Accounting systems are not something you change or replace very often. However, as your company grows in size or complexity, you will reach a point where manual processes are draining your productivity and you struggle to analyze the growing range of your financial and operational data. You’ll need a better way to handle accounting within your company. You’ll need to modernize your system.
Similar to earlier versions of such systems, updated accounting systems offer functionalities that are needed to successfully run an accounting department and support the company with proper accounting and financial support. Newer, updated systems, however, have introduced features and capabilities that were simply not available few years back. Here is a sampling of capabilities that you could commonly find in most leading middle market solutions:
Integrated Processes – Most leading systems provide tight integration between various accounting modules such as accounts payables, receivable and general ledger. These systems leverage workflow based technologies to route transactions from one user to another and enable management of applicable records (i.e. invoices, purchase orders, etc.) within various transactions as being conducted in the system. As a result, these systems provide end-to-end visibility into key business processes such as order-to-cash and procure-to-pay.
Advance Features – Some of the features and functionalities that could historically be found in more expensive systems serving larger organizations, are now available to middle market companies as well. These features address issues such as multi-currency, multi-lingual, budgeting/forecasting, revenue recognition techniques and multi-company, multi entity financial management and reporting.
Financial Close – Modern systems help finance departments streamline the close process with capabilities to manage period-end activities and to detect and respond to issues before they occur. These system offer capabilities such as period locking to prevent incorrect posting to past/future periods, period close checklist of tasks to be completed sequentially, and ability to perform financial adjustments for intercompany transactions.
Compliance and Controls – Leading middle market accounting systems help ensure compliance with various accounting standards and applicable governmental regulations. They utilize rule based reporting capabilities to produce financial reports in accordance with applicable accounting standards such as GAAP and IFRS and provide extensive audit trail visibility into detailed transaction history.
Reporting and Analytics – Updated systems provide an array of reporting and data analysis capabilities, aiming to provide a single source of truth at all times rather than relying on extensive set of spreadsheets outside the core system for analysis. Most such systems provide personalized dashboards to monitor KPIs applicable to various users, based on their role within the organization. They usually offer an extensive set of pre-built accounting reports and provide easy-to-use report builders to tweak such reports based on each company’s requirements.
In summary, an updated accounting system acts as the decision support and control backbone of all modern organizations and as such, having an updated system that meets the needs of the company, could equip the management team with the right data at the right time to make better decisions.