Accounting systems are not something you change or replace very often. However, as your company grows in size or complexity, you will reach a point where manual processes are draining your productivity and you are struggling to analyze the growing range of your financial and operational data. You’ll need a better way to handle your company’s accounting, so you’ll need to modernize your system.
An updated accounting system can offer new functionality to successfully run your accounting department and provide your company with the proper accounting and financial support. Newer accounting systems have features and capabilities that simply were not available a few years ago. Here are a few that are commonly found in leading middle market solutions:
- Tightly Integrated Processes – Most leading systems provide tight integration between various accounting modules such as accounts payable, receivable, and general ledger. Through workflow-based technologies, these systems route transactions from one user to another and enable management of applicable records (i.e. invoices, purchase orders, etc.) within various transactions in the system. As a result, they provide end-to-end visibility into key business processes such as order-to-cash and procure-to-pay.
- Advanced Features – Some features and functionalities that were previously only available in more expensive enterprise-level systems are now found in solutions geared toward the middle market. These features address issues such as multi-currency, multi-lingual, budgeting/forecasting, revenue recognition techniques, and multi-company, multi-entity financial management and reporting.
- Smoother Financial Close – Newer systems help finance departments streamline the close process with the ability to manage period-end activities and to detect and respond to issues before they occur. These systems offer capabilities such as period locking to prevent incorrect posting to past or future periods, a period close checklist of tasks to be completed sequentially, and the ability to perform financial adjustments for intercompany transactions.
- Better Compliance and Controls – Leading systems help ensure compliance with accounting standards and government regulations. They utilize rule-based reporting capabilities to produce financial reports in accordance with accounting standards such as GAAP and IFRS, and they provide extensive audit trail visibility into detailed transaction history.
- Enhanced Reporting and Analytics – Updated systems provide an array of reporting and data analysis capabilities, aiming to provide a single source of truth at all times rather than relying on extensive sets of spreadsheets outside the core system for analysis. Most systems provide personalized dashboards to create and monitor KPIs that are based on each user’s role within the organization. They usually offer an extensive set of pre-built accounting reports as well as easy-to-use report builders to tailor reports to the company’s requirements.
An updated accounting system acts as the decision support and control backbone of the organization. Making an investment to upgrade your system could equip the management team with the right tools and data at the right time to make better decisions for the business.
Sassan S. Hejazi can be reached at Email or 215.441.4600.
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