Anna-Marie McCrarren – Business Outsourcing Specialist
As a business grows, a restructuring of the businesses systems becomes unavoidable, due to the importance and future success of the business on having seamless access to the financial and management information. However, before making the move to new systems, business owners must prepare ensuring any changes they make provide the correct platform for future growth.
For a number of SMEs, there are some common indicators that a systems overhaul is due. Such as, financial information provided by the in-house accounts team becoming obsolete, or no longer reflecting the needs of the business. Extracting accurate, up-to-date data to inform management decisions may have become time consuming and frustrating for those involved.
Key things to avoid
While SMEs are unlikely to have the exact same needs and requirements, the key things to avoid when planning moving systems is a straightforward transfer of information, as this could lead to bad habits or outdated processes also being carried over. Whereas, this process should be viewed as a blank canvas and an opportunity to rethink reporting requirements and ensure financial data management is aligned with the strategic needs of the business.
Assessing the current situation
When assessing existing reporting and accounting systems, the business owner should consider whether the outputs from these systems could be improved. For example, if data is still being entered and stored manually, perhaps in different places or using different software, discrepancies are likely to emerge, which can be frustrating for the management team. Implementing user-friendly, cloud based solutions, such as QuickBooks or Xero, can deliver transformational improvements but it is important to prepare carefully.
The importance of reviewing KPIs
Before implementing new software, the business owner should review Key Performance Indicators (KPIs) while considering how any new financial management systems could deliver the most meaningful and relevant data possible. Most SMEs understand the importance of keeping a close eye on cash management, meaning having access to reliable, real-time information regarding the status of customer and supplier invoices can be very helpful. Implementing software to assist the business in maintaining a schedule of payments and streamline debt management procedures could add considerable value to the bottom line. We do advise you seek advice from a professional before making your choice of systems, as although most systems are designed with ease of use in mind, it is essential the business owners implement a system that offers them just the right mix of control and functionality.
Other reasons to have a systems overhaul.
An effective systems overhaul can increase stakeholder confidence. Banks and other lenders may find reassurance in the fact the business they are investing in is well managed, and that accounts and reporting systems are supplying decision makers with the right management data. Other investors may also value improved access to management and financial data that is well presented and easy to digest.
The flexibility of your accounting and reporting systems could be important as to adapt to the future needs of the business and must be considered. If the business is planning to invest in new plant or equipment, in a bid to increase production capacity or introduce a new product line for example, decision makers will need a clear understanding of the rate of return on investment. If this requirement is known from the outset, it can be built into the new solution.
Time for a reboot ?
Take time to review and make the right choice. For most business owners, knowing when a systems overhaul is needed is a relatively straightforward matter. They should avoid rushing in however, and make sure that any new solution is designed to meet their needs as owner managers and the needs of the business as it grows.
There are a lot of cloud based alternatives available, but designing the right package, complete with apps that provide added-value functionality, is not as easy as it seems. Taking time to review the wide range of software options available and assess the benefits they might bring to the business now and in the future, will ensure they have no regrets.