March 21, 2023

Every item has a life cycle, and accounting software is no exception. With the constant emergence of new technologies and software, businesses are often faced with the decision to upgrade or stay with their existing accounting software.

Tempting as it is to stick with a familiar system, doing so invites counterproductive effects that could cost a business more in the long run. Today, we’ll explore the drawbacks of using legacy  accounting software and how modernizing systems could be more beneficial.

What is Considered Legacy  Accounting Software?

 A Software could be considered legacy for various reasons such as being built on older architecture, outdated functions or features, incompatible with the latest developments in technology, or product sunsets. 

In most cases, these older systems are no longer updated, have reached the end of support and are not compatible with modern solutions available in the market. The most common example of this scenario in recent years is desktop applications vs cloud. With the increasing advent of cloud solutions, most software companies have stopped supporting or developing new functionality for their desktop versions. This affects the value-chain where ISVs that made apps or plugins for desktops, would slowly cease to support the desktop applications as well. Unsupported or plugins not being maintained or updated become security threats for the entire organization still using those. 

 Achilles Heel problem with legacy software

A major disadvantage of using outdated accounting software is the lack of security. As cyber threats become more advanced and sophisticated, older programs are more vulnerable to attacks and either the software or plugins attached to such software become the weakest link

The risk of data loss and system malfunctions increases with each passing day as the manufacturer ceases the release of updates and security patches. These gaps expose a business to severe financial losses if sensitive information is compromised or corrupted beyond recovery.

In addition, staying with old accounting software means not taking advantage of the latest features of newer versions. These features can help streamline processes, improve accuracy, reduce time spent on mundane tasks, and provide better insights into financial performance – all valuable components in a company’s success.

Lastly, any issues encountered with old software may be difficult to troubleshoot since there is no active support from the developer.

Why Upgrading Your Accounting Software is Worth it

Despite the initial cost of replacing old accounting software with a new system, it is worth it for businesses to make the switch. According to The Practice of Now’s report commissioned by Sage, 35% of accountants believe adopting the best technology allows companies to diversify offerings and stay ahead of the competition.

A reliable and secure software will ensure that data is protected from external threats and internal errors alike. This not only safeguards finances but also helps businesses maintain compliance with the relevant regulations.

Moreover, advanced features can help automate repetitive tasks that do not need human intervention such as standard, routine journal entries or entering redundant data from invoices, and more, thus, freeing up time for more important value-added activities. . This increased efficiency can ensure that the books are maintained in close to real-time, offering better financial oversight and influencing the bottom-line performance in the long run.

While using old accounting software may be tempting due to its familiarity, it can lead to costly consequences for businesses.  Businesses could benefit immensely by modernizing their accounting system to ensure data security and take advantage of the latest productivity features available in the marketplace.

Why Businesses delay migrating accounting data from an older system 

One reason why businesses delay upgrading their accounting software is the fear of data migration or more precisely, the fear of losing data. It requires time and resources set aside from routine business to schedule a transfer of data from an outdated system to a new solution.

Professional data migration firms specializing in accounting data conversions have the knowledge, expertise and accelerators to help move simple or complex data, fields, tables and processes to a modern accounting system. Many companies take advantage of the modernization process, to explore better solutions in the market that could accommodate custom workflows, approval processes and custom fields either by the new accounting software or by use of additional apps that work seamlessly with the software.

You can read more on how to choose the right accounting software for your business here.