When is it time to look for new accounting software?
There are usually three major reasons people start looking for new software.
1. They need to get the right data
2. There are security issues (or loss of data issues), or
3. Ease of use
Most of the time, commercial contractors make this decision based on their size. Size does play a part in the decision, but the underlying purpose of choosing a software is usually one of those three items. For the most part, contractors are starting with something like QuickBooks or Peachtree, because they are easy to use and have a low upfront cost. Most companies can use these products for a number of years until they reach a point where they hit one or more of those three issues. They are not getting the data that they want. They are having some loss of data or security issues. Or, it is becoming cumbersome, the files are too big or you don’t have the bells and whistles that you need when you have become this growing contractor.
The Right Data
This one takes the most time. Right data is not ALL data! Data for the sake of data doesn’t do you any good. What we are trying to get with our software is data so that we can make the best decisions, the best business decisions. It will start kind of sneaky. It will start with, “Boy, I really wish I could I could see burdened up labor – the true cost of my labor on my job report.” That may be a trigger that starts down a process of maybe I need something different.
Another trigger may be the need for processing a job cost. You may just not have the ability to get someone the right data.
You may want to segregate your company into compartments. Your accounting software is just not built for that type of use. And then you find yourself frustrated that you just can’t find the information you need.
All of these needs all circle around creating a wish list of things that you want in a software. You don’t have to get it all in the first software. Most software in the stage beyond QuickBooks and Peachtree have the ability to add on as you go depending on your company’s needs. The goal of this reason for needing new software is to use it as a team building opportunity. Get your major players together, typically accounting, project management, estimating, and sometimes field people (especially if you have mobile pieces such as mobile time keeping or portals into the client base). Get your players together to brainstorm on what is really needed information.
We have a checklist that may help with that. The checklist has a framework for brainstorming to help guide you through this process.
Security (or internal controls, access to all parts of the software) and Loss of Data
Does your software give everyone that has access to it, total access? For example, can everyone see payroll, social security numbers, anything along those lines? Do you have issues losing data or not being able to back up properly? The loss of data usually corresponds to the size of your data base and whether your software can handle that size of a database. Whenever you have a baseline software, which is one of the simpler softwares, you eventually will have to grow into a bigger software. In a QuickBooks type software, you can get to the point where there is so much data that it is slowing down the software. You will have to go through steps to make sure that your software is running optimally by having a system to archive the data. You can also lose data because there is just too much information for your software to handle.
You may also have a situation where you need mobile access. This may give you access, but at the same time cause conflicts. It may be time to look for a software that gives you mobile access without giving you conflicts.
You want to make sure that your software has the ability to block off certain sections. You want to give project management access to job costs, but not access to payroll data. When you get to that next tier of software, you want to discuss how that relates to security.
Internal controls run along the same lines as security issues. You want to make sure you can log or see what transactions are being changed. The beautiful thing about Quickbooks, Peachtree, and that tier is they allow you to go in and just change the journal entry, or change the invoice, or delete the invoice. In the next tier of software, those functions typically are not available. You actually have a transaction log. If you want to change the invoice, it is more than just a click to change it. You have to go through a process. This enables management to have some oversight over the transactions that are happening in accounting.
Ease of Use
Ease of use really relates to having multiple people having access to data, such as project management having access to job cost. Access to mobile information is also a reason to look for new software. This could be time keeping software that interacts with your accounting software, it could be project manager software, it could be tool tracking. There are so many pieces that you start to recognize that the ease of use becomes a bigger and bigger issue. There is data, way more data. To make sure you have the methodology and the system and the platform to keep all of this data securely, properly, and in the right format becomes a big deal. If you have a need or an interest in having mobile access, you may not have the right software to do that.
There is also the component where people are project management, estimating, accounting, etc. can all use the same database. In this second tier for accounting, there are some packages that have shared platforms. Some softwares had all of the options turned on, then turned it back off. At this stage when you are first trying to decide if you want/need new software, I go back to the wish list whether I want to connect all of those or not. Then you use your wish list to decide how important that really is. For example, there are some great estimating packages and there are some great accounting packages. The same company may not have both of those. Many accounting software packages are built by, you guessed it, accountants. That’s who builds accounting software. Estimating software is built by and for engineers and people that are using that type of data. Many times, those are not the same groups of people. If you can imagine building a software package for a second tier software platform (like Foundation or ComputerEase), they may not have an estimating package. You have to decide how important that is. Do you want an estimating package built by accountants or built by estimators? There are great software packages. A lot of them do a lot to get business development, estimating, business management, and accounting in the same room and build the software. They have made great strides on this, but you are asking a lot of a software package to meet all of those needs and wants in one platform. There is usually some give and take. This is a time for compromise.
If you like, you can use the checklist. Get your team together and discuss what you need as a company. Identify the areas that are a risk, areas that are a frustration, and start dreaming about what it could be like getting the right data, the controlled data, and the ease of use.