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Moving To An Enterprise-Level Accounting System

By February 2022August 14th, 2022No Comments
Moving To An Enterprise-level Accounting System

Once your company leaves the “small business” category and becomes a fully-fledged medium-sized enterprise, its needs have evolved so fundamentally that the old tech solutions you were using will no longer suffice. Where do you go from here?

When your annual turnover reaches around €20 million, it’s extremely likely that you will have outgrown accounting solutions like Xero. The company’s needs will be exponentially more diverse and complex, in the area of accounting specifically you may need to handle:

  • Staff scheduling
  • Lots of rechargeable costs
  • Complex invoicing and POS
  • Multiple companies
  • Complex stock and warehousing
  • Miltiple revenue streams
  • Multi- jurisdiction VAT and payroll

If it gets to the point that Xero’s functionality is no longer meeting your needs and expectations, the time has come to migrate to enterprise-level systems. But it’s not just a case of swapping Xero for an alternative, because at this level the solutions are likely to be part of a bigger software suite known as enterprise resource planning (ERP).

ERPs handle main business processes, which could include capability for financials, supply chain, operations, commerce, reporting, manufacturing, procurement, inventory, order management, project management, logistics, product lifecycle management, risk management, enterprise performance management (EPM), human resource activities, and customer relationship management (CRM).

ERPs are often embedded with next-generation technologies, such as the internet of things (IoT), blockchain, artificial intelligence (AI), machine learning, and digital assistants. Because you can integrate multiple business functions in one place, it’s possible to simplify your internal process and have access to powerful, real-time business intelligence.

ERPs make real integration and collaboration possible

Back in 1991, Harvard Business Review published an article by Regis McKenna that is still quoted in his industry today. He made the case that marketing was not solely the concern of the marketing department, “Marketing today is not a function; it is a way of doing business. Marketing is not a new ad campaign or this month’s promotion. Marketing has to be all-pervasive, part of everyone’s job description…”

I think we can make a similar assertion about the accounting function. In a modern, technology-enabled business, it’s very unwise to leave financial data siloed in the accounting software. When the finance function is integrated into the rest of your business activities, you can have advanced reporting that uses data from multiple departments or functions, allowing you to make smarter, more informed decisions. Once you make the move to enterprise-level systems, you have the option of using applications from within one suite so that both processes AND data are consolidated.

In the same way, senior finance colleagues – whether internal or outsourced – should have input into all substantive company decisions (not just those labelled “accounting”) and senior management (not just those with “finance” in their job title) should all be upskilled to understand financial data, such as monthly management accounting reports. This is how you build a company where decisions are pragmatic and data-based.

Enterprise-level accounting systems

When it comes to financials specifically, the top names we see used in Irish companies are NetSuite ERP (from Oracle), SAP Business One, and Dynamics 365 Business Central (from Microsoft) – previously called Dynamics NAV. There are many others though, including enterprise offerings from Sage and QuickBooks.

What you get with an enterprise-level system is much more customisation, allowing you to meet the unique requirements, rules, and procedures of your company.

There is some convergence here. While ‘small business’ and ‘enterprise’ used to be very different categories for software, solutions like Xero are capable of much more capacity and complexity than they were 10 years ago. Similarly, the enterprise-level solutions now have slimmed-down product offerings that almost meet small business needs. So, while these categories haven’t quite met in the middle, they are approaching each other.

What you get with an enterprise-level system is much more customisation, allowing you to meet the unique requirements, rules, and procedures of your company. Whether you buy direct from the company, or through a reseller, you can expect a fair amount of handholding through implementation and great customer support once you are up and running.

The benefits of enterprise-level accounting systems

Your company may be at the stage of needing an enterprise-level solution if you are lacking some of these benefits:

  • Scalable and more robust software
  • Customisable automation based on your own workflows
  • Drill down by division, entity, department, etc.
  • Move data into other areas of the business without duplication
  • Fully customised business intelligence dashboards and reporting
  • Tight control of user permissions
  • Meet compliance and audit requirements
  • Multi-currency, multi-company, and inter-company control
  • Predict and model without ever opening a spreadsheet

On the negative side, some people feel the user experience on enterprise-level systems isn’t what they are expecting. Products like Xero are refreshingly quick and flexible, whereas enterprise systems can be quite clunky and slower to work with because there are more rules and structure. I think this is simply the nature of these systems, as scale and complexity require more rigidity.

Making the move to enterprise-level systems

If your business has outgrown the SME offering, it’s time to make a plan for moving to enterprise level. I do recommend you have a plan in place, because selecting, implementing, and adopting software of this type shouldn’t be a spur of the moment decision.

You need to put some investment behind your accounting technology; I think a realistic budget at this point would be around €50,000, possibly more. A large chunk of this budget will go towards consultants, who will come in and customise the system for your needs. At this level, it’s important to have the technology tailored properly so that it is properly integrated and set up.

If you feel that your technology suite isn’t delivering anymore, it may be time to ask us to look at your requirements and assess the solutions in the market. If an enterprise-level solution is the answer, we can introduce you to Ireland-based experts for integration and training. Contact us to find out more.
Rory