Winning new business, increasing profit and expanding the business may be the things that give you a buzz; but the software that manages your accounts is the backbone of your operation.

When it comes to changing or improving your current system it's not easy to pick the right package. For a start there are more suppliers to choose from than ever with an ever-growing range of products available from boxed off-the-shelf packages, to more tailored bespoke IT solutions that can affect all parts of your business.

Adding to the problem is that for most businesses, accountancy packages are a one-off purchase unlikely to be repeated so no CEO or FD could ever need to, or expect to, become an expert.

The need for change

The most important question for your business is whether you need to change your accountancy software at all. In some cases the need for change will be obvious: it could be that you may be keeping your information on different databases; that a client demands you start delivering information in a different way; or that your system is simply too old to meet your needs.

In other cases the need for change will be less obvious and it may simply a case that an upgrade to your current package will be more suitable to the business.

The tendency to milk software beyond its useful life is a common failing among smaller companies but your business may be missing out on functionality, or helping staff save time and work more efficiently. If, for instance, you spend a lot of time importing and reformatting data in excel then it is probably time for your business to look at a upgrading or changing.

Rick Holroyd is one person who has been through the process of change recently with his contract catering business, Holroyd Howe. Having grown his business using Sage Line 100 software for six years, he decided the company needed something more sophisticated to meet a variety of needs which had emerged as the company got larger.

“Being in the catering business we have a disproportionately large purchase ledger. It has to handle 9000 invoices a month from suppliers for items like groceries that are ordered daily,” says Holroyd.

“We also want something that can extract financial data in one way and present it in a greater variety of formats to suit clients' differing requirements.”

And so the company swapped from its Sage package, which Holroyd describes as a loyal servant, to a Microsoft solution. Holroyd saw the switch not just as a pure software purchase but as an investment in the business going forward and advises other companies to do the same.

“Don't go for something that will just do. It's wise to invest in the infrastructure of the business. But always ask 'what is the benefit for the organisation?'” he says.

Your accountancy software is there to make your business function more effectively and allow you to see the figures that help you make the right decisions. If it isn’t, then you could end up wasting time and money on something that doesn’t work for your business. This was something Cathy Humphreys, finance director of recruitment company MaydayExec, discovered. After a hiccup with one system, she switched to an Access Accounts package suggested by an employee who had used the software before.

“Interestingly enough when our auditors saw it in action they decided to buy it too,” says Humphreys. “People should be really sure before they commit themselves to a package otherwise you waste money and time transferring data to a system that may not be right.”

The importance of accountancy software can't be overstressed but it needs to be tempered with experience and research, as choosing the wrong package may well cost in the long run.