Introductory software systems, such as QuickBooks, are great tools for small and start-up businesses. They require minimal training and set-up, are intuitive and easy to use and come with a relatively low price tag. However, as your business grows and order volume increases, there may come a time where more robust accounting ERP software is required. ERP systems provide functionality across a variety of departments and are designed to handle large amounts of data, increase automation and reduce the need for duplicate entry. As a result, the implementation process is much more complex and requires significant planning, the benefit being a system that will continue to grow with your company for years to come. ERP software is a good solution for businesses who have outgrown their existing systems, but what happens when a company outgrows its staff?
Implementing an appropriate mid-market accounting ERP solution can reduce or delay the need to hire additional employees by providing opportunities for automation. There is less need for manual entry as the system integrates data across all departments including inventory, accounting, contact management, and order entry and processing. However, there are two instances where employees with a more advanced skill set may be needed; (1) when IT management is required, (2) when no one at the company has advanced knowledge of accounting practices.
- When IT management is required.
Making the decision to upgrade to a more robust ERP solution involves deciding whether to implement the software in-house (on-premises) or as a hosted (cloud) solution. One of the benefits of choosing a cloud-based software solution is that IT management gets pushed to the software vendor. This includes IT maintenance, hardware and server management, installation of patches and upgrades, and data back-ups. If you choose instead to implement the software as an on-premises solution, then the above tasks become the responsibility of an internal employee or must be outsourced to another IT provider. Although there are several other factors that make the case for choosing one implementation method over another, this one is important as it will have an impact on on-going costs and software performance. For those companies with experienced IT personnel already on staff, this is of course less of an issue.
- When no one at the company has advanced knowledge of accounting practices.
One of the benefits of moving to a fully integrated ERP system is the advanced accounting features that are included. This includes the ability to generate reports within the system which can then be automatically updated on a regular basis, the functionality for dealing with multiple currencies and multiple companies and better audit controls. It is this last point that makes it important to have at least some “true” accounting personnel available to help manage the accounting portion of the software. Proper ERP systems require the use of standard accounting principles and procedures, and will not allow users to manually delete transactions. Traditionally in QuickBooks the opposite is true, and companies are able to get away with non-accounting users with little understanding of accounting practices. This can often be beneficial in the beginning and is sometimes a factor that even influences the choice to go with QuickBooks. However, in order for your company to grow, it will become increasingly important for your books to be managed by an employee with a thorough understanding of accounting. This ensures your company is adhering to proper accounting standards and regulations, and means users can record information and make adjustments in real-time. Perhaps as important, it will allow the business owners and managers to obtain useful, meaningful and timely management financial reports. Keep in mind that this does not necessarily mean that you need to replace existing staff, but instead could mean involving the help of a part-time outside accountant.
For more information on upgrading to a full ERP system, download our Software Buying Guide: