Posted by Robert Half Management Resources on Wednesday, September 3, 2014 - 00:00 | Follow me
Today, businesses are faced with myriad options when it comes to financial systems and overseeing day-to-day operations. Depending on its size and scope, a business may use an ERP system, manage operations and data in the cloud or rely on tried-and-true Excel.
Where does your system fall in line, and how do you know if it’s the most effective method of handling your needs?
Gauging the use of financial systems
To better understand the use of financial systems, Robert Half teamed up with Financial Executives Research Foundation (FERF) to produce Benchmarking the Accounting & Finance Function: 2014. The data collected from nearly 1,600 financial executives in the United States and Canada sheds light on the popularity of different systems, as well as the motivations or reservations behind their use.
The report revealed 78 percent of U.S. organizations and 90 percent of Canadian organizations rely on an ERP system as their primary financial system. Microsoft Dynamics GP, Oracle/PeopleSoft, SAP and JD Edwards are the most commonly used systems, although at different levels, according to the U.S. and Canadian executives surveyed.
Remaining cautious about the cloud
Survey results indicate an interesting trend regarding the use of cloud-based or software-as-a-service (SaaS) applications. Smaller companies are the biggest users, the research found. Eleven percent of organizations with revenues of less than $25 million and 6 percent of those with revenues between $25 million and $99 million rely on SaaS financial systems.
While there are a number of benefits of cloud computing, including cost savings and improved efficiency, many executives remain cautious about the cloud largely due to concerns about external entities being responsible for the protection of sensitive information.
Excel remains an industry standard
The research also found Microsoft Excel remains the tool of choice for all but the largest companies, despite the rate at which small companies are moving to the cloud. An overwhelming majority (71 percent of U.S. companies and 69 percent of Canadian companies) rely on Excel for their budgeting needs. Furthermore, 73 percent of U.S. executives and 70 percent of Canadian executives use it for long-term planning.
Questions to consider
When evaluating financial systems, consider:
- Does your current system meet your needs? Is using Microsoft Excel for daily tasks sufficient, or do you work for a larger company that could benefit from the increased efficiency of an ERP system or the added security of the cloud? If you see room for improvement, consider a switch.
- How can you avoid mistakes when changing systems? Moving to a new ERP system or the cloud comes with potential risks, such as having to rely on third-party vendors. Make sure the timing is right, keep the lines of communication open between management and vendors, and expect the unexpected.
- Do you use available data to your advantage? Have you trained your staff to generate and interpret ERP reports, for example? Are you using that data to guide crucial business decisions? If not, take a closer look at your processes; you may be losing out on valuable intelligence that can help you draw more informed conclusions.
For more on the state of financial systems, listen to the 2014 webinar: Benchmarking the Accounting & Finance Function: 2014.