In this third in a series of posts (which began here) on selecting an accounting system, based on a white paper by Geni Whitehouse found here (and cutely subtitled “Even A Nerd Can Be Heard”), we take a look at still a few more reasons companies make the choice to move up from entry-level accounting systems, like QuickBooks, to the more robust solutions offered by many of today’s top publishers.
As Whitehouse notes in her paper, it’s “time to bail” when…
An accounting system either has no structure for organizing accounts, or relies on hard-coded account segments, [and] you end up with the following recipes for disaster:
- An unwieldy chart of accounts
- One dimensional data with limited analysis and planning
- Rigid financial statements that depend on the order of accounts in your general ledger
A typical hard-coded structure might look like this:
Account Dept Loc
6000 100 100
6100 100 100
6200 100 100
6000 200 100
6100 200 100
6200 200 100
Such a rigid methodology is not conducive to flexible reporting, and if not “dimensionalized” to enable slice and dice reporting of selected, key departments and categories, leads to a system that simply cannot provide the necessary departmental and corporate financial reporting that is necessary to run a fast-growing, expanding business. In fact, it’s not even sufficient to run a slow-growing steady business, if what you desire is the ability to truly view, understand and share new business insights.
To ensure good business visibility and to deliver key insights, you need a system capable of providing you with, and measuring against, key performance indicators and significant accounting ratios.
And we’ll take a look at how that figures into the equation in our next post.