How to Know When You've Outgrown Accounting Software

How to Know When You've Outgrown Accounting Software

In a recent JCurve Solutions webinar, special guest Inbal Steinberg, an independent consultant from Convertworx, and JCurve Solutions' Partner Manager, Andrew Tolhurst, provided insights into outgrowing accounting software.

Read on for the transcript and video below with more information about how to support your continued business growth and the next steps to taking action.

Learn about the warning signs to look out for, and what you can do when you've reached the limits of your accounting system.

Play the video webinar or read on for the full transcript.


Andrew Tolhurst:          Okay, thank you everyone for joining us today. We're here today to talk about how you're outgrowing your accounting systems. Today I'm joined by Inbal Steinberg. Myself, my name's Andy Tolhurst. I'm the partner manager here at JCurve Solutions and work with our strategic partners, whether it be accountants, business advisors or our product partners. Today though, I'm joined by Inbal Steinberg who is an independent consultant from Convertworx, based in Melbourne.

Andrew Tolhurst:          Now Inbal has a vast amount of experience and has worked on multiple projects across the country. For the last 25 years she's been working within the technology space, originally with computer programming but over the last seven years, has really been working with businesses to make sure they're implementing the right system, whether it be a current one or one coming into the market.

Andrew Tolhurst:          So, recently I actually caught with Inbal at the accounting expo up in Sydney where she did a very exciting piece on AI and the future is coming, I guess, in a way. So, Inbal, thank you for joining us.

Inbal Steinberg:            Thank you Andrew.

Andrew Tolhurst:          So, our agenda today will focus on the signs that you're outgrowing your accounting only software. The first sign we will look at is capacity issues affecting reporting. The second one is why you are working outside your accounting system. The third one, the issues with dealing with a complex ecosystem of solutions.

Andrew Tolhurst:          We'll then ask Inbal on how we support future growth and push past these issues for a business moving forward and finally we'll have that Q&A section where you guys can ask the questions that you need answers to after we've presented the webinar today.

Andrew Tolhurst:          So, capacity issues. Inbal, I hear this all the time from different businesses. We're having capacity issues which is affecting our reporting, but what does that look like for businesses? I mean, at the end of the day, does the system simply just shut down or do we have a slow down in the system processing?

Inbal Steinberg:            So, what you'll see Andrew, what I see when businesses talk to me about the capacity issues with their accounting only systems, or cloud accounting only systems, is that you actually start seeing a slow down in the system. There's no license issue. It's not that you're only allowed to enter 1,000 invoices, or something like that. It's just that you'll start seeing your system slow down and you'll see it primarily in reporting.

Andrew Tolhurst:          What do those limitations, how do they affect the reports? So, they affect the critical reports that we need to see day in day out?

Inbal Steinberg:            Yes, so what will happen is that you'll sign off the reports like your BAS report which is pretty critical can start slowing down. They just take time to load but at some point, even that we're working on a browser they'll slow down to the extent that the report will just time out. If the report times out that means you just can't access your data. You just can't get your BAS done, for example, or your general letter report which your accountant really needs.

Inbal Steinberg:            What I see business do is initially they'll email support and go, my BAS is timing out, I can't run it. We look at that. We'll let them know that it's a capacity issue. Often I see that support will initially run the report for you. They know it's critical so they run it for you and send it to you or email the report to you but after a few periods, either on monthly or quarterly, they'll just let you know that that's it. That they can't do it for you and you have to find another solution.

Andrew Tolhurst:          Is the capacity limitations the same across all solutions or do they differ?

Inbal Steinberg:            They're not the same across all solutions and it's very hard to know. So, Xero for example, they publish their capacity limitations. So, they advise that you should use Xero for around 1,000 invoices and 1,000 bills per month. I think it was still something like five to ten lines per invoice because what really matters is not the number of invoices, it's the number of invoice lines that need to go into the BAS report.

Inbal Steinberg:            QuickBooks online, for example, Xero also mention around 2,000 bank statement lines. QuickBooks online, for example, they don't advertise or publish their capacity limitations. They say they're not limited but they're pretty young - like MYOB's online versions. So, personally I haven't seen an implementation that has tens of thousands of lines a month that works well.

Andrew Tolhurst:          Okay.

Inbal Steinberg:            So, I don't know.

Andrew Tolhurst:          Will we know?

Inbal Steinberg:            We will. I think we will. I think we'll either start seeing scenarios where ... with Xero, for example, I'm seeing scenarios and I see scenarios every week that businesses outgrow the capacity. I get phone calls from people saying, "It doesn't work. The report's stopped. Support told me they can't help me. What can I do?"

Inbal Steinberg:            It will start happening with the others at some point as well or we will see people using these systems with tens of thousands or hundreds of thousands of transaction lines per month successfully.

Inbal Steinberg:            One of the interesting points there is that we know that these systems are designed for small businesses but it's a very interesting question of what a small business is because you can be selling high end cars for 200,000 dollars each and you'll sell ten of them a month and that's a small business or big business? I don't know but you could be selling pens online on eCommerce site and sell 100 or 500 a day. Is that a small business? It's about the number of transactions.

Andrew Tolhurst:          That's a good question and a good definition there as well. I mean, I think that leads us into our next issue in terms of working outside the system. So, a lot of businesses that come to us we find are working on an accounting only system and using lots of spreadsheets. What are some of the issues that you come across in businesses who are using their solutions and systems this way?

Inbal Steinberg:            Now that's a really interesting sign. It's the other sign that I look for when I look at a business and I try to understand if their systems are right for them or if they need to consider changes, and that's when I see that people work outside or around their accounting system. I'll see them either extracting information and manipulate it in Excel or I'll see them working in Excel and then pushing the information into the accounting system and that sort of raises those little alarm bells that say something's wrong here. There's a lot of manual work happening around your accounting system.

Andrew Tolhurst:          So, these large movements of data exportation, is that because the accounting system is not doing something for their business?

Inbal Steinberg:            Yeah, it would be things like reports. It would be things like management reports or reporting by data that the accounting system doesn't have. For example, some of them have limitations around customer hierarchy and relationships between customers. So, if they want to look at their P&L and analyse it by type of customer, type of product, customer group, product hierarchy, all sorts of different aspects of their business, they will usually just take the data out into Excel or another system and manipulate it there.

Inbal Steinberg:            The other side would be the same thing. If the system doesn't understand your complex customer hierarchy, for example, or customer relationship, that you have customers where you need to invoice ahead of this or invoice the customers individually. What ends up happening is that they'll get their invoice information, manipulate it in Excel in order to invoice the correct customer, pack their head office or the individual or whatever, manipulate the figures. Maybe calculate commissions for sales people. All sort of functions that the accounting system doesn't do and then they give the information into the accounting system just to handle their financials, their GST and their data tracking.

Andrew Tolhurst:          So, other than the obvious exportation of data through Excel spreadsheets, what are the other ways that companies are currently handling this issue?

Inbal Steinberg:            Some people go and integrate business intelligence tools. Online databases that you can feed data in and run reports on or run analysis on. That would be things like Power BI (Microsoft Power BI) or Zoho Reports and there's others. The all good. They're all different but they're all good. People do that for I think, two reasons. One is that you have a lot more power there in generating exactly the reports that you need. Very visual and you can drill down and all of that. You can schedule reports, automate. You can get a lot of automation. The other thing is that with an accounting only system, sometimes you need to bring information from other systems together for your reporting. From your inventory or from your CRM or from another system to do a report that has information from all of them together.

Andrew Tolhurst:          I guess once again that moves really well into our next issue in terms of with dealing with that ecosystem of multiple systems. At the end of the day, if you're a business and you're using multiple systems, you've got a system for your inventory management. You've got it for your CRM, for your accounting. What are some of the issues you can run into there and basically what are the core things that you see where businesses come to you and say, hey listen, I'm getting these issues with having these multiple systems.

Inbal Steinberg:            Yeah. This Andrew, is very different. The way you look at things from JCurve where you're using an ERP system that has a lot of functionality areas in one big system. People will come from the accounting only systems environment. I'm used to thinking about an ecosystem of solutions so they'd have their accounting system really does a limited set of functions. It does your invoicing, supplier bills, it does your bank reconciliation, it does your payroll pretty much and it does it in very specific ways. It's not very customisable. What they then end up doing is the businesses have to link in other systems around it which in this world are called add-ons and that's a whole other conversation because I think they are the actually core pieces of the business.

Inbal Steinberg:            But these systems cover different aspects of the business and compliment the solution.

Andrew Tolhurst:          Okay. This is a bit of a difference point for us and then we have a single source of truth where it's all included. When it comes to this integrated environment what are the issues that pop up? If you have a core accounting platform, let's say you have a CRM connected on top of that with your inventory management, what are the core risks that you're running into with that?

Inbal Steinberg:            What you'll see is that you have your accounting and then you need inventory, maybe. So, you'll need your inventory system on the side or you'll need ... and some of them offer some limited inventory functionality but when you really need to talk about multiple warehouse, pre-ordering, back ordering, split orders, receiving and all of those different functions. Forecasting, inventory turnovers, they don't do that. So, you need an inventory system. Sometimes it's a CRM system and again, these systems, the stand alone accounting systems will have a bit of a functionality but very limited or will talk about authorisation processes. Expense authorisation or bills authorisation processes.

Inbal Steinberg:            Alerts. Time billing, project management, a lot of different aspects will come into different systems whereas with a system like yourself JCurve, it will all be in the one package.

Andrew Tolhurst:          Yeah, fantastic.

Inbal Steinberg:            And you are asking about the issues. The issues there will be if you ... I guess the two biggest areas to think about will be one, if you find that your staff has to log into different systems in order to answer a question, that's a red flag because you have a customer on the phone asking where their order is and you have to log into that system to figure out but then they want to place an order and they want to know what they ordered last time and you have to go into another system to figure that out. Then they also want to also pay one of their invoices. You have to log onto another system to do that. That's not a good productive way to work. Also, the customer feels that.

Inbal Steinberg:            So, that's one thing if we have to log into a lot of systems. The other side of things will be keeping everything synchronised. So, if I change the customer address or phone number or their preferences about something in one system, will it get updated in the other? What you'll see there is that there are integrations and using APIs, everything in theory remains in sync. So, we're talking different systems developed and supported by different companies. So, when one of them adds a function it starts handling returns in a certain way or a certain pay method and the integration is still not up to date then that information about that particular scenario will not flow through.

Inbal Steinberg:            Some information supports more information than ... one system supports more information than the other, for example, with customer relationship, it will not be reflected in the other system. It doesn't have that function.

Andrew Tolhurst:          I can imagine it's really difficult for businesses then when they're trying to make those business decisions. If they had those multiple systems not talking to each other or not recorded in each other to make a real strong decision on their business and where they want to go moving forward.

Inbal Steinberg:            It's a scenario that works really, really well when you get started because it covers the basics really well but I guess the important thing is to start noticing those red flags and start noticing that things are starting to break down which is a sign that we're outgrowing that scenario and we have to start looking at either fixing it, making it more robust or moving to something else.

Andrew Tolhurst:          Okay. Fantastic. So, if I'm a business here today, Inbal, or in general, what are the steps to go about it? What can I do as a business to move to that next stage?

Inbal Steinberg:            Well, first step is to, what I believe is the first step, is to educate yourself. So, you're stuck. You have a bit of an issue with what you know. What you know doesn't work anymore. You need to educate yourself. You need to understand what options you have and you have options. When I get a phone call like this, which I do probably two, three times every week, I go through a few steps. First I look at what you have and what's wrong, what's working well and what doesn't work. Maybe we can fix it. So, maybe there are things that we can do about the integration to make it work better. Maybe we introduce another component or maybe we can reduce components by replacing one of them. Maybe we can change how the integration works. Maybe we can do some custom development. Maybe we can make it work. That's the first thing.

Inbal Steinberg:            Then, we need to also understand what other options we have because we may not be able to fix it. If we're not able to fix it, then we have to look at other options. There can be ERP solutions. There can be industry specific solutions. There can be custom solutions that could be developed. We need to open up our options before we narrow down to a solution.

Andrew Tolhurst:          Once we have those options open, where do we go from there?

Inbal Steinberg:            Then probably the next step for me is usually to record some requirements, which is just a fancy word for bullet points on what it is that we actually need and it's important to cover what works really well because we don't want to miss out on that and we need to cover what is it that we want to achieve. What is it that is missing in our current scenario.

Inbal Steinberg:            That's really important because what you don't want to do is, yeah in your next point there - reaching out to an ERP solution especially. So, if we call JCurve and sometimes I say to people I think you need to look at JCurve. JCurve are very nice and they'll give us a free online demo but what I don't want to do is I don't want to sit there, listen to the whole sales pitch and then go, well that was very nice but I still don't know if it solves my problem.

Inbal Steinberg:            What I like doing is record a list of requirements up front. Email that to the service providers that I'm going to listen to, to get their presentations, and get them to show me exactly the scenarios that I'm interested in.

Andrew Tolhurst:          And I know we've worked with you in the past, Inbal, and that's very much what you do. We always make sure, the people that you bring to us are always the right candidates for the JCurve Solutions products because you have gone through that requirements. You've understood the business. So yeah, we've worked very closely with you in the past and we can testify for your process there.

Inbal Steinberg:            Great. Yes that's what I aim to do. Otherwise, it's just a waste of everybody's time.

Andrew Tolhurst:          Yeah, agree. Totally agree.

Andrew Tolhurst:          So, that wraps up the webinar section. I guess it's now the time for everyone who's joined us today to ask any questions that potentially they may have. So, I've received one already. Inbal, when do you think a business is typically ready for an ERP? Is there a revenue limit that you think that, when you go okay, once you hit that level it's time to move to an ERP?

Inbal Steinberg:            I think the question is more about business complexity and how it works. There's a minimum threshold obviously that you'll need to be able to have in order to be able to afford an ERP system but I don't think that there's a threshold that says well if you're that big, then you need to move to an ERP system. People have a misconception thinking that ERPs are for huge businesses. For the giants. For the banks. For the Governments. That was true ten years ago. Today there are ERP systems that can be used pretty much by any business. I don't know your specific target market, Andrew, but we'll probably looking at two million dollar turnover and over that could start using an ERP system. I don't think that they should. They should if the business complexity is such that the ERP system will solve all the problems we mentioned so far and allow them to be able to run their business efficiently and grow.

Andrew Tolhurst:          Fantastic. In terms of that implementation process, how do we go about if I'm on a stand alone system and I do want to move to an ERP or a different solution, how does the historical data and the transfer from one system to another work? Can I do that?

Inbal Steinberg:            You can. It's a question of should you. It's a good time to clean up and get rid of a lot of the mess that you had before if you had a mess. There is some information that is critical to bring with you. There's some information that maybe you don't need to bring with you and it's a question of whether it's worth the effort in bringing it across.

Inbal Steinberg:            What happens in an ERP implementation is a bit different to how you get started with a system like Xero or Quickbooks Online where you just sign up and get started. With an ERP system what will happen in that your implementation partner like JCurve for example, would create a series of sessions with you and during those sessions they'll go through your data and help you decide what needs to come across. So, in the first session maybe, they'll talk about your customers and look at what information you have about customers. What's the structure. What fields and how that best sits in the new system and transfer that with you.

Inbal Steinberg:            Of course you'll need to bring across your balance. Your customers, suppliers, products your balances when you get started and some outstanding transactions but then there's a whole big discussion about what to do with transactional history and whether or not we need to bring it across. We can do a whole webinar on that alone.

Andrew Tolhurst:          All right, I'll stop you there then. So, I guess, is ERP the only ... I'm just looking at some of the questions that are coming through. We have someone asking the question, is ERP the only solution that you can jump on when you outgrow your accounting software?

Inbal Steinberg:            Not at all. Not at all. It's a good solution for some businesses. For others, it will be an industry specific solution. I don't know, maybe you're running a veterinary clinic and you need a system that's very specific for that. For others it will be a custom solution where we build some product, some software that's designed specifically for them. For other still it's maybe just changing the integrations and how they work. So, the weight that we put on each system. The load that we put on each system.

Inbal Steinberg:            It's not at all the only solution and that's what I tried to say before. It's important for us to open up before we narrow down to understand our options before we decide which way we go.

Andrew Tolhurst:          Okay. I've got another question here. I've been looking at JCurve for a while but it's hard to find the right time to go through an implementation. What help is available to make this easier?

Inbal Steinberg:            Yeah, that's a really good one. I'd love to help. JCurve help with their implementation plan. I think that works really well for a business and you'll build that plan over two, three or even four months and it helps you get there. It doesn't have to be a, all right, for three weeks now nobody touches anything. The business is stopped and we're just dealing with the implementation. Not at all.

Inbal Steinberg:            You'll probably assign a champion in your business and depending on the size of your business it will either be the business owner or someone in accounts or someone in operations and they'll work with JCurve or with someone like me together with JCurve to slowly make the transition happen.

Andrew Tolhurst:          Fantastic. So the answer there is, give Inbal a all. Is that right?

Inbal Steinberg:            Absolutely.

Andrew Tolhurst:          Another question. Do all accounting packages publish their transaction limit numbers?

Inbal Steinberg:            No, they don't. I think Xero is the only one that I'm aware of them publishing their limits or their recommended limits. The other don't publish it as far as I know but also they don't publish any load testing or case study or they haven't published yet any case studies or load testing scenarios that will convince me that they can, or that will tell me what it is, whether if there is some limit, will tell me what it is. But it's a young market, so we'll see. It will be done.

Andrew Tolhurst:          Another good question here that we get all the time. How do I prepare myself for an ERP implementation or any sort of implementation, I guess.

Inbal Steinberg:            A lot of it comes down to mind set. It's about opening up to learn how that system can help us implement best practice in our business rather than trying to impose how we used to work to do things on the new system and usually that process of implementation with JCurve, for example, that has a series of 35 sessions, will help you through that process because for a couple of weeks we'll be dealing just with your customers and their structure and for a couple of weeks we'll be talking about suppliers and all the scenarios right up front and their catalogs and how they update practices and everything like that.

Inbal Steinberg:            For a few weeks we'll be talking about your products and go through that and that will take us through scenarios and making decisions on how we're going to implement it. So, I think I really like that way that that implementation is done.

Andrew Tolhurst:          Yeah. Do you have any info on how to implement ERP that you can send to attendees after this webinar?

Inbal Steinberg:            I think that's a question to you.

Andrew Tolhurst:          Well, we certainly do. We certainly do have some information.

Andrew Tolhurst:          We have a lot on our blog site. There'll definitely be links there available to be able to access that and have a look. Just on terms of the implementation, how it works and what we work with.

Andrew Tolhurst:          So, I think we might end the webinar there, Inbal. I thank you very much for joining us today. I'm not sure what it's like down there in Melbourne at the moment. Is it very, very-

Inbal Steinberg:            It's better than what it was over the last few days.

Andrew Tolhurst:          I can imagine. So, I guess, taking the next steps. You've heard from Inbal from Convertworx today so if anyone who's joined the webinar today has any further questions or would like to learn more about getting ready for the next solution or moving to another solution, feel free to contact Inbal at Convertworx and she's got a booking on her website that you can join.

Andrew Tolhurst:          If you want to learn any more about JCurve Solutions our content is on the internet and feel free to give us a call at any stage to talk further about how we can help your small business reach their maximum potential.

Andrew Tolhurst:          So, thank you Inbal and thank you everyone who joined today and look forward to hearing further from yourself, Inbal, as well as some of our attendees today.

Inbal Steinberg:            Okay, thank.

Andrew Tolhurst:          Thank you.



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