One of the most important factors in a growing business is making sure it has systems that can support expansion. Yet, in order to delay investing in more powerful systems, businesses often try to squeeze as much performance from their existing systems – like Xero, QuickBooks and MYOB. With smaller accounting systems like these struggling to keep up with the demands that come with growth, staff are forced to work around the limitations of the software.
While accounting systems are able to support the needs of early-stage or single entity businesses, many business owners find that they need something more sophisticated as they increase their workforce, enter new markets and add to their product offerings. They are fearful that if they stress their existing business applications any further, ‘something will break’.
So how can you know if, and when, it’s time to consider an alternative to your current accounting software?
1. You’ve outgrown basic accounting
As small businesses grow, so too does their business model and processes. They might have more products and complex inventory needs, more employees, more channels, more customers and customer types.
At some point, accounting software’s limited configuration capability will be unable to deliver the functionality required by a complex business.
Accounting software designed for small businesses simply cannot deliver the financial management requirements of larger businesses.
Financial capabilities such as multi-location, multi-entity, consolidation, support for multiple forms of depreciation, budget roll-ups and total-organisational budgets and subscription billing, are all examples of where traditional accounting software falls short.
A few helpful resources:
Levelling up from Xero with NetSuite: Why businesses make the switch + capabilities comparison
Feature-by-feature comparison: Xero versus NetSuite >
NetSuite versus Xero: The essential guide to upgrading your systems >
Competitor Analysis: NetSuite vs Xero >
Infographic: Shopify-NetSuite versus Shopify-Xero >
Is your Shopify-powered business experiencing growing pains? A comparison of Xero & NetSuite with Shopify >
Whitepaper: Has your business outgrown Xero? >
2. You have zero visibility for informed decisions
Business growth is rarely linear. Charting the path involves ongoing trial and error, analysis of data and the ability to adapt. When small businesses begin their journey they often rely on monthly standard reports from their accounting system. At first, this is probably sufficient for business insight.
But as businesses grow, so too does the complexity. The business model and processes, the business entity and data all become complex to navigate.
As the delta increases between reporting via an accounting software and the insight that a business needs, businesses fare aced with a decision to plug the gaps with third party business tools, spreadsheets, workarounds or even reconsidering the application strategy entirely.
3. You are wasting just keeping systems running
Business growth will impact operations in many ways. Increased transactions, departments, channels and customers can strain an accounting platform to the point where performance is degraded or workarounds are designed to circumvent the limitations of the software.
Many businesses buy and integrate bespoke applications to meet these changing functional requirements, and often without sufficient foresight into how it will affect operations. This creates integration mismatches that make systems difficult to maintain and keep stable.
Is your accounting package keeping up with your performance requirements, or are you forced to change your operations or build process exceptions to shield it? Is all that effort worth it?
4. You want to expand to new markets
For many small businesses, growth opportunities lie in new markets. To unlock these opportunities, whether through opening new locations, establishing a foreign presence, selling to intermediaries or directly to customers via channels like ecommerce, businesses need to understand, support and comply with the unique needs and requirements of each market.
From managing different currencies to abiding by foreign regulations, these needs can quickly overwhelm small businesses.
Is your accounting software supporting your growth? Is it causing operational friction? What workarounds have you developed or applications have you have acquired to fill the gaps?
5. You need to avoid unplanned downtime
Time is of the essence for businesses. And for small businesses what they lack in size is gained through agility – faster response to new opportunities and customer demands. But fast-growing businesses need equally responsive and accessible support when they encounter issues – particularly with the business-critical processes that keep their operations running.
6. You need more responsive support
As a business grows and becomes more reliant on systems, they also become more reliant on support. And market-leading small business software firms, like Xero or MYOB, often face criticism over their availability, accessibility, responsiveness and depth of support. Instead, they expect users to rely on guides, community forums, their partners, or some form of email support, rather than responsive on-demand support.
Where to from Xero, QuickBooks and MYOB?
Cloud computing delivers dizzying array of business applications that were previously unaffordable or non-existent. The number of ways to extend accounting software is nearly limitless. However, it’s important to be aware that just because it’s possible to integrate multiple applications to support operations, it may not be the most effective or efficient approach.
Businesses often shy away from investing in a single system because they are unaware of the hidden costs in working with multiple applications. These untracked costs – delays in information, troubleshooting issues between applications and time lost switching between systems – can far outweigh the sticker price of an ERP.
If you’re looking to grow your business, consider proactively investing in a platform that will seamlessly support your success. While low-cost, entry level accounting software may fit your current needs, investing in an integrated and functionally rich platform will move your small business from local to legendary.
If you’ve outgrown your accounting system, we can help.
Switch to NetSuite, and give your business the right tools to support the limitless growth of your business. For a seamless upgrade and a system that grows with you, reach out to us.
