Is Your Accounting Ready for the Cloud?

Businesses of all sizes are turning to cloud-based solutions to assist in their accounting and finance functions. However, businesses may end up facing roadblocks down the line due to limitations in software. On the surface, these software platforms may appear efficient, but with problems ranging from inflexible processes to data accessibility and inadequate security, these platforms may end up costing more time and money than they seem.

Chances are, when you were just starting out, you could easily handle your company’s finances with small business software such as QuickBooks and a small number of spreadsheets. That’s not surprising. Many small businesses rely on these basic solutions to manage elementary accounting. But as your business complexities increase, those basic tools can hold you back. These programs simply aren’t designed to provide professional financial management. Most companies can’t afford to remain trapped by time-wasting extra steps, manual data entry, cobbled together processes, and other hurdles that create a silent drag on your organization.

But when is it the right time to make a move? Which options should you consider? What are the hidden costs of waiting? If you’re trapped by workarounds, extra steps, manual data entry and patched-together analyses, you’re already spending more than you realize.

Here are the main bottlenecks that users identify when using certain small business software programs:

Over-reliance on spreadsheets to support financial processes and reporting

Many organizations naturally and gradually develop sophisticated accounting requirements, such as revenue recognition and multi-entity consolidation. If your accounting program is the financial foundation, that often means cumbersome workarounds because it doesn’t provide the built-in capabilities for these complex processes. These workarounds lead to entry errors, incorrect or outdated data, process inefficiencies, wasted time and resources, and a lack of control and compliance.

Excess manual data entry and re-entry

Most companies don’t integrate their accounting programs with other key business applications, opting instead to manually integrate the systems. That might suffice when volumes are small. But ask anyone who’s endured these workarounds and you’ll see it’s a real productivity killer as the business grows. Instead of automating your business, these manual integrations are invitations to errors and wasted time.

Limited access to reports and information to drive decision making

Real-time visibility into business metrics is essential for timely decisions that boost performance. These accounting programs often offer canned reports — and no dashboards — so your visibility is limited. By leveraging a financial system that incorporates both a multidimensional general ledger and report writer, you can transform your analyses and become a strategic partner who generates insights that answer the bigger questions facing management.

Difficulty in adapting to new business requirements

Maybe you’ve seen a couple of the classic signs that you’ve outgrown these small business software programs. Those menus and screens that used to be so quick and responsive now have lengthy delays as the system struggles to keep up with data volume and calculation intensity. Report printing takes forever, and queries seem to dim the lights. This critical limitation is risky at best. It can force you to periodically shut down the program just to maintain data files. In a worst-case scenario, you’re looking at potentially disastrous results: system crashes and the loss of crucial data. That’s no way to run a business.

Inadequate controls around financial processes

Manual processes are a fact of life with these programs. Unfortunately, they increase the probability of data duplication and data entry errors, making it difficult to gain an integrated, real-time financial view of a company’s end-to-end operations.

Moving toward a new wave of financial management technology, there are other ways to manage finances and accounting. Cloud-based financial management applications offer organizations the solutions they need to work strategically with stakeholders by providing the financial data to plan the business’s future, gain new insights, and make important financial decisions. There are many ways businesses can utilize a more advanced platform, such as cloud-based accounting, as an alternative to traditional financial software solutions.

Benefits of adopting cloud-based accounting

Anytime, anywhere business visibility: The advantage to cloud-based accounting is access to data in real time. Businesses and employees can securely access data anytime, anyplace. There’s also more flexibility when it comes to reviewing and reporting data. Cloud-based accounting offers a built-in multidimensional architecture, while cloud-based finance delivers accurate and timely reports with relevant insights into data. Going one step deeper, businesses can create role-based dashboards, allowing for real-time global and local visibility into the state of your business that serves up to the right stakeholders at the right time.

Increased productivity: Cloud-based accounting offers a simpler way to conduct work in a simple fashion with automated accounting. Comprehensive automation simplifies core accounting processes such as accounts receivable and payable. Along with automation, businesses can integrate and tie into leading applications to assemble an interoperable system of best-in-class applications easily and cost-effectively. To further increase overall efficiency, users can create defined workflows to automate, control and streamline processes to optimize throughout an entire organization.

Scalability: Another key advantage to cloud-based accounting is its ability to scale and grow with your business. As a business grows, you can increase the transaction volume and easily add new entities as needed to offer internal controls and ensure compliance. With growth comes the need for multiple ledgers. The cloud delivers scalability and control for high-volume, high-transaction businesses.

Cloud-based financial management applications offer finance organizations the solutions they need to work strategically with stakeholders by providing the financial data to plan the business’s future, gain new insights, and make important financial decisions. They’re gaining better visibility, increasing flexibility, improving business and financial processes, and achieving a meaningful and measurable ROI.

(Source: AccountingToday – Accounting Technology – Voices - October 15, 2021)