Not just a tool; more a business solution
Choosing accounting software takes time and effort. In the long run finding the right package is an effective way to reduce business costs. Patricia Moore has the trends, the options, the issues and loads of advice.
If your accounting software has you thinking ‘there has to be a better way’, it’s overdue for an overhaul; do it before you tear out too much hair trying to get the information you need.
“If you can’t access, or even understand, your current financial position – and feel as if the bookkeeping has control of you rather than the other way round – it’s time for an upgrade,” says Kirsty Harman, product marketing manager at Xero.
Unfortunately many businesses tend to consider upgrades around key milestones like their financial reporting cycle or compliance changes in government legislation.
MYOB general manager Julian Smith advises planning an upgrade around the needs of the business. “You’ll see a range of signs. Some will be fairly obvious; a system that’s bursting at the seams will be slow and cumbersome. Others are more subtle, but probably more significant in terms of the success of the business.” These may be a lack of information needed to make good decisions, an inability to forecast accurately, ‘silo-ed’ information others in the team can’t access, a lack of compliance – or someone crucial to the business holding information only in their head.
Tish Brindle, general manager of Accredo, says a common symptom that all is not well is people starting to run parallel systems. “Lots of Excel spreadsheets separately keeping track of what’s happening. Then someone leaves and the information’s not at everyone’s fingertips.”
Technology is a moving target, says Catie Cotcher, general manager of Reckon NZ, the distributors of Quicken, QuickBooks and host of QuickBooks Online. “To stay operational and compliant, business owners should frequently evaluate when a change may be needed.” It’s also important not to see accounting software in isolation. “It’s not just a tool. It’s a business solution optimising growth, business profitability and efficiency. If the most important thing to a business is their financial data and information, then the tools that manage that information need to be equally important.”
But business owners and managers are often slow to implement changes. The ‘we’d like to do it someday’ scenario can last a long time, says Brindle. “We’ve tracked people for four years from initial enquiries; there has to be something that’s focusing their mind on the change.” This can be something the current package can’t handle, or simply not getting the information they need, she says. “It may also be a major supplier pushing them to work with them electronically.”
Weighing the options
The range of software options is huge; smart businesses will work backwards when making a choice. By understanding what your business demands from an accounting package and knowing the role it will play in the growth of the business, you’re in a better position to choose the right solution. In essence this will mean more financial control, better understanding of the performance of the business, and more freedom, says Smith.
“More time to either do more of what you love in the business, or more time outside it, whether that’s time with the kids or on the golf course!”
Indeed, SMEs would do well to first ask themselves how involved they want to be in the accounting operation. “Do they have the accounting knowledge to use the solution and make sense of the information? Do they have time to do their bookwork?”asks Richard Reese, BankLink general manager, operations. He notes a tendency for small businesses to think doing their own books will save them money. “The reality is systems that are too complicated, or have functions they don’t need, mean they often struggle with DIY solutions and provide accountants with information that’s incomplete or incorrect.”
Fine tuning your key needs and requirements still leaves plenty of choice. “The proof is in the pudding,” says Xero’s Harman. “Ask about free trials. Being told it works well, then finding it doesn’t fit your needs, is just frustrating. And check with potential suppliers on how often upgrades and updates occur. Do you pay for them or are they free? This also gives a better picture of what the software actually costs – which can be dramatically different from the advertised price.”
Security is another issue, says Harman; “How is the system kept secure, is data backed up regularly and is security audited by a third party?”
Training and on-going support is crucial. Even if everything’s going to be better at the end of the process, changing accounting systems can be painful, says Brindle. “Staff need to be retrained. They knew what they were doing in the old system. There will be differences with a new one.”
If people have a problem they should be able to get hold of somebody and ideally it will be someone local. It should be part of the package but ask exactly what’s involved. MYOB provides “expert training in specialised classroom environments or online, tailored to every level of expertise,” and Reckon has a nationwide network of consultants to train and advise on the best solution for a business.
Harman advises asking how contact is made for support, “Phone or emails or some other way? Is it available 24 hours? Does it cost anything?” SMEs should expect access to an online community, she says. “Being able to interact with other users, discuss problems and swap stories as to how to get the best out of the software is invaluable. It saves time and adds tremendous value to the business by making your software easier to use.”
The cost of a new accounting package is obviously a consideration; suppliers prefer to talk ‘value’ rather than price. It comes back to knowing what you need, says Brindle.
“Big systems have lots of bells and whistles but if you don’t actually need them, then you’re not going to get value out of them. I don’t think you necessarily have to spend a lot to get the best solution, but doing your homework and getting something that’s going to work for you certainly pays dividends.”
MYOB’s Smith says a good solution needn’t be expensive. “For example, MYOB Live Accounts, our online solution which is ideal for most small or start-up businesses, starts from just $25 a month.”
And Reckon’s QuickBooks Online, with all the functionality of the Enterprise version, plus anytime, anywhere availability, comes at a much lower subscription cost than the traditional desktop product, says Cotcher. “It’s about tailoring a specific version to each business to get best value.”
More and more businesses are getting more connected, adds Brindle. “Making sure you have a package that can readily push information electronically to suppliers and pull it from them – and the same with customers – is very important and it’s only going to get more so.”
People buy accounting software because it gives them what they want, says Mike Rich, managing director at Attaché Software. And what they want is more time, more money and less stress. “They want to improve their businesses and to do that they need seriously good, seriously simple IT. And they need to know how to use it.”
His conclusion is that Attaché Software is in “the business improvement business”, and believes simply arming SMEs with the tools is not enough. “It’s also important to have the strategies and tactics that interface with those tools. That’s the next step for software developers.”
Choosing accounting software takes time and effort. But it’s worth it – in the long run the right package is an effective way to reduce business costs. Ask your accountant for advice; the easier it is for your system to work with theirs the more cost-effective it becomes. Unless they really understand the challenges your business faces, don’t rely on advice from mates. Talk to people in a similar type of business – there may be an industry specific package that’s perfect for your requirements. When you’ve decided on a particular package, talk with other users. “It’s very easy to say ‘yes, we’ll customise this and customise that’, but do they deliver on their promises?” says Brindle.
“You need to look at all your options,” says Reckon’s Cotcher. “Evaluate and make an educated purchase that suits your business. It’s not just about price, but business requirements and the functionality of a product that will grow and develop with your business needs.”
Cloud solutions: a silver lining?
In what sounds like met office meets IT, ‘cloud’ computing is enabling access to business information from data centres located across the globe, anytime, anywhere – provided Internet access is available. Such online solutions are becoming increasingly popular, reports MYOB’s Smith. But, if choosing between online and desktop, consider what each can bring to your business, he says.
“It’s also important to think about the future in terms of your data. Will the [cloud] solution provider you choose be around to store your essential business information for as long as you need it and the IRD demands it?”
(The issue of New Zealand taxpayers keeping their business records in the cloud and outside New Zealand was raised by the Inland Revenue Department in a ‘revenue alert’ in December. Both Xero and MYOB, the largest providers of cloud computing services in New Zealand, are working with the IRD to clarify the situation but say customers have no need to be concerned.)
MYOB’s next generation of products – due for release over the coming months – will provide a combination of both desktop and cloud computing options, says Smith. “The best of both worlds; the convenience and ready access of an online solution, with the richness and functionality of a desktop solution.”
Delivered via the accountant, BankLink provides just such a solution. “Desktop solutions that are installed locally on a business owner’s computer still have their place and, in conjunction with the convenience of online, are a great way for small businesses to work with their accountants,” says Reese. Next year they’re launching, to accountants, a range of solutions for their clients that operate online and on desktop. “For the small business owner this will mean they can access and work on BankLink software and data online but be able to download a copy to their computer and work offline when they want to, so they are not always reliant on an Internet connection.”
For businesses with several people accessing data from multiple locations it’s hard to look past the functionality and value of Reckon’s online hosted version, says Cotcher. “It adds flexibility as well as added security benefits such as automatic backups.”
Improved security is something not completely understood by the market, although it’s only a matter of time, and confidence in the online world, she says. “It’s such new, innovative and exciting technology and sometimes there can be resistance to such radical innovations.”
The latest cloud-based developments are providing opportunities for small enterprises to manage their finances on the run. Xero recently introduced an iPhone app that lets users check their bank balances, instantly get directions to an address with integrated Google Maps, take photos of expense receipts rather than hold on to hard copies, and email invoices from any location – a huge plus for a wide range of businesses which are on the road, including tradesmen who can immediately bill a just-completed job.
Source: nzbusiness.co.nz« Back to articles