How damaging is it to use outdated financial software?

Transferring information from an outdated financial system program to a new product can be a mammoth task and it’s understandable that many businesses are reluctant to do so. However, continuing to use software long after it has gone out of date can lead to a serious and ever-growing financial burden for your company.

Would you still use an old car that was costing you more and more to run due to its poor condition or an old phone that was painfully slow and did not have the latest data protection features? Of course not, so you should not be using outdated financial software for your operations. This article outlines some of the ways that doing so could damage your business.

Inaccuracy

Accurate financial reporting is only possible when you have access to real-time, up-to-date information. Once you have reached the stage where software incompatibilities force you to manually key in data every day, the potential for errors rises significantly. This can cause all sorts of problems. Furthermore, the longer you use an outdated system, the greater the risk of data corruption and the loss of updated data due to automatic resets. Switching to a new system significantly reduces those risks. link to Access Financials

Disorganisation

Over time, growing businesses tend to gather a lot of excess data, documents and records of interaction. As this CrowdFlower poll shows, with an unfit finance system, large amounts of data can become seriously unwieldy. Even the most diligent worker will find that there comes a point when the software is no longer adequate for the task. Important documents and data can be lost within the system and retrieving data can take a lot longer than it should. This is compounded by the fact that older systems are simply not designed to handle as much data as the newer ones.

Inefficiency

In business, time is money. Every year millions of hours are wasted on manually retyping and rekeying data into new documents. This is especially true for businesses that do not have integrated financial systems, as a significant amount of time must be spent to compensate for this. Automated systems help to eliminate this wasted time by completely removing any need for manual rekeying.

Security risks

Using outdated software of any kind exposes you to an increased risk of being hacked and having data destroyed or stolen. As Verizon’s 2019 Data Breach Investigation Report shows, there are few areas more sensitive than finance. The fact is that when you use a new system from a reliable supplier, less time has been available to criminals to work out how to undermine it. Your finance and business data will be backed up via secured systems so they will be much less vulnerable to hacking, loss and theft.

Improved software integration also reduces the vulnerabilities in your system. By reducing the need for manual input, your business will be able to conform to data security regulations more easily, without running the risk of any important financial data being lost or stolen.

Impeded visibility

Another risk that companies face when using an old and out-of-date system is lack of visibility – a common problem associated with poorly constructed systems. If you can’t actively see what is going on in your company finances, you are putting yourself at huge risk.

Having a clearer overview allows you to detect mistakes as early as possible to quickly resolve them or to stop them before they become an issue. This makes for much more efficient problem-solving. It is also easier to identify patterns and to make all-important financial projections for the years and months ahead.

Impeded reporting capacity

Older finance software lacks the capacity to display real-time data, making it harder for your staff to produce accurate reports. Being able to create dashboards from selected information, even when working at speed, makes it much easier to visualise the whole task when preparing board reports or information packs for senior staff. This lets staff produce more complete and cohesive materials in a shorter timeframe, improving efficiency and increasing the organisation’s ability to react quickly to changing events.

Taken together, these factors illustrate the importance of upgrading and updating software. Failure to make necessary upgrades promptly can harm your company in many ways, eating away at your day-to-day efficiency and damaging your reputation when it leads to errors. The disadvantages of continuing to use outdated systems may seem insignificant at first, but they will keep growing and can ultimately put your business at a serious disadvantage.

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