Over time, finance and accounting departments have carried out their daily operations, using well-established processes that help get the job done. This is something that got me thinking; maybe there is a better way?
Why do businesses do the things they do?
We all like to think that it's because they set up processes that fit in with the business environment. But what really happens is that businesses set up their processes in response to market conditions at the time. But then as time goes on, the market conditions change but the processes don't! This can get to the point where the process is controlling the business itself rather than the other way around!
When accounting software was new, the competing products each had their own faults. For example, one product would have a terrific Purchase Ledger, but very basic Sales Ledger, whereas another product may have had fantastic General Ledger but poor Purchase Ledger, and so on.
So what was the answer? Build more functionality as soon as possible.
But, the business environment was very different 25 years ago compared to today. Accounting software was a new thing and nobody thought much about the user interface'. Instead, people were expected to adapt the way they work to how the software worked.
Roll forward a few years, and all the major functionality has been covered. But the software providers still need to churn out new features. So in order to fill that revenue stream, the developers create additional functionality where it's perhaps not needed, and it's sold to the customer as a vital' part of their software.
Is there a problem here?
Yes, because most customers may only use a small amount of the available functionality that they've been sold. Or, they use the additional functionality because they're led to believe it's a vital part of the process, which they're restricted to because of the software.
In an ideal world, accounting software should have the smallest possible impact on accounting and finance professionals so that they can get on with running their own department!
Is there a better way?
Absolutely, accounting software suppliers should build and manage accounting software systems on behalf of the customer, such as cloud based software. The supplier is likely to do this more efficiently, securely and effectively. While this was a major challenge 10 years ago, changes in technology (communications technology in particular) make this a sensible strategy today. This leaves the customer with what they ultimately want, time and energy to focus on their core business.
In order to do this, time should be invested in understanding how people use the software so that the application is molded to suit the user, and not the other way round! This will reduce time and money spent on training. If users do get stuck, assistance is provided using modern multimedia so that users can receive video based explanations from within the software as they use it. Again this leaves the customer free to focus on their core business, but it also allows for a much wider use of the application within the business.
The software supplier should also consider other aspects of the customer's business, and not just the finance function. Other departments will need to notify Finance of their expenditure, and easing this process is really important. This will mean making sure the accounting software can integrate with other applications. Not by passing large blocks of data semi-manually through legacy style interfaces. But by using online, transactional, real time integration between various applications from multiple suppliers. Once again leaving the customer free to do what they do best their core business.