Intacct Practice Management

Accounting Software — When Is it Time to Change?

Written by David Furth

It is not surprising that applications like QuickBooks have millions of users. Most founders, when they are getting started, are simply looking for an easy and inexpensive way to get their vendors paid, send invoices to their customers, and prepare a simple P&L at the end of the month or quarter. And even well-funded start-ups, with aggressive growth plans and experienced investors, often start with applications like QuickBooks, as they appear to meet their needs.

But when things get going, these basic systems can inhibit growth. After helping hundreds of companiesIntacct convert from applications like QuickBooks to a robust, cloud accounting solution like Intacct, we can share some of the indications that it is time to change:

  • It takes lot of time to organize data and analyze information in spreadsheets. This could include getting a handle on profitability by customer, product, or location; tracking subscription agreements and the associated revenue recognition; or consolidating results across multiple entities and/or across multiple currencies.
  • It takes more than five days to get invoices out. This could be due to difficulty with activities like collecting time sheets from consultants or field reports from service personnel, or lack of integration between your sales order and accounting applications.
  • You need to meet more stringent audit requirements. This could include needing better controls (e.g. segregation of duties) as you prepare for a funding/liquidity event or having a proven method for recognizing revenue given the new guidance associated with ASC 606.
  • Executives and managers rely on you and your team to access both financial and operational performance metrics and preparing these reports is extremely time consuming. This could be due to the limited tracking and reporting capabilities of the existing application or lack of integration with other third-party applications.
  • System performance is being impacted by the volume of information being tracked. This is likely due to limitations in your current accounting solution to support the increased transactional activity of a quickly growing company.

 If you are experiencing these or similar issues, you are not alone. The good news is that there are excellent applications out there that tackle these issues head on. But you must be prepared to invest. While you can expect a typical payback within the first year — depending on your requirements — you should expect to pay no less than $5,000/year for a more robust, cloud accounting solution, with an average cost ranging between $20,000 – $30,000/year. Larger, organizations with more complex requirements could pay as much as $50,000 – $100,000/year. In addition, these larger systems will require more traditional ERP implementation — with requirements planning/design, configuration, testing, and roll-out.

Switching to a robust accounting system like Intacct can make a big difference in your accounting operations. The chart below shows how companies are benefiting by streamlining processes in month-end closes, consolidated and multi-entry management, and revenue management, among others.

 

Intacct

In the next post, I will discuss some best practices for determining which accounting solution will best support your long-term plans.


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About the author

David Furth

David Furth is President and Co-founder of Leap the Pond.
David has spent the majority of his career working at the intersection of technology and business, working with companies on process improvement and software implementations in accounting, budgeting and forecasting, procurement, and supply base management. He has provided strategic guidance to founders and CEOs – consulting to companies, ranging from early stage and angel funded start-ups, to established market leaders.
As President of Leap the Pond, David is responsible for overall company operations and leads the marketing and sales functions. David holds an MBA from NYU’s Stern School of Business and B.S. in Civil Engineering from Lafayette College.
Contact David at dfurth@leapthepond.com or 1 (203) 361-9200 or join the conversation on Twitter or LinkedIn.

4 Comments

  • In our experience, your 5th point (transaction volume) seems to be the biggest real driver in upgrading beyond QuickBooks.

    One of the key items we see people wrestling with when they believe they need to upgrade is lack of strong internal business processes and controls. A more robust accounting system doesn’t solve these issues. It can, however, exacerbate the issues and make them more costly until they are fixed. I believe these folks need to work with a process consultant before they consider upgrading their accounting system.

    We’ve had the chance to work with really sharp CFOs that remain on QuickBooks much longer than they’ve been told they could, but they’re still chugging along quite profitably. Many of these folks use QuickBooks as a data entry tool. Once the data is entered, a lot can be done with that data.

  • “you should expect to pay no less than $5,000/year for a more robust, cloud accounting solution, with an average cost ranging between $20,000 – $30,000/year.”

    I think this sums up the challenge, for many small businesses it’s a catch 22. The software that would help their business grow enough to afford such an extra expenditure above and beyond QB/Xero, is the software that’s too expensive to afford. So they get stuck with substandard and inefficient accounting packages.

    Not saying this is always the case, obviously some businesses manage to take the leap.

    The only hope I see of this changing is Microsoft Dynamics 365, which isn’t there yet, but could end up being a real accounting solution that falls in between QB/xero and the prices you mentioned.

    BTW, I’d love to look at Intacct. But every time I go there and look at the endless add-on modules, I know by the time we added in what we’d need to justify the change, it’ll be in the stratosphere as far as our budget goes.

  • I appreciate the comments. Somewhere around 50% of our customers are migrating from QuickBooks. While the cost is higher, in all cases, there is a compelling value proposition that more than warrants the additional costs – some included in the original post. Our goal is to help any company struggling with its existing accounting software to see if moving to a new solution will bring demonstrated improvement.

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