When your financial system reaches the end of its lifespan and is no longer providing the value you need, it can disrupt your entire financial and business operations. Given this, it makes sense to address the functionality of your system before it gets to the breaking point. But, how do you know when it’s time for a new or upgraded system, and what should you do about it?
It’s already too late when your financial system no longer serves the current or future needs of your organization and stands in the way of operations. In short, it’s when your system no longer supports the needs of your business and is unable to adapt to change.
Here are eight tell-tale signs that indicate it’s time to upgrade or change your financial system:
- Your on-premise system is nearing the end of its lifecycle
Many companies are still using local, on-premise solutions, which no longer will be upgraded with new functionality. Some providers are even ending support for these systems entirely, leaving you with obsolete security features, which create a significant risk to the continuity of your financial administration. Instead, consider a cloud-based financial system provided by a supplier that is responsible for continuous development and updating. That way you can be assured of the viability and continuity of your system well into the future.
- The availability of your system is poor
No one should have to waste their time with hard-to-use, slow systems. Alarm bells should go off if it is difficult to log in to your system, it takes too long or is too complex to complete tasks, or if it continually interrupts you with inquiries and support requests. In a future-proof system, usability is at the heart of everything. Thanks to web and mobile user interfaces, you should be able to use these systems any time you need to, regardless of when or where. Interfaces should be so intuitive that no instructions are needed, and information should be easy to find, visualize and analyze. Also, importing and exporting data to office software such as Excel should be straightforward.
- Your systems do not work together
While your financial management system might have the capability to manage accounting and ledgers, that is not enough in today’s digital financial environment. Your financial management system is the core of all your business systems, which need to be able to transfer information to it automatically and in real time. Unfortunately, many systems don’t have this capability, leaving business applications siloed and unable to interact with each other.
Without effective integration, financial information will not be up-to-date, and you will not be able to provide decision-makers with the accurate and enriched data that they need. However, a modern financial management system serves as a hub of enterprise-wide financial information, and is able to work seamlessly with other systems. It includes functional interfaces enabling different systems and services to continually share and update data.
- Your system does not support the collection and utilization of decision-making data
The value of financial management is largely based on the usefulness and timeliness of the information it produces. If, due to deficiencies in the way it structures accounting data, the financial system cannot access the level of detail needed by the business decision-makers, or if data storage is limited due to lack of automation and integrations, financial management may only be able to meet external, mandatory requirements, but not internal needs. Look for a modern financial system that supports data collection and utilization through powerful interfaces, process automation, flexible computing structures, and built-in analysis tools.
- Your system is not scalable
Just as a child can grow out of his/her clothes, a company can grow out of its systems as it evolves. The system might not be able to manage increased transaction volumes effectively, requiring more manual work or result in a slowdown in system operations. Additionally, the system might not be able to provide support for the functionalities that advanced businesses and their business models require.
Fortunately, a modern financial management system can easily accommodate growth spurts. Future-proof financial systems are provided through a cloud-based service that scales as volumes grow and provides new functionalities to adapt to changes in the business.
- Your system does not support changes in your business model or M&As
The worst-case scenario is your legacy financial system impedes the growth of your business. A rigid system can slow the business down by making change difficult and time-consuming, or for example, even preventing you from adding a new company to the system. Finance departments need a modern financial system that easily facilitates changes, and at its best, allows an administrator to make these changes using parameters included in the system. New business applications can be quickly integrated into the financial system, and accounting structures would allow for flexible updates to financial monitoring models and reports.
- Your system does not support automation
If the financial system does not support automation, routine tasks will bog down your staff members. They will not have adequate time to support the business, nor to produce analytics that can support decision making. Look for a modern system that automates financial administration tasks with, for example, timely processing speed, efficient subscriptions and automated subscription control, as well as rule-based workflows. And as a cherry on top, artificial intelligence should be built into future-proof the financial system as well as predict and suggest user actions, such as coding invoices.
- The limitations of the financial management system prevent it from serving the needs of your organization
As a result of the constraints of your financial system, it can become impossible for your team to meet the needs of business management. A future-proof financial system can help take financial management to a higher level of service by freeing up time needed for routine tasks, supporting an organization’s workflow with ease, and generating useful financial data to support decision-making. This will enable your team to increase its value to the organization as a critical business partner.
Now, it's time for you to consider - does one or more of the above situations relate to your current financial system? If they do, it’s time to seriously consider replacing, renewing, or at least upgrading your system. A modern financial system will support a strong financial management team. Once it’s in place, the possibilities are endless, from automation that handles routine tasks to analytics that support decision-making and elevate the role of finance, and its strategic significance to the overall organization.
- Your on-premise system is nearing the end of its lifecycle