Legacy bookkeeping systems might be slowing your growth

Most of us have heard the colloquialism, “If it ain’t broke, don’t fix it.” All too often, people use this as a reason not to repair or replace something that’s not performing as it should, but still seems to get the job done. 

When we’re talking about whether you should consider replacing the legacy bookkeeping software that’s potentially slowing your growth, defying “tradition” is likely the better path forward. Waiting until an inevitable product sunset or personnel change forces your hand could have disastrous consequences if you have: 

• A technical problem with a product that’s no longer supported 

• A process challenge based upon complicated manual data collection or cross-system data entry 

• A personnel issue with new staff who aren’t accustomed to working with legacy technology or manual processes

Settling for your tried and true on-premises bookkeeping software might seem like the path of least (or no) resistance, especially if you’ve restricted yourself with the sunk-cost fallacy. It’s understandable that you don’t want to abandon software you’ve invested in heavily over the years keeping up with updates, user licenses, integration and training. But if you only look through this lens, it’s hard to see that not pivoting to a replacement system could be a costly mistake. 

Try looking at this from the viewpoint of value instead of cost. Businesses often resist change because replacing a legacy system can temporarily introduce even more complexity. But the decision to break free from the inertia of a legacy system comes down to three questions around your people, processes and technology: 

1. People: What's the opportunity cost of not having the right people with the right skills in place to meet the coming challenges? 

2. Process: Why is it crucial to think about your processes holistically, and what’s your output-oriented approach? 

3. Technology: What does it mean to transition from legacy software to new—and emerging—technology solutions? 

Let’s explore these as you’re evaluating what you can do to bring your bookkeeping function into the 21st century. 

1. People: Avoid the opportunity cost of not having the right people with the right skills 

People are your most important asset. While it’s essential to choose the right bookkeeping technology and design effective outcome-based automated processes, not having the right people model in place — or the right people with the right skills on your team — could have disastrous results.  

Legacy systems have been integral to your business; however, knowledge and proficiency often fades over time. If only a few people in your bookkeeping function can operate your systems or execute the processes necessary to use them, their departure (planned or unplanned) could expose your organization to “key person” risk. But it’s not enough to simply have sufficient resources; your people should have proficiency in both the technology you’ve chosen and the automated processes you’ve developed. 

Integrate digital skills-building into your culture. Staff burnout from spending day after day performing repetitive manual bookkeeping processes is not uncommon and can lead to the loss of your top performers. Replacing your legacy software, automating your processes and upskilling your staff can enable them to focus on more strategic work. In addition to increasing the efficiency of your back-office function, this can help you attract and retain talent. 

Technological change is expected to reduce demand for bookkeeping staff by 6% from 2022 to 2032. This doesn’t mean we won’t need bookkeepers in the future. During the same 10 years, there’s a projected increase in openings of 183,900 for these professionals each year resulting from the need to replace workers who transfer to other occupations or retire. 

The nature of the job is changing, and employees need to have the technology solutions, effective processes and relevant skills that can help them ride the waves of change.

2. Process: Think about your processes from end to end and create an output-oriented approach 

Are your processes standardized, streamlined and documented to enable cost-efficient bookkeeping operations? If something happens to a key member of your bookkeeping team, could someone else step in and get up to speed quickly? Or are you hindered by labor-intensive manual processes? What happens when your business takes a hit from unforeseen circumstances?

Outdated or inaccurate data, delayed collections and inefficient enterprise resource planning (ERP) systems can limit the overall operational efficiency of your business. If you’re using manual processes, you don’t have ready access to real-time financial data, which can impact strategic decision making. 

If your bookkeeping function is spending time completing mundane tasks, you have less time to focus on core business activities. And this is probably costing you more in terms of your bookkeeping staff wasting time doing more work less efficiently and effectively. 

The purpose of automating bookkeeping processes isn’t necessarily to replace or reduce your back-office staff: 

• Instead of focusing on inefficient manual processes, your people can focus on higher value tasks. 

• Integration with other systems can help improve productivity and morale, while reducing manual and error-prone processes. 

• Having increased control and visibility with automated processes can help you better measure the effectiveness of your bookkeeping function and pivot quickly, if needed. 

Timely, accurate bookkeeping is the foundation for trustworthy data that can help drive better decisions––faster. When you automate your bookkeeping processes and simplify workflows, you can better focus on your business—and be better prepared for anything.

3. Technology: Transition from legacy bookkeeping software to new—and emerging—technology  

Your bookkeeping solution should deliver both short- and long-term ROI. To support effective decision-making, you should have the ability to access your data in a reasonable amount of time, and siloed data can be a roadblock to accessing and analyzing this data. 

Today’s cloud-based bookkeeping software solutions use automation and business intelligence to make bookkeeping and billing more efficient, freeing your people for more value-added responsibilities. Organizations that rely on legacy systems and fragmented IT environments to gather and store data will fall behind faster. 

Replacing poor-quality data with data that’s useful, timely and reliable can help enable better decision making. In fact, a data-driven approach that leverages centralized technology platforms can: 

• Yield next-level capabilities and efficiencies for reporting 

• Deliver detailed analysis for planning with significantly less manual effort 

• Help generate more strategic value for your business 

 Keep in mind that transformation is a group effort that requires buy-in from top to bottom (whether you’re a “mom and pop” shop or a multinational organization) to achieve a smooth—and worry-free—transition. Any serious commitment to digital investments requires beginning with the end in mind. Being outcomes obsessed about technology means that those at the top view it as a tool that serves the organization’s growth goals, rather than simply being a silver bullet. 

The benefits of transitioning from legacy systems 

Does anyone really miss the “good old days” of endless paper, manual calculations and old school solutions and processes? 

Business intelligence software combines business analytics with data mining, visualization solutions and infrastructure, along with industry leading practices to help you make data-driven decisions. And cloud technology delivers. In PwC’s 2023 Cloud Business Survey, 1,010 US business executives from public and private companies in six major industries were surveyed. They reported: 

• Cost savings (92%) 

• Improved resilience (93%) 

• Increased agility (94%) 

• Increased productivity (97%) 

• Improved decision-making (100%) 

Change comes slowly when owners and staff become accustomed to legacy systems they’ve used for years. But if those systems fall short of your needs, your bookkeeping function must work harder to provide timely and accurate accounting and reporting. Your people might make heroic efforts to patch the holes in bookkeeping practices, but they won’t be able to keep outdated systems from costing you money. 

If you wait too long to act, you could end up rushing to update your legacy software after it fails. Even worse: Legacy bookkeeping solutions may not deliver the accurate financial information you need when you need it. 

Inertia is often the biggest roadblock to updating accounting practices and platforms. Embrace complexity and think holistically. Don’t let fear of the transition process hold you back. Choose a bookkeeping solution that includes fully supported migration to help you save money, add value, and avoid losing data or placing a drain on your staff during the transition.