Outgrown Your Accounting Software? Signs It’s Time to Upgrade to ERP

Financial management software is a tremendous help to business finance offices. It makes tracking expenses and revenues easier and provides key financial data for your business’s bookkeeping and accounting needs.

But like many things in business, there are tools better suited for your organization based on your size and business needs. While financial management software like QuickBooks is great for businesses when they’re starting out — growing, more complex businesses may need financial management software with greater capabilities.

Explore reasons your organization may be ready for an upgrade to an enterprise resource planning (ERP) system and the benefits you could achieve.

Your organization is growing

If your organization is growing, the financial management software you’ve been using since you started your business may no longer be sufficient. Some accounting software has a small maximum number of users, which is limiting if you have a growing team.

Some software also is limited to working in one location. If you have more than one location — or are looking to in the future — there are many benefits to cloud-based software. Cloud-based software allows access from an unlimited number of locations and easy remote access.

Some ERP systems also include customer relationship management (CRM) functions, which are helpful as your customer base grows. CRM systems allow organizations to store and manage their customers’ data, which is beneficial for both client service and sales teams.

Your organization needs better accounting reporting

As your business grows, so usually do your accounting needs. Basic accounting software includes features such as a general ledger, accounts receivable, accounts payable, and bank feeds. But as your business grows and gets more complex, you may also need:

Tax management with flexible tax reporting

Look for an ERP system with the ability to handle sales tax exemption certificates, tax zone reporting, and a comprehensive audit trail.

Payroll management

Seek functionality to help with:

• Setting up overtime rules
• Managing deductions and benefits
• Setting up pay groups and employee classes
• Defining earning type codes

Multi-entity and intercompany accounting

If your growth has resulted in multiple entities, this functionality is essential. Seek an ERP system that allows you to centralize purchasing and invoicing for multiple businesses and teams, automatically allocate accounting transactions among companies, and link bank accounts to specific companies for their exclusive use.

Global accounting

For companies with international growth goals, this option is also a must-have. Look for a system that allows for multiple base currencies and multicurrency pricing and supports automated buy/sell relationships between entities across borders.

You need industry-specific capabilities

Basic accounting software provides the same features across the board, but more complex ERP systems have industry-specific capabilities. Here are some tasks ERP systems can help with:

• Manufacturing — Improving inventory management and reducing carrying costs
• Retail — Gaining real-time inventory visibility, automating SKU generation, and reducing shipping time
• Construction — Managing hundreds of open projects simultaneously
• Distribution — Processing orders automatically

You’re looking to further scale for growth

If you’re looking to expand domestically and globally, you’ll need to manage multiple entities, currencies, and localizations simultaneously. You may also need to:

• Make intercompany transactions
• Branch into new tax zones
• Meet a variety of different financial and regulatory requirements
• Manage leases
• Handle stocks, bonds, loans, etc.

Obviously basic accounting software won’t be able to handle all that. As your business grows, you can greatly benefit from using a centralized ERP system that goes beyond just accounting to integrate all your business operations.