Outdated Accounting Software – 10 Obvious Signs: Using Outdated Accounting Technology Adds Needless Time and Cost

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As an outsourced accountant, bookkeeper or consultant, you needn’t
be a computer geek to assist your client’s entry into the 21st century…

cloud summit explains the high cost of outdated accounting softwareOftentimes small business owners don’t realize that they are still using an accounting system that has gradually (or rapidly) become antiquated.  Often they are not cognizant that they would save time and money with a suitable upgrade combined with various add-ons.  Doug Sleeter’s famous “Legomaster Chunkification” has become the order of the day.

Just be mindful of certain tell-tale signs, in Letterman-style descending order …

Outdated Accounting Software Signs #10:
– Old, Antiquated and/or Obscure Software

During the past decade accounting software systems have consolidated and streamlined.  Software applications demonstrate increased flexibility, speed and connectivity.  Even accounting for specialized industries no longer mandates  specialized software.

Outdated Accounting Software Signs #9:
– Lack of an Accounting System Budget

If a business isn’t budgeted to spend an annual amount on keeping it’s  accounting system humming, for upgrading application, staff training, and staying up to date with industry developments, then an accumulating deficit can become amazingly large.  Software makers characteristically release new versions yearly, but client often don’t instantly see the value from automatically upgrading to the newest versions.  This leads to the pitfall of ignoring all updates.  A good balance is to advise the client to stay within the previous two versions.

Outdated Accounting Software Signs #8:
– Repeated Calculation Errors

Report Errors, including tax calculations, margin percentages, inventory turnover or foreign currency translation are a red flag for issues stemming from incorrect set-ups.  When you encounter these issues, take the opportunity to discuss a potential outdated accounting system that needs review.

Outdated Accounting Software Signs #7:
– Manual Spreadsheets Are Being used

When an accounting system cannot immediately produce a particular type of report, the conventional 20th century approach is to create manual spreadsheet reports.  Often such manual spreadsheets are blindly re-created every month rather than producing the report automatically, which has never been easier.

Outdated Accounting Software Signs #6:
– Reports Don’t Fit the Business

Small businesses evolve, adding new product lines, service offerings and locations.  They shuffle their management and staff.  They switch their focus.  When an outdated accounting system no longer reflects such changes, reports can devolve to increasing irrelevance.

Outdated Accounting Software Signs #5:
Lack of Ideal Reports

When examining your client’s financials and reports, think about what reports you’d wish to review if you were the client.  If a report is ideal to manage the company optimally, then the system must  produce it.

Outdated Accounting Software Signs #4:
– Chronic Late Reporting*

Chronic late reporting might be a procedures issue and not  a software issue, but it’s nonetheless a sign that some change is needed.  Look for additional red flags:

  • Suspense accounts accumulating balances during the period that have to be reconciled,
  • Waiting for information (e.g. bank statements),
  • Transactions that are booked one way during the month, but have to be adjusted at month end,
  • Differences in intercompany accounts,
  • Complex allocations or variance calculations

*Source: CPA Practice Advisor

Outdated Accounting Software Signs #3:
– Tension between Managers Over Reports

Manager should rightly debate the direction and operations of the business, never the accuracy of the reporting.  Consternation around reports and statements is a telltale sign of an outdated accounting system.

Outdated Accounting Software Signs #2:
– Poor Remote Connectivity and Collaboration

Today’s smart business owners and managers are best served with real time accounting and bookkeeping and team members who possess the access and tools for same page collaboration at all times. Software as a Service (SaaS) accounting systems are on the rise, though they don’t always deliver the fullest functionality that desktop accounting systems are famous for.  Personally, I tend to recommend (and mostly use) various QuickBooks desktop versions hosted in a cloud environment (we use Cloud9 Real Time) to achieve ‘best-of-both-worlds’ desktop apps on the cloud systems, for our firm and our clients.

And the #1 Sign of Outdated Accounting Software is …
– The Boss Doesn’t Know What’s Going On!

Sometimes a simple lack of communication is the culprit.  The team isn’t aware of what the system is capable of and the accounting staff is oblivious to what management needs.  Some well-articulated questions can result in a happier client and a more profitable engagement for the outsourced accountant, bookkeeper or consultant.

nancy gulla on outdated accounting softwareNancy Gulla is a partner with ADMAX Catalyst QuickBooks division, heading Client Support Services and New Client Development. She has provided small business bookkeeping and administrative support and managed bookkeeping and support teams since 1988.  Nancy and her team address the need for both start-up and established companies to get full productivity from their accounting and bookkeeping systems, providing QuickBooks counseling, consulting, integration and bookkeeping services.


Sarah Gardiner

All stories by: Sarah Gardiner