Accounting Software Solutions –
Keys to Success
of think about our businesses, we focus on what we sell – our products and/or
services. We often forget that our
organization must have a good underlying infrastructure to support it, or it
will fail. Putting that infrastructure
in place can be expensive both in terms of time spent and dollars expended. So when
we make the investment, we want to do it wisely to ensure its success.
Foundations of Business – the 3
your business as a three- legged
stool. If any one of the legs is not
supported properly, the stool falls
- The first leg is what you
sell – your product and/or service.
This is what we think of as the core of our business.
- The second leg is how you sell
it. This includes your sales
processes, marketing efforts, and merchandising. It’s how you deliver your products and
services. Without the proper
delivery mechanism, your
product and/or service won’t get to market.
- The third, and equally
important leg, is business management.
This encompasses how you run your business to comply with laws
(including tax laws), measure your performance, and communicate your
performance to others who need
to know, like your banker or investors.
The Business Management Leg – Your
Accounting Software System
of this article is on the third leg of the stool. Without this leg, your business is doomed to failure.
You run the risk of getting in trouble for failing to comply with
applicable laws. You also can’t know
where you’re going if you don’t know where you’ve been. And you must be able to communicate your
performance to ensure that others you need
to help with your business can see how you’re doing.
important component of the third leg is your accounting software system. This system really aids you in all three
areas of your business. It keeps track
of what you sell – using inventory tracking systems for products and time tracking,
job costing, and billing systems for services.
keeps track of how you sell it – by giving you analysis tools you can use to
make decisions. For example, seeing
sales by customer and sales by product line reports can give you much needed
insight into the success of your sales and marketing efforts.
obviously helps with the third leg, business management, by providing you with
financial statements and tracking mechanisms
to keep track of what you own and owe and how profitable you are. These measurement tools provide you with a
comprehensive financial picture of your company.
Top 10 Things You Need to Know When Selecting an Accounting System
As stated earlier, selecting, implementing and maintaining
an accounting system is a significant investment in terms of both time and
money. Additionally, having the wrong
system in place can have a significant negative impact on your business. System downtime is expensive – idle
employees, lost sales, unhappy customers.
And being unable to measure your performance can prevent you from making
good business decisions.
first question to ask is who stands behind the product? Whether it’s Microsoft, Best, or Intuit, or
another organization, make sure your solution is backed
by a company that knows what it is doing, is going to be around, and devotes
adequate resources to their research and development efforts. Also look for a company that provides you
with good resources such as informative websites. Don’t fall for cheap, unsupported solutions.
You’re making a big investment in your business, so you want to do it
right. Buying a cheap system may be
attractive because of the up-front cost but can end up costing you thousands of
dollars more on the back end when you experience problems or failures.
ask how easy the product is to use. Does
the software provide wizards or other visual/graphic tools to help you perform
set up and transactions? Most of the
major products on the market today are fairly user friendly.
can you get the reporting that you need? No accounting solution can anticipate your
every need or desire for
reports. We each measure our performance
in different ways, depending on our industry and our personal preferences for
how to slice and dice the data. You need an accounting system that has a database
structure that allows you to extract data easily to create custom reports to
meet YOUR needs. Before you buy any product, look at the
standard reports that are available out of the box and determine what
additional reports you must have and find out how you will get those reports.
if the product is integrated with
other tools you use. Look for a system
that easily integrates with other tools you use in your business already –
Word, Excel, etc. Having successful,
easy integrations can save you lots of time and eliminates potential errors
caused by duplicate keying of data.
ask if the system be customized and
how. If you need
customizations – from adding fields to changing
windows, are the tools available for you to do or get those customizations
done? For some customizations, you may
have to hire technical expertise (like a programmer), but if the accounting
software solution you select does not allow customizations, even by a
programmer, then you’ll be stuck with the functionality provided by the product.
if your data is protected. This is a key point for you to consider. Look for a system that provides full history
of transactions. Look for a system that
protects posted or committed transactions.
Some systems let you change
or delete transactions too easily – sometimes months after the fact. Also look for a system that allows you to
protect certain areas of your system – for example, if you have someone who
helps with paying bills, you may not want that person to get into the payroll
module. So if that’s important to you,
find a system that allows you to restrict access by user. Having a system that protects your data is
important for several reasons. First,
all users make mistakes, so you want a system that helps guard against those
mistakes. Second, if you have employees
working for you, even close family members, the opportunity for fraud
exists. Now I know you think Aunt Ethel
would never steal from you, but stranger things have happened in business.
And finally, others who look at your data (such as your auditor) need confidence that the information is correct and
if the solution will perform in the long run.
Does it provide you with reliable, multi-user access without slowing
performance? Look for a system that has
true record-locking, networking capabilities.
In this area, you should plan for growth. Some of the most common systems on the market
today work well for one user, but performance declines markedly when additional users are added.
key thing to determine is if the solution is scalable. Most of us have short and long term growth
goals for our businesses. So you need a solution that can grow as your business
grows. Is the underlying database
structure solid enough to support the growth?
Can you add features or additional modules as needed? What
happens when you outgrow the current version of your solution? Is there another version or even another
product that you can move to as you grow?
you buy a solution, know where you will go for help. Whatever system you select, the output will
only be as good as the setup and input you give it. If you don’t understand the system, it won’t
work for you. Where do you go with
questions? Who will be your support for
the system? Will you be calling an 800
number? Will you have someone local? Is
there an online knowledge base of
commonly asked questions?
the most important thing to determine is if the solution is suitable for YOUR
business! If you’re selling widgets, you
need a strong inventory control
system. If you’re selling services,
you need a strong time and billing
system. List the key features you need – different price lists for different customers,
multiple shipping addresses for customers, serial numbered
inventory, etc. – and make sure that any solution you select meets those
requirements. Determine if the system is
flexible enough to accommodate your needs
– for example, does it provide multi-segment chart of accounts to allow you to
track departments or locations? Before
you consider buying a solution, spend time either on your own or with a
consultant examining your business processes, identifying strengths and
weaknesses in those processes, and designing a system that meets your needs both now and in the future. Be wary of a consultant who offers you a
software solution without truly understanding your business and its
Keys to Success – So you bought it
- What’s next?
system you select, follow these keys to success. No system will meet your needs if you don’t implement and maintain it properly.
committed to making the upfront investment in software and hardware. Trying to make a basic version perform like a
premium version will not work. Running
any solution on inadequate hardware will result in poor performance and tremendous
frustration. Measure the cost of setting
up an adequate system on the front end against the potential for total business
failure on the back end.
ownership of your solution ASAP. This is
YOUR accounting solution, not your CPA’s, not your software support
person’s. YOU need to understand how it
your accounting and sales records. It’s
important to really understand the numbers – where they come from and what
impacts them. This understanding will be
key to determining what factors control the success or failure of your
your financial trends. Is your accounts
receivable going up or down? Why? What is your cost of goods sold as a
percentage of sales? What’s the trend
for it? These trends, especially when
compared with standards for your
industry, can serve as barometers of the health of your business.
your records current. Measuring your
performance can only be done with up to date records. Too many small businesses work out of the
shoebox during the year and don’t really know what has occurred in their
businesses until it’s too late to do anything about it. You need current numbers to make current and
an excellent disaster recovery plan in place.
Perform daily backups of your data.
Store backups off-site. Work with
your technology partner to ensure that downtime will be minimized in the event
of a catastrophic failure.
hesitate to ask for help when needed.
You’re very good at your core business – whatever products and services
you sell. Focus on that and get help
with areas where you may not be as strong.
Ask your software provider to help you with your system and custom
reporting needs. Ask your CPA for help
tracking and understanding your numbers.
YOUR Accounting System
summary, we’ve talked about several
things to consider for running your business.
Buying and implementing accounting software is a big investment, and
it’s key to the success of your business, so you want to do it right. Be sure to ask key questions before
committing to a solution. And follow the
keys to success once you’ve committed.
right system for YOUR business – now and for the future.
information, contact Robyn Evans or Sherry Whitten at iDrive LLC.
Stone Wood Cove West
Cordova, TN 38018