The Australian accounting software market is estimated to worth over $500m a year, so it’s little wonder the country’s top software providers are jostling for share of market and share of voice.

The choices for manufacturing businesses are many and varied and the capability requirements extend across inventory, payroll, foreign currency and any number of other functionality aspects. With the major players such as Xero, MYOB, Netsuite and Sage competing for your business’ dollars, how can you separate the benefits for your business from the marketing hype? Is it worth upgrading your software? Or are these well-advertised new packages just the same products with unnecessary bells and whistles?

Making the right choice for your business is critical but the first step before embarking on a major overhaul of your accounting system is consideration as to whether you need to update. If you’ve been considering your options or are simply curious, here are five signs that your accounting system could be out of date.

  1. Your business is reliant on Excel

We’re accountants, so naturally we love Excel – in fact it’s a daily part of business life. However, if the majority of your business’ accounting processes are taking place in Excel, it may be time to upgrade.

Business today moves at a faster pace, there is more information to process and analyse, regulations are continuously changing, and it’s more than likely your business requires multiple performance reports. Manually entering information and formulas into Excel is not only time-consuming, it can slow everything down while you check for typos and other user-errors – just ask your bookkeeper or finance team.

Additionally, the ability to pull together information from across the business to make timely decisions is critical. And if your business is reliant on Excel, or worse still if Excel doesn’t integrate with your current accounting software, you could be falling behind your competitors.

  1. You’ve lost data in the past 24 months

Maintaining your data on hard drives or an internal computer network requires a rigorous regime of back-ups. Human error, hardware malfunctions and malicious attacks can all lead to a loss of data, costing your business substantial time and money. If this has happened to your business in the last 24 months, it may be time to look at a more automated back-up process.

Accounting systems in the Cloud all include some level of automated off-site data back-ups, either directly in the software or via third-party service providers. Knowing that your inventory records, financial reporting and payroll data is proactively managed and protected from security risks can provide invaluable peace of mind. Moreover, with a Cloud-based solution, software updates occur automatically – eliminating those time-consuming upgrades to your PC and issues juggling old back-ups captured with prior versions of software.

  1. Data from one system is manually entered into other systems to produce your accounts

Advances in technology have significantly reduced the need for data entry. Modern accounting systems can integrate with multiple third parties such as your bank, receipt management and payroll. Transactional data can be readily available in your accounting system via a ‘live feed’ reducing the need to manually upload information. Having a close look at the cost of data entry and administration to your business may be a real eye-opener.

  1. Not all users of the data have access at the same time

For any one business there may be multiple users of the same information. Waiting for reports to be updated and managing version control can be time consuming, frustrating and allow a significant margin for error. Accounting systems with multi user-functionality allow you, your team, and importantly your advisor to access the same data and work on it simultaneously.

Take for instance, a business with a large sales team. If each sales executive is out on the road taking orders at the same time, how is inventory managed? Using a traditional accounting system, the sales executive is reliant on the latest stock list, which at best has been generated that morning, at worst at the beginning of the week.

The latest software allows staff to process a sale on their smartphones or tablets in real time, instantly updating stock levels for the whole team to access. Team members are also able to monitor their own sales targets and management has real-time access to the business’ performance.

Spending less time on data management translates to less cost to your business.

  1. You can’t get the information you need away from the office

Ask yourself, where do you do the majority of your work? At the office, out in the field, at a client’s premises, or perhaps on the road? Advances in technology have led to a mobile workforce, with business owners and management working from laptops, tablets and smartphones. These changes allow you to be closer to your clients and employ flexible work arrangements.

But has your accounting software caught up? Most modern software packages allow you to access critical information such as your business account balances, outstanding invoices and cash position from anywhere with an internet connection. Not only that but most providers also offer a range of apps for use on tablets, smartphones and other devices.

Accounting software and information systems have advanced in capability and functionality significantly over the past five years. Many of the improvements have also resulted in price reductions as well, particularly with some of the cloud based systems. If you’re bound to your PC, you may be imposing unnecessary restrictions on yourself and your business.

Damian Sutherland is a director of William Buck (Vic) Pty Ltd Chartered Accountants. AMTIL has a service partnership with William Buck as an exclusive benefit to our members. For more information, contact AMTIL’s Corporate Services Manager Greg Chalker at Damian Sutherland can be contacted on 03 9824 8555.