April 3, 2023

Accounting software offers many benefits such as flexibility in recording financial transactions, creating invoices, processing payroll, and generating reports in a timely and efficient manner. But choosing the right accounting software for your business can be tricky and expensive, especially for small and medium business owners whose core business isn’t accounting.

 An unsuitable or oversold software can result in  long-term financial implications, especially if you don’t make use of most of its features or if it hampers productivity. Eventually, many companies see the need to downgrade to more affordable accounting software, modern, efficient workflows or cut overheads. . 

Three things to consider when downgrading from an expensive accounting software

If you want to downgrade to a more affordable accounting solution, there are three ) things you should consider. These are the why, how, and what. 

Why – for the most part, the answer to this question is the extra cost of running an overpriced accounting software. In many cases, businesses may not use or need additional features and functions in their day-to-day or even year-end operations. In other scenarios, the added complexity may increase training costs, maintenance bills and require additional resources. All these challenges make it financially prudent for a company to save  money by downgrading to an affordable, yet effective alternative. 

How -. The simple answer would be a turnkey out-of-the-box solution that is plug-and-play. However, larger ERPs or complex systems with large data usually do not have DIY tools or automated scripts to reliably move data to a different system. Without the necessary skill set, you could lose essential accounting data or have to re-input data manually. Both of these are not ideal, cumbersome and time-consuming.

To modernize an accounting system, assessing the current and near-term goals of the business is essential. Any solution being considered must scale with the needs of the business and accommodate the growing needs of various departments and functions. Identifying a trusted accounting data migrations partner either via the software vendor or by researching online is the next step in this process. The top accounting data migration and data conversion providers would have a robust portfolio and capabilities to transform multiple software at scale.

What – Deciding on the right-fit accounting tech stack can be tricky and speaking to trusted advisors like your accountant, bookkeeper, leading SaaS or accounting software vendors can help in the decision-making process. There are a few rare solution providers who not only sell the software but also offer demos, support the actual data migrations and post-migration training services.

Cloud-based accounting software like Quickbooks is favored by 78% of small business owners. This is because of its accessibility, ease of use, and protection against data loss. Also, you do not want to move accounting data around often, so you should only consider solutions that have a stellar reputation for reliability  and stability. 

Even if a solution is popular, other factors must be considered as well. Take Netsuite for instance, despite being a leading accounting software, there have been so many complaints about its poor customer support, high cost and customers report feeling trapped. To avoid all of these, here’s a checklist you can use when deciding on which accounting software to use.

• It should be budget friendly
• It should serve your company’s needs and scale with your business
• Must be  cloud-based to cater to the distributed, remote and hybrid nature of markets
• It should have a positive customer service reputation
• Long-term stability 
• It should be easily accessible, low learning curve and secure. 

Overpriced Accounting software vs Affordable solution: What is the difference?

Most accounting software should be capable of performing basic tasks such as account receivables and account payables, ledger management, financial reporting, recording and tracking revenues, etc. But some accounting software have more features beyond what you get from typical accounting software. These are referred to as Enterprise Resource Planning software or ERP. 

ERP software like Netsuite or Dynamics AX are comprehensive and in most cases expensive to maintain. However, they are helpful for businesses that are ready to scale up and accommodate more complex processes. Solutions like QuickBooks or Sage, target small to mid-market companies with limited user and core functionality needs. They also have advanced solutions like QuickBooks Enterprise or QuickBooks Online Advanced or Sage 100, Sage 300, Sage 500, etc. that aim to bridge the gap between a full-fledged ERP system and a standard general ledger solution.

Benefits of downgrading accounting software

The word downgrading may sound as though you are missing out on some important features. This is not often the case, especially if the said features are not relevant to your business at the moment. Downgrading can help you realize extra money which can go into other aspects of the business. 

Also, times change and so does the business environment. If a company isn’t making as much profit as it used to, it might need to downsize. This means intentionally reducing the labor force and closing down some departments to reduce operational costs. Many business owners decide to downgrade not just for financial reasons, but to optimize resource utilization.

So a company that scaled up its operations to include using ERP accounting software may want to downgrade to a more affordable alternative as part of its downsizing process. 

In Summary

The abundance of accounting software makes choosing one a challenging experience. Even worse is getting stuck with overpriced accounting software that costs your business more in the long term. This is a good reason to downgrade to a more affordable alternative. If you are considering doing so, start by figuring out; Why, How and What of a downgrade process.