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Posts Tagged ‘Accounting systems’

Okay, so let’s dispel that myth right away: No, a robot won’t be your accountant.  At least not any time soon.  But robot-like accounting technology is doing a lot of the grunt work accountants do, particularly in some very large and far-flung operations, according to a recent report in the Wall Street Journal (8-15-17).

Companies like Duke Energy, Red Hat and Dun & Bradstreet are using advanced technologies to close their books faster than ever before.  In fact, PricewaterhouseCoopers states that it now takes companies just 4-1/2 days to close their books each quarter, down from 6 days in 2009.  Companies that close their books faster, of course, have results in hand sooner, and that helps in making better decisions faster and staying nimble.

Among the most helpful advances have been technologies that accelerate the book-closing process.  Companies are increasingly automating closes and reducing manual activities, as they use their accounting systems to collect ever more transactional data for management reporting on things like cost of goods sold, revenue, shipments and other key performance indicators.

At D&B, the CFO notes that “the lure of cost savings has prompted investments in robotics and automation technology that accelerate the quarterly reporting process.”  D&B closes its books now in four days despite operating across over 200 countries.  Their teams are already testing potential applications for robotic process automation in finance.

Increasingly, companies are utilizing more widely distributed and more powerful accounting systems, tracking and capturing more categories of revenues and expenses than ever before, in the effort to save time, reduce costs, report more quickly and gain a competitive advantage by managing more of this data-capture via automated information systems.

Accounting reporting has historically been a low priority among companies who often do it on a shoestring.  But actionable reporting that can drive better decision making are a key reason to pay more attention to management reporting, and a reason more companies today are more fully utilizing their accounting systems to automate more, faster.

The fact that today’s modern accounting, MRP and ERP reporting systems can do this on a PC makes these benefits available today to virtually any company willing to make the investment to deploy and learn how to use them.

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In our prior post we began listing some of the red flags, incidents culled from real-life incidents as noted in a white paper from Tribridge, which hurt businesses in multiple ways.  As it turns out, there are a lot of them, so we’re adding a few more here to round out a two-part post.  The original document can be found here.

Continuing our list of issues we often see clients wrestle with – and waste TONS of time and money on – here are a few more that can be remedied by taking the plunge and finally updating that old, tired accounting system to one of today’s new offerings.

  1. Errors tracking time and equipment. Paper based tracking systems invariably lead to mistakes, but when those mistakes show up in somebody’s paycheck as the result of mistaken record keeping, things can get a bit testy.  Multiple teams performing manual time entry on paper sheets is one such recipe.  Not to mention a lack of insight into T&M performance (since it’s all written down instead of inside the computer).  Today’s modern systems provide web-based data collection opportunities for remote employees.  These can feed payroll – or a payroll service – and later provide all the reporting a company needs to track and manage its service performance.
  2. Document delays that slow month-end close. We see it all the time: companies that can’t close their books within a couple days of month-end.   (Some can’t do it within a couple months!)  While there are a host of causes, most have to do with manual processing of various sorts, often coupled with high transaction volumes and multiple silos of unconnected information. An ERP system is built to manage and consolidate exactly this type of month-end chaos.
  3. Service and warranty confusion. Service management software, often built piecemeal a decade or two ago and with few links to accounting, can cause delays to service work, lack of up to date inventory information and poor warranty tracking that makes tech’s lives difficult.  A fully integrated modern system utilizing tablets in the field can record service work, material consumption and keep warranty information up to date.  Orders can be placed and managed, and inventory and assets can be tracked accurately and almost instantly.
  4. Inaccurate inventory levels. Whether you’re in retail, wholesale or manufacturing, inventory counts.  Errors in counts, lack of consistent cycle counting, month-end closing complications, difficulty with counting bulk-weight items (like nuts and bolts), and no inventory into warehouse moves or inter-store transactions are but a few of the ways that inventory can become inaccurate, or worse.
  5. Unsupported inventory practices. A lot of older systems do not support all the recognized inventory accounting and costing practices (like LIFO, FIFO or Standard) or, if they do, they are often awkwardly implemented and difficult to use.  This can lead to using spreadsheets to manage inventory.  But manufacturers need to be flexible enough to manage processes unique to their particular build-to-order or build-to-stock or engineer-to-order requirements.   Today’s newer systems allow for better synchronization of build-to-order and –stock situations, and allow for a choice of costing systems (typically Standard, Average, LIFO and FIFO) which, with careful management and implementation, can better match up with manufacturers’ exact requirements.

Time and space prohibit us from sharing even more red flags.  Suffice it to say that if even a few of these issues are yours or sound familiar, it may be time for you to start your search.  The answers lie in today’s advanced, sophisticated, and yet very cost effective new ERP systems.

 

 

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A recent white paper from a company called Tribridge highlighted 15 ways culled from real companies in in which those companies’ accounting system was hurting their business.  As we reprise a few of them here, it’s amazing to see how many similar situations we’ve run across with our own clients over the years.  How many look familiar to you?

  1. Unstable system, slow performance. This is the most common one.  Reports run slowly, the system locks up regularly and error messages are common.  Modern systems today are built on solid transactional databases, mostly SQL in the PC world, complete with transaction rollback capabilities to minimize corruption.  Newer systems – once properly installed and finely tuned – will run everything faster, from daily transactions to month-end reports.  (While the Tribridge report skews toward Microsoft Dynamics as a solution, it’s not the only good one out there.)
  2. A growing paper problem. Manually entering invoice data into the system.  Tracking down and matching up invoices.  Searching for old orders or payment history.  And so on.  With an automated Accounts Payable system, you eliminate much of the office paper flow.  As well, invoices can be coded intelligently or by approvers during a rules-based approval process.
  3. Production schedule delays. Delays, inaccuracies and frequent rush orders (with extra freight charges to expedite) are tell-tale signs of the problem.  Modern systems allow for full integration of EDI integrating them directly into production scheduling, thus eliminating many of the human errors that plague so many distribution and manufacturing companies.  Yes, it takes time and effort and patience to set it all up, but once you do, it just runs.
  4. Inaccurate cost calculations. Whether it’s losing a contract due to inaccurate pricing, or building in a cushion, or high raw material costs due to poor inventory tracking or simply the unending burden of manual, time consuming reporting – these are all common results of inaccurate costing.  Costing is tough, to be sure.  They comprise many of our own most complex implementation issues for clients.  But they must be tackled, in modern systems they can be, in order to ensure peak performance, accuracy and ultimately profitability.
  5. Time wasted having employees create reports manually. Employees often find themselves compiling report data from three, four, even five separate sources.  They often have to wait for others to compile their contribution.  And then there’s the number/data double-checking, the occasional Excel formula error (or change).  All lead to laborious, redundant and often inaccurate reporting.  Financial reporting need not be that difficult – once you have your system implemented properly, well-tuned and honed by trained users.
  6. Selling out-of-stock products. When accounting is disconnected from inventory, the warehouse or the e-commerce platform you might sell by, you may end up managing stock keeping units in more than one system.  In-stock quantity errors are not uncommon.  Mistakes happen.  You can end up buying out-of-stock items on rush orders for the wrong price.  You lose visibility.  When everything is disconnected, you lose money.

We’re not half-way through Tribridge’s list (white paper here), so we’ll look at a few more and wrap up in the following post.  Stay tuned.

 

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