By Paul Sparkes, Commercial Director of iplicit, an award-winning accounting software developer.
Three good reasons to change to true cloud accounting software
More finance teams are migrating their systems to the cloud. Every organisation has its own unique reasons for doing so – but as developers we often see common threads such as these:
- Hardware issues – compared with the cloud, the cost of replacing and maintaining servers and old on-premise software is looking increasingly unpalatable and unsustainable. And that’s before you factor in the increasing number of staff who want or need WFH/hybrid working.
- Multiple-entity accounting requirements – on-premise and entry-level cloud software can’t cope with more than one entity or the need to provide consolidated accounts. Often, organisations will be using multiple copies of their entry-level software across different sites. This results in users having to resort to spreadsheet workarounds and rekeying to consolidate all this information. But these are stopgap solutions that have a nasty habit of becoming entrenched and time-consuming. They can also increase the risk of errors.
- Old accounting software failing to interact with more modern (and typically cloud-based) third party apps such as CRM and payroll systems and charity donor management or membership apps – leading to silo working and a struggle to import vital data. Fortunately, solving those challenges is no longer as daunting as it once was. Changing accounting systems is so much easier now because of the way the software has been developed. There has been significant progress in the mid-market in particular; finance teams no longer have to make a huge leap to complex ERPs that are really too large, too costly and take months (or even years) to install.
So changing accounting software, what was once a nettle to grasp is now more of a soothing dock leaf.
Here are some examples…
- Migrating to the cloud to avoid hardware issues
Nickel alloy pipes supplier Corrotherm has had four accounting systems over the last 30 years – and then hardware concerns prompted a move to the cloud.
Corrotherm Director Ian Newman said: “We were having continual difficulties with our Exchequer software. Added to that, we had an ageing server infrastructure, which meant that we’d have to spend a considerable amount of money if we were to address the hardware issues.
“This made us focus our minds on what we really needed and whether it would be a sensible investment to acquire the latest hardware to support an old on-premise system versus dispensing with the hardware all together and upgrading to a modern-day, cloud-based solution.
“While moving to the cloud was seen as positive for the company, it wasn’t the real driver in our situation; our motives for change were primarily because we just couldn’t continue with the limitations and challenges that our old system gave us. In particular, its cumbersome nature and general slow speed in day-to-day use were really frustrating, but one of the biggest issues was how long it took to extract the data that we needed to monitor the business properly.”
Migrating to the cloud was “pretty much pain free…we were really pleased with how smoothly it went and it’s certainly nothing to be intimidated by.”
- When entry-level accounting software can’t handle multiple entities
International NGO Health Poverty Action migrated to true cloud accounting software because its existing QuickBooks “wasn’t a unified system”.
Health Poverty Action’s Head of Finance & Administration Sandra Tcheumeni Boschet said: “We had multiple copies and versions running to cover all the territories. It was extremely difficult to have a clear understanding of finances across all entities in real- time.
“We found it very challenging, to say the least, to address problems in a territory if they weren’t being identified at the earliest opportunity. Dealing with multiple systems meant that sometimes you would discover issues much later than would be ideal, because there wasn’t a single view that could be accessed centrally.”
What would she advise other finance professionals contemplating a move to cloud accounting software?
“If it’s not something that you can do on your own or something that you’ve never done by yourself, find a really good system accountant to work with. Find somebody who’s got a good understanding of accounting as opposed to just an IT person,” she said.
- Third party systems – going live with a new CRM
A new CRM can often highlight the shortcomings of old accounting software. This is what prompted fire safety specialist Fireco to change finance systems.
Fireco’s Chief Financial Officer Kristian Salter said: “For a number of years now, we have been working on the development of our own CRM system with sales order processing, stock control and dispatch.
“Once this was ready, we could handle the final stages of stock control and bill of materials, which freed us up from being dependent upon the existing system and enabled us to look for something that could be ‘best of breed’ as a finance solution.
“In addition, while our old system had served us very well for 15 years or so, in the last few years it was struggling a bit and didn’t seem to be keeping up with some of the technology advances that I could see in other products.”
Kristian advises finance teams to research and trial any shortlisted systems thoroughly: “Assess their strengths, find their weaknesses and ascertain whether you want both the system and the provider as a partner.
“Once you are convinced, it is important to convince those around you. Accounting systems are generally in place for many years and colleagues can become very accustomed and attached to old systems and working practices.”
Global Banking & Finance Review
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