More Big Red Flags That Show Your Accounting System is Hurting Your Business

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Posted by: briansittley Comments: 0 0 Post Date: August 22, 2017

In our prior post we began listing some of the red flags, incidents culled from real-life incidents as noted in a white paper from Tribridge, which hurt businesses in multiple ways.  As it turns out, there are a lot of them, so we’re adding a few more here to round out a two-part post.  The original document can be found here.
Continuing our list of issues we often see clients wrestle with – and waste TONS of time and money on – here are a few more that can be remedied by taking the plunge and finally updating that old, tired accounting system to one of today’s new offerings.

  1. Errors tracking time and equipment. Paper based tracking systems invariably lead to mistakes, but when those mistakes show up in somebody’s paycheck as the result of mistaken record keeping, things can get a bit testy.  Multiple teams performing manual time entry on paper sheets is one such recipe.  Not to mention a lack of insight into T&M performance (since it’s all written down instead of inside the computer).  Today’s modern systems provide web-based data collection opportunities for remote employees.  These can feed payroll – or a payroll service – and later provide all the reporting a company needs to track and manage its service performance.
  2. Document delays that slow month-end close. We see it all the time: companies that can’t close their books within a couple days of month-end.   (Some can’t do it within a couple months!)  While there are a host of causes, most have to do with manual processing of various sorts, often coupled with high transaction volumes and multiple silos of unconnected information. An ERP system is built to manage and consolidate exactly this type of month-end chaos.
  3. Service and warranty confusion. Service management software, often built piecemeal a decade or two ago and with few links to accounting, can cause delays to service work, lack of up to date inventory information and poor warranty tracking that makes tech’s lives difficult.  A fully integrated modern system utilizing tablets in the field can record service work, material consumption and keep warranty information up to date.  Orders can be placed and managed, and inventory and assets can be tracked accurately and almost instantly.
  4. Inaccurate inventory levels. Whether you’re in retail, wholesale or manufacturing, inventory counts.  Errors in counts, lack of consistent cycle counting, month-end closing complications, difficulty with counting bulk-weight items (like nuts and bolts), and no inventory into warehouse moves or inter-store transactions are but a few of the ways that inventory can become inaccurate, or worse.
  5. Unsupported inventory practices. A lot of older systems do not support all the recognized inventory accounting and costing practices (like LIFO, FIFO or Standard) or, if they do, they are often awkwardly implemented and difficult to use.  This can lead to using spreadsheets to manage inventory.  But manufacturers need to be flexible enough to manage processes unique to their particular build-to-order or build-to-stock or engineer-to-order requirements.   Today’s newer systems allow for better synchronization of build-to-order and –stock situations, and allow for a choice of costing systems (typically Standard, Average, LIFO and FIFO) which, with careful management and implementation, can better match up with manufacturers’ exact requirements.

Time and space prohibit us from sharing even more red flags.  Suffice it to say that if even a few of these issues are yours or sound familiar, it may be time for you to start your search.  The answers lie in today’s advanced, sophisticated, and yet very cost effective new ERP systems.
 
 

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