Why Your Accounting Software May Be Holding You Back
by Marty Kirshner, CPA, MSA & Joe Ciccarello, CPA, MST, Gray, Gray & Gray, LLP
Your financial management programs need to evolve with your business
The demands of the energy market are relentless and continue to expand and accelerate. If you can’t react fast enough to changes and customer needs, your ability to compete will be stifled. One thing that may be holding you back is entry-level accounting software that simply can’t keep up with your company’s growth.
Millions of small businesses start out using basic accounting software, and it is typically a good choice for companies early in their growth cycle. But these popular programs are not the best option for sustaining and supporting growth. Most are simply general ledger solutions that do not support the range of capabilities a growing organization needs. Running complex business processes across areas such as financial management, revenue management, fixed assets, purchasing, order management, billing, inventory management, delivery, and more simply does not play to the strength of “beginner” accounting programs.
These simple programs can also be limiting due to manual processes, errors, and lack of real-time data and visibility to make important business decisions.
If you are running the financial management and accounting for your propane or fuel oil company through a basic accounting software program, here are five warning signs that it might be time to step up to a more complete and robust solution.
1. You can’t get real-time data. Once upon a time a business owner or manager could wait until the end of the month to close out the books and look at the numbers. Can you imagine waiting that long now? Up-to-the-minute reporting is an essential business tool, especially for a company with multiple locations and many “moving parts” (like trucks, inventory turn, service calls). In order to make quick decisions to avoid a problem or take advantage of an opportunity, you need information at your fingertips without having to wait or dig it out of a spreadsheet.
2. Manual entry means delays and mistakes. Entry-level accounting software typically require you to enter data manually. That is time consuming and leads to errors that may not be caught until they cause damage. Not only that, but simple programs are also not good at sharing data across platforms. So, information that should be going into your customer relationship management (CRM) program or inventory management system needs to be retrieved, converted, then transferred. Too much time, too many opportunities for costly mistakes.
3. Too few people can access information. A tiny company with only a few employees and low sales volume might be able to get by with one individual running the financial side. But as you grow and expand, so does the number of people who need access to data to do their jobs. This is compounded for companies with more than one location, or when information needs to be shared across departments (like between sales and purchasing, or service and inventory management).
4. You are doing more accounting outside the program than inside. As your company’s finances become more complex you may find yourself filling gaps in reporting and management with other programs and applications. Because not all fuel management software integrates seamlessly with all accounting programs, you may find it necessary to manually track industry-specific entries like contracts and prepayments, parts inventory, or updating sales tax rates.
5. You can’t adapt quickly to changes in the business. Nothing remains static, and that includes your business operations. You need built-in flexibility to respond to shifts in the market, challenges from competitors, or changing customer needs. For example, customers want to be able to place orders online or check the status of their service request, even when your office is closed. With a basic program you don’t have that option, slowing down your response time and losing credibility with customers.
What’s the solution? There is a whole new generation of cloud-based, real-time business and financial management platforms that incorporate the flexibility and nimbleness you need. These software products are engineered to be scalable as you grow, can more easily be kept up to date as technology advances, and some (like Sage Intacct) are readily integrated into popular fuel company management platforms. You’ll be able to get the accurate information you need, when you want it, and to distribute it as necessary to the people in your organization who need it.
Marty Kirshner and Joe Ciccarello are Partners in the Energy Practice Group at Gray, Gray & Gray, LLP, a business consulting and accounting firm that serves the energy industry. They can be reached at (781) 407-0300 or email@example.com.