IS TRADITIONAL ACCOUNTING HOLDING YOU BACK?

By Gary Epstein • March/April 2017 • Issue 54

Accounting is an important aspect of any business. How a business manages its accounting has a huge impact on its potential for success.

Persisting with a traditional and limited accounting system can hold you back from achieving the level of business success you aspire to — something every business owner wants to avoid. While an ever-growing number of businesses are making use of accounting software or some form of computerised accounting system, with the continuing advances in technology and considering the growth of your business, gauging when to take the leap can be quite challenging. Below we list a number of ways in which traditional accounting can hinder your business growth.

IS YOUR ACCOUNTING SYSTEM OUT OF STEP WITH YOUR BUSINESS?

While a simple worksheet to help you keep track of your accounting might have been sufficient at the start, keeping and maintaining this crude accounting system can hinder your growth potential. When you find yourself needing to use workarounds more frequently, or if your business is moving beyond individual transactions towards uniform processes, you know the time has come to upgrade your accounting software.

WORKING OUTSIDE OF THE SYSTEM

While the market offers a wide variety of accounting software applications, from the most basic to the truly comprehensive, choosing the right one for your business will depend on your specific needs and specifications. When you find yourself increasingly doing things outside of your accounting system, whether it is manual calculations, data manipulations, analysis or report generation, the time has come to look for other accounting software that can accommodate your requirements.

IMPROVED SECURITY, FINANCIAL CONTROL & AN AUDIT TRAIL

If you started your business by yourself or with one or two employees, an accounting system with not-so-tight security might have sufficed. However, the growth of your business probably comes with more hands to help out — these very same hands can wreak havoc on an unsecured accounting system. Simple changes and deletions can have a dramatic impact on your figures; your accounting software should either prevent this from happening or at least include an audit trail.

WHERE IS THE MONEY?

An accounting system is supposed to make it easier for you to keep track of your finances. If you find yourself confused or overwhelmed, wondering how much the business is earning and where exactly you are spending the money, chances are your accounting system is as overwhelmed as you are. It is also an indication that it is time to upgrade your accounting system to one that can handle your data seamlessly and allows you to keep track of your income and expenses.

AVOID A SYSTEM THAT LIMITS YOUR GROWTH POTENTIAL

If the limitations imposed by your accounting system are the reason you are having to say no to a potentially profitable partnership, increased demand from customers or extending your range of products/services, it is time to bid your current system adieu. An effective accounting system should be able to adapt to your business and any changes it goes through, not the other way around.

If you are using traditional accounting software and can identify with any of the ‘symptoms’ listed above, it is time to assess whether your current system is still the right choice for your business.

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