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By: James Christopher, Chief Operating Officer
This is our third post in our Growth Series for SMBs. A series of blog posts dedicated to providing our readers with information and ideas on the topic of growth for small to medium sized businesses. This posts focuses on the importance of establishing a core technical foundation for your business.
Reflection on the Recession
The uncertainties caused by the recent recessionary economy are forcing companies to apply more rigor to their financial and revenue planning processes. This is especially true in the Small and Medium Business (SMB) segment where a growing number of companies are beginning to realize the importance of formulating formal revenue and budgetary goals, and then executing against them.
A Move Away From Spreadsheets and Manual Processes
The trend is resulting in an overhaul of the informal accounting and revenue planning practices that have traditionally existed at many SMBs, according to Aberdeen Group, a Boston-based consultancy. Increasingly, SMBs are discovering that spreadsheets and manual accounting processes are simply not enough for the planning and forecasting needed to compete and grow in today’s business environment, says Aberdeen.
As a result, more SMBs are adopting technology tools to help formulate and execute financial plans. Large companies have already demonstrated how Enterprise Resource Planning (ERP) software can streamline financial accounting, business planning, reporting and auditing processes. A growing number of SMBs are hoping to emulate that same success through the strategic implementation of financial productivity and resource planning tools within their businesses. This is why Jump I.T. is offering a complimentary business assessment. To help you better plan to use technology to help your business be successful.
If Done Right, It Will Help Your Business Be More Efficient
Deployed correctly, such technology can help SMBs improve processes involving inventory management, sales, purchasing, invoicing and receiving. Similarly, by automating functions such as General Ledger, Reconciliation, Receivables and Financial Reporting, companies will be able to monitor and track their financial performance more efficiently than manual processes allow. For example:
- Automation can allow financial planners to quickly check if expenses are within budgetary limits and to make any needed adjustments.
- Financial accounting and planning tools can allow companies to more quickly identify and eliminate process and cost inefficiencies in the system.
- Importantly, they also enable better revenue forecasting and decision support capabilities.
Consider Compliance, the HST and New Accounting Standards
Such efficiency benefits are not the only reasons why SMBs should consider automating their financial and accounting processes. Another factor driving need for greater automation of fiscal processes is regulatory compliance.
Today, many SMBs and large enterprises are and will be faced with strict guidelines governing their accounting and fiscal practices including:
- Mandates such as the Gramm-Leach Bliley Act (GLB) and the Sarbanes-Oxley Act (SOX) have forced companies to pay greater attention to their bookkeeping and auditing practices.
- The Harmonized Sales Tax
- The change from GAAP to IFRS account practices by January 2011 for Public Companies
Old-school methods that rely on manual processes have proved to be inadequate in meeting the compliance challenge especially when it comes to a company being able to prove that it has implemented all the needed requirements.
No Longer for the Big Companies
Enabling such functionality can be tricky. But fortunately for SMBs, the availability of cost effective solutions, both on-site and hosted have made implementing financial productivity technologies a reality. Numerous off-the-shelf packages are available these days that can help SMBs quickly enable a lot of the needed functionality.
Companies that are unwilling or unable to do this on their own can take advantage of assessment services, like our complimentary business assessment, numerous managed and hosted services that deliver the needed functionality in a cost-effective manner. According to Aberdeen, companies that have started making investments in these areas need to ensure that they stay the course. Contact us if you’re interested in our complimentary assessment.