CFOs need a new financial accounting system.

Author:France, Matthew
Position:Accounting - Chief financial officers
 
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The role of today's modern chief financial officer (CFO) is not only expanding, but also evolving in a tangible way. Gone are the days when the CFO's purview was confined to chief "number cruncher" for planning, budgeting and forecasting; now the CFO is being looked to by corporate management to play a strategic role in managing the business at a high level, while also executing day-to-day financial decisions.

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As the CFO seeks to meet this broadening mandate, it is critical to ensure the right financial accounting system is in place. Many growing organizations find themselves in a similar predicament: their entry-level accounting package can no longer keep pace with their business's current and future financial management needs.

For most organizations with a legacy financial accounting system, there is not necessarily going to be a single "aha moment"--such as a complete system failure--thai precipitates a need to move to a new system. Instead, there is more likely to be a series of technology, security and cost red flags that signal the existing system is no longer capable of meeting the current demands upon it; clear indicators of its inadequacy in supporting business growth.

Heading to the Cloud

Many organizations are headed to the cloud for financial accounting solutions. The cloud is a model that delivers scalability, flexibility, features and cost benefits. Below are five key signs that the timing is right for an organization to move to a cloud-based financial accounting service:

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The System is Aging or Outdated

In the early years of a businesses growth, financial management needs could often be met with an entry-level accounting package that offered core functionality at an attractive price point.

But as business requirements become increasingly complex, starter accounting packages quickly become obsolete. As a result, many growing businesses are forced to apply information technology "band-aids" in an effort to hold the system together and in operation while trying to keep pace with user requirements.

The age of the financial accounting system will factor into the eventual need to replace it, but a better way to evaluate if the system is outdated is to assess the complexity required to keep it running.

For example, look for vulnerability spikes when implementing software fixes or upgrades, user interfaces or integrations to the core accounting system. A fix or patch for one area of functionality can...

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