The Top 5 Accounting Challenges and How ERP Software Can Help

The Top 5 Accounting Challenges and How ERP Software Can Help

A recent news story out of New York reveals how challenging accounting can be in a fast-moving business. A retailer had extended factory rebates to customers and charged them sales tax on the discounted price. That was a no-no, according to New York State tax authorities, which now wants to collect millions of dollars in sales taxes. It’s unknown whether this retailer was doing this deliberately, but any accounting could see this case and wonder if it weren’t the result of a simple tax configuration mistake in the accounting system.

Accounting is a more stressful occupation than most people would suspect. However much money your company has, it never seems to be quite enough. Taxes are a nightmare. Unexpected bills arrive in the mail. You have to manage a team that the CEO always seems to feel like cutting. Here are some of the most pressing challenges facing corporate accounting and ways that ERP software can help in addressing them. Today’s ERP solutions, such as Acumatica, combine accounting and financial management with deep operational management and data analysis tools.

1) Cash Flow

Virtually all businesses are chasing cash. Payables invariably outstrip receivables. The accounting department must be highly adept at juggling payments and knowing when cash is coming in and when it’s supposed to go out. Acumatica ERP helps with this need with extensive cash management features. These include control over day-to-day transactions and real time awareness of cash balances and funds transfer. It also incorporates petty cash management, remittance and payment instructions, multi-currency support and a cash audit trail into its functionality.

2) Taxes

As the retailer example above shows, taxes can be a big headache in corporate accounting. Tax problems can even expose the company to legal liability. Taxing authorities don’t mess around. Tax management in Acumatica supports centralized tax configuration, tax management and reporting. It streamlines and automates tax management processes in a centralized application. Features include tax transaction drill-down, flexible reporting, integration with sales tax rate and compliance automation and direct tax adjustments.

3) Payroll

Payroll is a well-known struggle for businesses, even large ones. Acumatica Payroll Management, which was developed by InfinityHR, integrates the ERP with employee data. This enables you to handle all your company’s payroll functions. It automates payroll and integrates payroll, where needed, with other platforms, such as HR management.

4) Unforeseen Expenses

Every accounting manager knows the dreaded feeling of discovering an unexpected invoice in the mail or email. What experienced accounting people will tell you, though, is that an unforeseen expense is almost always the result of a failure in process and controls. For example, if your accounting policy does not require an approved purchase order (PO) before spending company money, you’re going to get those little surprises pretty often. However, even if you have such a PO policy, you still need the systemic tools to enforce it. ERP addresses this need by establishing strong but flexible controls over purchasing and vendor setup.

5) Intercompany Accounting

Accounting managers frequently have to deal with managing the books and finances or multiple companies—which are often divisions of a single parent entity. Intercompany accounting is not particularly difficult, but it’s time-consuming without the right software. Acumatica speeds things up by simplifying the process of tracking intercompany transactions and transfers. Related corporate entities can share charts of accounts, currencies, calendars and so forth

We have worked with many clients on the implementation of ERP to improve accounting practices while making the accounting workload more efficient for the accounting team to manage. To learn more, or to see a demo of Acumatica’s accounting capabilities, contact us today!

Is it time to replace your current accounting software? Find out in our article Want to Replace Your Accounting Software?

Want to Replace Your Accounting Software?

Want to Replace Your Accounting Software?

Microsoft just published a very useful paper called The business owner’s guide for replacing accounting software. It starts with a sobering statistic: “More than 90 percent of consumers said they would consider taking their business elsewhere rather than work with a company that uses outdated technology.” (Microsoft Research) Wow… Perhaps it’s time to replace your accounting software. The paper explores why this might be a wise move.

Overview: Keeping Pace with Evolving Customer Demands

Why would 9 out of 10 customers defect if they felt a company’s technology was obsolete? According to the paper, customer needs and expectations are evolving. They expect your technology to evolve with them. This usually requires modern software, which can do things like:

  • Connect your business and your people in new ways
  • Automatically bring systems and processes together so your people don’t have to
  • Provide a complete picture from across your business, with comprehensive reporting

How to Know if Your Accounting Software is Putting Your Business at Risk

Microsoft suggests looking at your business and trying to spot signs that your accounting software is putting your business at risk. For example:

  • Wasting time dealing with multiple systems that can’t communicate with each other
  • Relying on error-prone manual processes that can’t keep up with demand even when you add headcount
  • Finding report creation overly complicated, and ending up with reports that don’t provide the right information

The paper also highlights the risk of customer dissatisfaction and lost sales that can arise from having incomplete or incorrect information about orders. Other signs that your accounting system is affecting your business include struggling with increasingly stringent compliance and security concerns and losing productivity switching between multiple, disconnected applications.

Finding the Right Solution

The paper presented data on how businesses can benefit from adopting modern accounting software. For example, it revealed research from the Boston Consulting Group explaining that 45% of business said their employees got more done in the same time using cloud and mobile technology. In addition, 47% of business said technology is critical to their companies’ futures. Their conclusion: Move accounting software to the cloud.

With a solution like Microsoft Dynamics 365 Business Central, a company gets comprehensive integration. It becomes possible to deploy one solution to manage your financials as well as sales, service and operations—along with payroll, CRM and banking apps. A cloud-based accounting solution like Dynamics 365 Business Central also enables managers to connect their entire business. It automatically pulls systems and processes together.

Modern accounting software like this automates and secures business processes. In addition to improved security, the results include higher rates of productivity, better audit trails and flexible workflows. Centralized data and enhanced reporting capabilities offer an end-to-end view of the business. Working with better data and reporting gives you the ability to spot trends, prevent issues, and deliver great customer experiences.

Dynamics 365 Business Central also offers a number of industry-specific extensions. These are available through Microsoft’s AppSource marketplace.

To get your copy of the paper, click here.