The importance of accountancy software

Winning new business, increasing profit, meeting customers. These are the things that give you a buzz and help to build your business. But there's no avoiding the fact that the software that manages your accounts is the backbone of the operation. When it comes to changing or improving your current system it's not easy to pick the right package. For a start there are more suppliers to choose from than ever as some of the likes of SAP, normally associated with bigger businesses, have decided to tap the entrepreneurial market.

Then there is the ever-growing range of products available from boxed off-the-shelf packages to more tailored bespoke IT solutions which effect all parts of your business.

Adding to the problem is that for most businesses, accountancy packages are a one-off purchase unlikely to be repeated so no CEO or FD could ever need to, or expect to become an expert.

The most important question for your business is whether you need to change your accountancy software. In some cases the need for change will be obvious: it could be that you may be keeping your information on different databases; that a client demands you start delivering information in a different way; or that your system is simply to old and clapped out to meet your needs. In other cases the need for change will be less obvious. The tendency to milk software beyond its useful life is a common trait among smaller businesses. In this case your business may be missing out on functionality which could help your staff save time work more efficiently. If for instance you spend a lot of time importing and reformating data in excel then it is probably time for your business to look at a upgrading or changing.

Rick Holroyd is one person who has been through the process of change recently with his contract catering business, Holroyd Howe. Having grown his business using Sage Line 100 software for six years he decided the company needed something more sophisticated to meet a variety of needs which had emerged as the company got larger.

“Being in the catering business we have a disproportionately large purchase ledger. It has to handle 9000 invoices a month from suppliers for items like groceries that are ordered daily,” says Holroyd

"We also want something that can extract financial data in one way and present it in a greater variety of formats to suit clients' differing requirements."

And so the company swapped from its Sage package—what Holroyd describes as a loyal servant—to a Microsoft solution. Holroyd saw the switch not just as an pure software purchase but as an investment in the business going forward and advises other companies to do the same.

"Don't go for something that will just do. It's wise to invest in the infrastructure of the business. But always ask 'what is the benefit for the organisation?' " he says.

Your accountancy software is there to make your business function more easily and allow you to see the figures which help you make the right decisions.

If it isn’t you end up wasting time and money on something which doesn’t work for your business, as Cathy Humphry’s, finance director of recruitment company MaydayExec, found in past. After a hiccup with one system, she switched to an Access Accounts package after it was suggested by an employee who had used the software before.

“Interestingly enough when our auditors saw it in action they decided to buy it too,” says finance director Cathy Humphreys. "People should be really sure before they commit themselves to a package otherwise you waste money and time transferring data to a system that may not be right.”