The CFO'S Perspective

How to Improve Your Accounting Software System Capabilities


All organizations, both for-profit and nonprofit, use accounting software. All have varying degrees of complexity and features. Regardless of the available features, most of us still rely on exporting data into a spreadsheet to improve adjustability. In fact, most of us over-rely on this process. There are better ways to improve your accounting software capabilities.

Not Having the Right Accounting Software Solution Can be Costly

Since money matters are the number one reason that small businesses fail in the U.S., it follows that not having proper insight into your company's financial health could be costly. An accounting system is how a business tracks receivables and expenditures and plans its operating budget.

Failure to have the right accounting software system in place can spell financial disaster for your business on several fronts.

  • Accounts Payable. If you aren't employing an effective accounting solution, you might miss paying some important bills. When this happens, insurance coverage can lapse, supply deliveries can be canceled, and utilities can be turned off. This is no way to run a business.

  • Accounts Receivable. Without the right accounting reporting system in place, bills owed to your business might be paid late or not at all. This can create a serious cash flow squeeze and put your company in financial jeopardy.

  • Tax Preparation. Regardless of how you handle tax preparation (in-house or through a trusted partner), you need accurate and detailed financial record keeping to ensure you remain in compliance and free from potential fines and penalties.

  • Budget Planning. Successful businesses get that way by carefully planning their budgets and using financial reporting systems to stay on track. If you aren't getting the information you need, you might overestimate earnings or underestimate costs.

  • Financial Fraud. Without the right accounting system in place, your company will have a hard time noticing if it is being defrauded financially. This can come from internal embezzlement or outside entities that take advantage of lax accounting procedures.

Common Issues and Solutions with Accounting Software

You might believe that you can solve all of these problems by investing in an accounting software solution, but these aren't all created equal. Some of the common issues that you could run into with an accounting system are:

  • Dashboards aren’t available (or they aren't the right ones)
  • Pre-built reports that don't tell you what you need to know
  • Formatting isn't right. Either the font is too small, reports don't fit on one page, or they just look bad overall.
  • Expensive hardware or software upgrades required to keep the system working.
  • No integration with other systems or departments.
  • Output that is inaccurate despite accurate input (yes, this happens).

A common solution employed with accounting software systems is to export all data to a spreadsheet. This allows you to combine two or more reports into one and tweak the formatting to suit your needs. But this isn't the perfect answer when it comes to working with large amounts of financial data. Some of the risks associated with this approach include:

  • It's not sustainable to do this month after month.
  • It's time-consuming.
  • Errors can happen.
  • Sometimes numbers are adjusted (either intentionally or not).

Even though many businesses, large and small, still use spreadsheet solutions, this can be a costly choice. Spreadsheets aren’t the best option when it comes to keeping track of figures that will impact your business.

Consider what happened with the 2012 London Olympics, where a single input error by a staff member resulted in double the number of tickets being sold to a swimming event than the venue could hold. That same year, J.P. Morgan Chase reported that it lost over $2 billion due to a spreadsheet error. One simple miscalculation led to errors in other calculations, and the company's financial losses continued to pile up.

While these are two extreme examples and your company may not lose billions, the reasons to avoid spreadsheets for financial management are the same.


  • Can't accurately predict cash flow
  • Can be error-prone (see above), and these errors can be compounding (see above)
  • Aren’t a secure solution
  • Aren’t intended for sharing and sharing invites security issues
  • Are not that easy or intuitive to use
  • Aren’t free considering the extra hours spent manipulating data

Improving Your Accounting Software System Reporting

So, spreadsheets are a poor choice, but what's the alternative? There are several. You can use a program that "overlays" on top of your accounting software to generate the reports you need, or you can upgrade your accounting software to a more robust system.

Either option has some hurdles. It will take some time to locate the right solution. Then, there will be an additional time investment to set up and learn the new solution. Finally, it will take even more time to implement the new accounting solution.

This sounds tedious and potentially costly, but it's worth it! You'll have new tools at your fingertips that will provide your company with the insights it needs to successfully run and grow the business. You'll also gain:

  • The right reports at the right time
  • Useful and customizable dashboards
  • Efficient workflows
  • A scalable solution
  • Improved internal controls

And you will be able to eliminate:

  • Duplicate data entry
  • Costly hardware if you choose a cloud-based solution
  • Time-consuming and frustrating spreadsheet work

It Makes Sense to Find and Implement the Right Solution

If your business decides that it's time to invest in a better accounting solution, what are the next steps? Since there are many options, you'll want to take a systematic approach to finding the best accounting software for your needs. This will be one that delivers the insights you need in the most intelligible format.

Shopping for accounting software isn't easy. The solution you choose must be the right size for your business, and you'll need to feel secure that you're getting the support you need from the developer when it comes to updates and addressing bugs. You'll learn a lot about these systems in your search, but some of the things to consider when looking for the best accounting solution include:

  • Match the software functionality to the way your organization does business. First and foremost, analyze your needs and consider the way you do business. How many employees will use the system? Can you get by with an off-the-shelf system like QuickBooks or do you need a more robust system that allows for customizable reports such as Sage Intacct? Beyond this, what features come standard, such as bank reconciliation, tax management, and payroll management?

  • Determine your cost parameters. Price should not be the sole determining factor, and it's important to understand that making cost comparisons can be difficult. This is because some packages include functions and modules as standard while others charge for them as add-ons.

  • Pay attention to add-on features. When searching for an accounting solution, pay close attention to what is included versus what is offered as an add-on. There may be some features that will be more useful to your business and others you simply won't use. These might include POS integration, remote access capability, and inventory tracking.

  • Involve your financial team in the decision. The best plan of action is to form a small committee that deals with establishing parameters and reviewing the differing solutions.

  • Think long-term. This isn't a process that you want to repeat every few years, so it's vital that you find a solution that will grow with you. In other words, it's scalable.

Very often organizations hoping to gain the benefits of implementing a new solution feel they can't. "It will take too much time." "The finance team is already stretched too thin." "Our team either lacks maturity or isn't tech savvy." If this applies to you, we can help - contact us here.

Whatever path you take to improve your accounting software, taking action should be a priority. Your organization will benefit from improving your accounting software systems. Reducing errors in the financial system and increasing the amount of time available to analyze the data will lead to improved organizational success.

About the Author

nancy-smithNancy Smith is a high capacity financial manager with success in a wide variety of settings in both the nonprofit and for-profit sectors.  She is passionate about engineering process improvement and navigating transitions, resulting in sustainable efficiencies and cost savings.  In addition to core accounting competencies, she is experienced at managing other support functions such as IT, Human Resources, and Operations.

Nancy has directed the accounting and finance functions of multiple organizations as a full-time employee and as a consultant.  As Chief Financial Officer of World Relief, a $45M international relief and development organization, she led the integration of two finance departments  and provided increased visibility and accountability of program operations through improving financial models and analysis. Most recently, she was Director of Accounting at the Evangelical Free Church of America where she acted as controller for a combined $40M budget of the denomination, its US and international programs, and its charitable foundation.  Nancy began her career as the Accounting Manager for C&C Paints, and has also worked in public accounting at Ernst and Young, where she directed and participated in consulting projects for telecommunications companies and trade associations.

Nancy is a licensed as a CPA in Washington state.  She holds an MBA in Finance/MIS from the University of Washington and a BA in Business from Seattle Pacific University.


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Topics: Accounting Software, Accounting System

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