In today's competitive market, the need to access instant information is a critical management tool for making timely decisions and keeping your reputation intact as a viable player in the marketplace. By ensuring your company has adopted a computerized financial system that can provide you with the required pertinent information, you will position your company as a competitive player.

A true financial management system is in fact more than a mere accounting program -- it is a financial reporting system that has the capability of providing any and all levels of management with timely and relevant information. The main information focus areas of a system are planning, control and performance evaluation. A management system will also provide a company with the non-financial information that is needed to view the 'big picture'. The overriding benefit of using a computerized system is that it allows all levels of management to adopt a more proactive decision-making style.

All aspects of a company's infrastructure will benefit. With a financial management system, a company's invoicing can be done in an accurate and timely fashion. Receivable reports can assist in getting a handle on collection of invoices, which results in better cash flow. Payables can be entered with a computerized cheque to pay the bills, which gives even the smallest company a professional image. Marketing and sales efforts, even customers, can be tracked to calculate a sales lifecycle return on investment, so sales efforts can be focused in the most efficient methods.

Here are a few issues you should consider when selecting a financial management system:

• Some packages include multi-user capability and some are limited so you have to look at how many people could be using this system down the road;
• If you decide to go global, you will want a good multi-currency package;
• Do you have inventory retail or wholesale? If wholesale, do you need a price matrix for different quantity levels? If retail, do you need to use a system that can operate with a hand scanner?;
• When invoicing your customers do you e-mail your invoices and do your clients pay their bills online?;
• Do you need to track job costs versus revenue?; and
• Should your company be issuing purchase orders for internal control reasons?

Before purchasing a system, be sure to fully address the issue of your company's long-term growth goals and plans. This way you can compare those to the limitations of systems you are considering and account for this in future budgets so that your are able to purchase more licenses, new hardware and take advantage of training opportunities.

Always adopt a long-term perspective when making purchasing decisions, otherwise your company may be purchasing a new system every year as it outgrows the old one. In my experience, I have found such systems as Quickbooks to be solid and flexible enough to grow with a company due to its many layers of functionality.

Be sure you know what you're buying and once you have made your purchase be sure the system operator receives the proper training. Also, do your homework when selecting a trainer or consultant. Does this person have a proven track record? Can they provide references? Do they really understand the various layers of functionality so that your company will get the most out of your system?

As always, a little homework goes a long way in delivering a healthy bottom line in a growing business.

Copyright - Kelly Melanson, Certified Management Accountant