Up-and-coming software companies face plenty of difficulties. In order to succeed, software developers, salespeople, customer service agents, accounting reps, and all their distribution channels have to work together as a team.
Some high-tech firms believe they can still keep everything organized using Excel spreadsheets, but they eventually realize this is not the case. When it comes to managing all the resources that go into building and growing a successful enterprise, they have to be more creative and use tools that guarantee success.
Enterprise resource planning (ERP) systems, especially cloud-based ones like Sage Intacct, are one such tool that delivers a whole host of short- and long-term benefits to businesses.
Software companies that invest in cloud accounting dramatically cut costs. In fact, with Sage Intacct’s built-in automation features, software publishing firm Guidewire manages to save more than $100,000 annually from reduced labor demands. Additionally, tasks that potentially take weeks to complete -- like consolidation and month-end closing processes -- now take only days to wrap up.
Streamlined revenue recognition
ERP also makes complying with future accounting regulations much easier. Next year, all businesses have to comply with the new ASC 606 and IFRS 15 guidelines, which determine how and when revenue should be recorded.
If managed manually, there are sure to be data inconsistencies due to human error. But Sage Intacct resolves this by translating compliance requirements into simplified automated workflows, instantly recognizing and recording revenue according to the rules.
Efficient subscription billing
Most tech firms have adopted subscription business models whereby customers are charged monthly or annually for a particular web-based service. Again, without ERP software, your accounting staff would be forced to calculate how much a customer owes, send out an invoice, and record the payment in a spreadsheet.
Sage Intacct eliminates this process with tiered pricing, usage-based billing, and scheduling features. It means accountants don’t need to perform tedious calculations and can schedule when they want an invoice to be sent to a customer or vendor -- whether it’s on a weekly, monthly, or yearly basis. Conservative estimates indicate that this can save employees up to 40 hours of work per month.
Complete view of financials
One of the most cited benefits of cloud accounting is business intelligence. When every department diligently records expenses, invoices, and other project accounting figures to Sage Intacct, managers can read real-time information in one dashboard. Data can be produced with the click of a button, allowing companies to verify their financial standing, identify new software development opportunities, and make sound business decisions.
By taking full advantage of forecasting, billing, revenue management, and other automated features, Sage Intacct helps software companies reap serious returns on their cloud accounting investment. For example, eight months after installing Sage Intacct, Virtual Hold Technology achieved an ROI of 158%. Another Sage Intacct partner, TOA Technologies, also paid back their initial ERP investment in under three months, realizing an ROI of 532%.
Although savings and ROI vary from company to company, the benefits of cloud-based ERP systems are clear: They introduce more efficient processes and promote smarter decision-making across departments. And that, in a nutshell, is the essence of enterprise resource planning.
Tech companies aren’t the only ones that can benefit from ERP -- all industries, including healthcare, non-profit, and professional services organizations need it, too. Contact WhiteOwl to get your very own enterprise-grade, professionally managed ERP solution.