Technology and computer solutions may be changing day by day, but you can’t really say that about accounting: a debit is still a debit and a credit, a credit. However, no company can prosper and survive if its finances are not in order.
To make the right decisions at the right time, you need access to real time information on how your business is doing. If you don’t compare your actuals against your forecasts regularly, how are you going to be able to move forward? You have to measure yourself to be able to improve!
Spending a certain number of hours every month in Excel to “extract” financial information is not enough. You should be spending your time analyzing the figures, not preparing them.
Not having all your financial information in one place generates sizable hidden costs in terms of both labor and response time.
A recent study conducted by Sage Software over the past 3 years shows that the accounting team in an SME spends only 13.6% of its time working on high value added financial tasks. Most of the team’s work (86.4%) is considered low value, including a large part (44%) spent entering and manipulating data (usually in Excel). The rest is distributed between responsibilities such as “fire chief”, “librarian”, “communications assistant” and “other related tasks”. The same study shows that an average sized SME has about 4 employees who work on accounting, equivalent to an annual cost of $200,000 in wages and benefits. So, the time a SME’s accounting team spends “elsewhere” may add up to $173,000 a year.
Unfortunately, all that time spent gathering information from a variety of isolated systems (44% of the time) is no guarantee that the data are accurate, since it’s a well-known fact that people tend to make mistakes when entering a lot of numbers. That makes it a challenge to share the information among the various departments.
So what’s a SME to do?
Integrate all of the company’s aspects into a single solution, an integrated enterprise requirements planning (ERP) solution. No more re-entering, manipulating and checking data. Access the information in real time and learn new ways of improving yourself.
Having full control over finances can give you a competitive edge and is certainly one of the benefits of using an ERP solution (think of St-Hubert, which was recently sold for a very good price because of the excellent state of its finances).
Finances are nothing to sneeze at, they’re important and help you reach the goals you set out for yourself!