Regardless of the size of your organization, software is a tool when it comes to running your business. It is not an answer. Software enables you to do more with what you have, IF (and it’s a big IF) you make the right selection.
Making the right selection when it comes to software isn’t as simple as picking up another “inexpensive” software package to continue doing the same type of activity. For instance, accounting software that is in the “shrink-wrapped” category – taking it off the shelf and install it – may have different ability to present data, but the essential task of deciding what data to collect and how to run your business with the data remains the same.
Most “entry” level accounting software can handle the simple transactional level (paying bills for instance) of your business. The analytical and performance aspects of operating your business and having visibility of the important business indicators requires an understanding of the business and adaptation of the accounting structure and reporting to meet your business’ management requirements.
If you continually look to new accounting software as the answer to changing the financial results of the business, then you are missing the mark. Accounting software is only as good as the structure you create within it to gather relevant data, group the data appropriately, AND compare it to budgets and forecasts.
It isn’t necessarily a requirement to have a complex and expensive software package to operate your business more effectively. What is necessary is to understand what you need the software to achieve. What numbers do you want and need to see? More importantly, it is necessary to have a connection between the data being collected and generated and HOW YOU ARE DOING BUSINESS.
The connection between the activities and metrics of your organization and the accounting information is what you want to use the software tool to generate. Different tools may make the process easier or make it appear in a “friendlier format”, but essentially perform the same function. Most entry level accounting packages (anything in $200 to $5000 range) can be set up to support a significant level of business activity. They aren’t meant for complex business demands such as product costing, government project and cost accounting, or complex business analysis applications. They can be made to approximate results and requirements with investment in the analysis of the business, design to match, and implementation.
Is your business struggling to understand what is working and what isn’t? Are you challenged to know what activities are paying off and what are costing you dollars? Then your accounting system isn’t the place to start “fixing” the issue. The place to begin is with an understanding of the activities and processes of your business and how they are generating the financial results. As an understanding of the business is gained, the refinement or replacement of an accounting system may be necessary.
You may achieve a degree of success by getting new accounting software. You may make a lucky selection that provides a “template” that more closely resembles your business’ operating structure. What you won’t get is the right operating structure for your business and the financial and managerial information to run it.
Copyright ©2005 Lea A. Strickland, F.O.C.U.S. Resource, Inc.