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How to Know When to Upgrade Your Accounting System

By: Michael Marinaro on November 22, 2022

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How to Know When to Upgrade Your Accounting System

ERP and CRM Systems

Regardless of whether your organization has seen symptoms of outgrowing your current accounting system, it’s important that you know what to look for in a more powerful enterprise resource planning (ERP) system, and if and when to make the transition.

When it comes to accounting systems for businesses and nonprofit organizations, QuickBooks tends to be the go-to. QuickBooks works well for organizations until they reach a certain size and begin encountering problems with scalability and manually performing complex processes. Then it’s time to prepare to switch to a new accounting solution to meet their needs.

I presented a recent webinar on ERP systems and what to consider when evaluating and selecting the proper solution for your organization.

HubSpot Video


In this article, we’ll recap the key takeaways from the webinar, so you’ll be cued in on when and how to transition your accounting system before challenges begin to take a toll. We’ll also identify the main indicators for when you should consider a new solution and how to evaluate and select the right ERP system for your organization.

Challenges With Accounting Systems

If you’re facing challenges with your current accounting system, your business processes are not as efficient as they could be. These challenges include (but are not limited to):

  • Fractured systems that don’t talk to each other
  • Manual processes
  • No mobile and remote access
  • User interface that is slow and not user-friendly
  • No customer or vendor access to information

Fractured Systems

If you’re relying on separate systems for eCommerce, CRM and expense management (just to name a few), your information is siloed instead of being housed in one, cohesive platform. You may have multiple software packages that don’t connect with each other and require a lot of maintenance, thus creating workflow struggles when certain information is not integrated and readily available. A solution to this dilemma would be a new system to integrate all these processes and their corresponding data, or to explore add-ons that would help tie fragmented systems together.

Manual Processes

Besides being tedious, manual processes are prone to human error. There are automation tools and AI-enhanced business processes available to keep your organization from being bogged down by manual procedures. For example, accounts payable (AP) automation software advancements allow programs to scan an invoice for all key areas of information without having to manually enter those details into your system. Approval workflows can also be streamlined with an updated software system instead of solely relying on email.

No Mobile and Remote Access

Especially with the increase in remote work, it’s important for your system to have mobile and remote access. You want to be able to access your data at any place and time, without having to rely on VPN connections and remote desktops to get the information you need.

User Interface Issues

If every time you onboard a new employee, you struggle with showing them how to use your system, it’s time to consider a change to your software. A user interface that is difficult to use or takes a long time to execute transactions will not only weigh on your overall efficiency, but your employees themselves. In the wake of recent issues with employee turnover and hiring shortages, it’s imperative that your staff has a positive user experience (UX) and your software isn’t contributing to dissatisfaction at work.

No Customer or Vendor Access to Information

If your current system doesn’t have the capabilities to grant your customers and vendors access to information when they need it, you’ll want to consider an upgraded ERP. Look for a system with features like a portal that allows customers to view and pay open invoices, or a place to connect vendors to remittance information and enhance your overall collaboration with partners.

Integrating Applications

A lot of the current ERP systems have features called “extensions” that you can add on to your system by downloading an application, just like you would on your phone, to integrate any outside products you may rely on for certain functions. Let’s say you use Business Central as your accounting system. You can search for an outside product you use for a business process and find results for extensions that will integrate that product with Business Central, thus eliminating the need for manual imports and data entry.

Analytics and Reporting

Another area where we see organizations struggle with outdated accounting systems is their analytics and reporting. Typically, they don’t have real-time access to dashboards or reports, there’s no AI to help analyze transactions and their data is siloed.

If you’re running into issues with your reporting, think about your reporting needs and how to improve your processes with upgraded capabilities to alleviate the hassle.

There are many business intelligence tools out there to help your organization analyze reports for greater insight, along with analysis of transactions and warehouse management in the case of manufacturers and distributors.

Siloed data is the result of keeping certain information in separate systems. For example, maybe all your financial and accounting information is kept within your ERP system, but a separate sales system is responsible for tracking invoicing and customer accounts receivable (AR), and another for payroll. You’re left pulling together all the data from these separate systems manually and having to combine all the information into a cohesive report.

An ERP system that is either fully integrated or offers extensions to integrate different systems allows you to create reports on all the data at one time, without the need for manual work in Excel.

NetSuite is a fully integrated, cloud-based ERP system that allows you to customize the interface based on the user’s role. Because all business information is housed in one system, you can automatically select to view data and reports relevant to particular departments or subsidiaries. Similar capabilities are available in Business Central as well.

Compliance and Support

If your industry has compliance standards and regulations that your company’s technology must adhere to, you’ll have to consider whether your software needs to be upgraded to stay in compliance.

It’s also an issue if you’re on older software that only runs on unsupported operating systems. If something happens to the underlying operating system, then your ERP software is vulnerable. Especially with the constant threat of cyberattacks, you must ensure that your operating systems are all on supported versions.

Should your system no longer be supported by the software vendor, that’s a good reason to upgrade your software to a newer version that is supported. If the vendor is no longer investing in new software features, you should consider a new system so you’re getting the latest and greatest improvements and your vendor is still supporting the software.

Other Factors to Consider With Your System

Something to keep in mind with your system is whether there are too many customizations. If there are customizations from years back that are clunky or difficult to maintain, consider add-on products that can execute the same processes as those customizations, or upgrading customizations to something more modern if you have the staff to support them.

Another trend to contemplate is a corporate move to the cloud. You need a cloud-based ERP system if you plan to ditch your on-premise hardware and make that transition.

Should You Upgrade, Add-On or Replace?

Once you identify the challenges you’re facing, the question is whether to upgrade your existing system, purchase an add-on system or replace your ERP software all together.

Advantages of Upgrading or Purchasing Add-On Software

If you go the upgrade or add-on route, there will likely be less disruption to your business. You may also have more buy-in from upper management because you’re keeping the same software in place and either implementing an add-on or upgrading to a currently supported version. There should be less of a learning curve associated with this than if you were to buy a whole new software package.

Another positive is that, in most cases, integrations should also continue to work with an upgrade. You can also take advantage of support for newer technologies. For instance, if you’re on an older ERP but there’s an add-on product that does AP automation, you can still keep your same ERP while making use of the automation add-on to streamline your AP process.

Advantages of Replacing

By replacing your accounting system, you can leverage technology better. You’ll also be able to reduce the complexity of the system overall because you’ll have one cohesive system in place, instead of a system you purchased 10 or 15 years prior that you’ve added onto. Additionally, moving to cloud solutions when replacing your system allows for:

  • Lower IT costs and complexity
  • Access from any device, anywhere
  • Regular and transparent upgrades and new capabilities to be pushed out (no need to worry about scheduling an upgrade and the downtime associated with it)

ERP System Evaluation Best Practices

When evaluating a new ERP system, ask yourself the following questions:

  • What problems are you trying to solve? There may be things that your existing system does well that you want to keep. You want to alleviate the challenges you’re facing while retaining the benefits of your system. Don’t solely focus on your current problems—think about what’s going well and the long-term effects of a new system.

    This is where demos and test drives come into play. Make sure that when demoing a new system, you have questions prepared that reflect your current workflow and how you expect a new system to function. Take advantage of test drive opportunities, if available, to get a better understanding of how a software would work for you before committing to it.

  • What opportunities can you take advantage of? Figure out what capabilities a new software has to offer that you can take advantage of in your organization.

  • What reporting/forecasting capabilities are you looking for? Think about what reports and metrics are important to your organization and who will be using the dashboards, reports, KPIs, etc. Will they need mobile access? Make sure that you’ll have relevant reports and those who use those reports can easily view them.

    When it comes to budgeting and forecasting, do you have a budget process currently in place? If you have workflows already in place, you’ll want to see how they’ll be carried out in the new system.

  • Are there new rules/best practices for finance or operations to follow? For example, if your business is following the new lease standard, find out if your software can meet those requirements. Ensure that the system can execute best practices or specific rules for your organization to be compliant.

  • Does the system have new CRM/marketing capabilities? Maybe you’re using a separate system for sales and you want to house all your customer data in one platform. Assess what capabilities are available so when you’re viewing a customer record in your ERP, you can see all the activity at one time.

  • What is the implementation plan for upgrade vs. replacement? Talk to your system consultant about the implementation plan. What does the plan look like? What is the downtime going to be? How long is it going to take for the system to be installed? Can you take a staged approach, or do you have to implement everything at once? Know what to anticipate when considering a transition.

Key Takeaways

Whether your organization needs a new accounting system now or in the future, it’s important to have an idea of when to consider an upgrade, add-on or replacement ERP system based on the trajectory of your organization and any challenges you’re encountering. You should evaluate your organization’s unique demands to properly assess new technology and your next move.

This is not a one-size-fits-all approach. Depending on your specific needs and the state of your technology, you’ll need to decide what makes the most sense for your organization—and we’re here to help.

Need Help?

Our team has a deep bench of CPAs and consultants with expertise in ERP systems and accounting software in a variety of industries. If you’d like to explore whether your organization is ready for a new system, contact us online or give us a call at 410.685.5512.

ERP webinar recording

About Michael Marinaro

With years of experience consulting with clients on ERP software, including Microsoft Dynamics GP, Dynamics 365 Business Central and NetSuite, Michael enjoys helping businesses save time and increase efficiencies by integrating systems together. Anyone who has ever worked with Michael knows that he is passionate about getting the most out of any software package. Michael admits that he cannot escape his “inner geek” – ever. He loves exploring new features in products and learning new technologies so he can apply them to real-life problems, or just play with them for the fun of it.