by expanding the accounting function within your business to manage the growing workload, but this is an expensive and time-consuming way to try and solve the problem.

In addition, having more people working on your business finances leads to more potential errors in your books due to incorrect user input. This can make your month-end close more difficult than it needs to be.

The reason for this is that while accounting software provides basic financial management functions, they usually don't come with other finance-related features such as invoicing.

This means your business may be using separate solutions to provide capabilities that your accounting software does not have, and because they are not integrated with each other, your systems cannot automatically share business data between each other.

Therefore, your staff end up having to do manual data entry to transfer information from one system to another, slowing down your SME's monthly closing process.

With ERP software, you can bring all your business financial processes together, and create a single source of truth that automatically reconciles your data across all your systems that are integrated with it.

This helps you perform month-end closings much more quickly and accurately, with a much lower risk of human error.

 

2. Difficulty in Generating Reports for Business Insights


Another key factor that determines the long-term success of your SME is the visibility you have into your current financial processes.
Your basic accounting software is usually enough to give you visibility when your business is newly established, when your sales volume is still low and all your business operations are based in one location.

However, if your business grows in any way - such as setting up branch offices, connecting multiple types and numbers of mobile devices to allow your workforce to work remotely, or simply achieving a higher volume of sales per month - it will also generate more real-time financial data than ever before.

Your accounting software will be useless in helping you make sense of all that data, as it can only generate reports that tell you the current financial state of your business, but not what factors contributed to it.

To get those insights, your accounting function has to manually cross-reference reports from your accounting software with data from other parts of your business; again, a time-consuming and less accurate process.

To overcome this hurdle, you need ERP software that comes with business intelligence (BI) dashboards, such as Microsoft Dynamics 365 Business Central.

With these BI dashboards, you'll get real-time reporting and analytics that will generate the insights you need to make informed decisions that make your business more successful than ever.

 

3. Lack of Real-time Data for Forecasting and Budgeting


If your SME is using basic accounting software, the software can't provide all the data you need to get a complete picture of your business, as it is limited to the financial data of your business.
And to get the full picture you need to create accurate forecasts and budgets to match, you need to consolidate data from every part of your business, such as your sales and inventory, in real-time.

This is especially important in the modern business environment, where your business's ability to respond to developments in real time is key to success.

You can achieve this by changing your accounting software for ERP software, as the latter has the ability to consolidate multiple data sources to present a single source of truth.

This means bringing together all your data points from across your business into a single source of accurate and up-to-date data in real-time, ensuring that you will always have the right data to make accurate forecasts and budgets for them accordingly.

 

4. Reliance on Spreadsheets for Inventory Management


Financial management is one of the more important processes for your SME, but it is not the only process that needs to be managed well.
Inventory management is another area that many businesses like yours have to deal with, to avoid understocking or overstocking of products, and that the desired goods can be found in your warehouse to meet customer demand.

And accounting software doesn't have any functionality for inventory management, which means SMEs like yours often use spreadsheets to manage your inventory.

You've probably experienced some of the same manual data entry pitfalls when it comes to managing inventory. These include a lack of access to real-time inventory data - both for internal needs and to provide that information to your customers on demand - as well as a scattered view of the inventory in your warehouse.

ERP software such as SAP Business One does come with a robust inventory management module. Therefore, trading in your basic accounting software for ERP software gives you a single platform from which you can manage your business finances and inventory.

It also allows you to manage processes where finance and inventory management intersect - such as managing accounts payable and receivable (AP/AR) from fulfilling customer orders from your inventory - and predicting demand for your products so that you can maintain optimal stock levels for your products.

 

Time to Change Your Accounting Software for ERP Software


When your SME has grown to the point where it is experiencing inefficiencies in some business processes, it is a sign that the accounting software you are using is no longer up to the task of managing your business.

That's because accounting software only offers financial management capabilities, and lacks features and functions to help you manage other parts of your business.

And even if you have other software solutions to help you manage other aspects such as your sales and inventory, these systems are not integrated and thus do not share business data between each other.

This makes it difficult to get a complete picture of your business, and thus to generate insights that can help you make the right business decisions for success.

If you are experiencing these difficulties in managing your SME, this means it's time to change your accounting software in favor of ERP software, which will bring together data from across your business and give you the single source of truth you need.

If you want to know what the first steps are when replacing your accounting software with an ERP solution, click on the link below to find our guide to doing so.

Mini ERP :
https://pipesys.id/

SAP Business One :
https://www.sistemanugrahprima.com/sap-business-one

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