In recent years, companies in the Philippines, regardless of the industry, are using accounting systems to help ease the complexity of financial operations, guarantee compliance, and support decision-making. However, this system also proves to be fundamental when the company grows in size to a level where it becomes imperative to consider the scale of the said system. To scale means that a system can increase the workload, the amount, and the number of users without losing quality. Too many Accounting System Philippines have constraints that limit the potential for business expansion, which should be countered in the very beginning.
This article will focus on tackling several of the most common issues that relate to accounting systems’ ability to grow with the business in the Philippines, the problems that arise from such limitations, and how these problems are solved.
Limit User Access
A frequent problem encountered is usually the limitation on the supported number of users. Most entry-level accounting software that is targeted at small businesses often caters to a limited number of users which makes it impractical for bigger organizations who have different departments and geographical locations.
For example, a business that is expanding its coverage to several cities or provinces often needs more than one access point for the two regional offices. Constraining drawers in such a manner could interfere with the team’s work, thereby slowing down the finance-related operations.
Inadequate Data Handling
The growth of a business is closely followed by the generation of financial data in large volumes. This explains why most of the basic accounting systems in the market today are often incapable of handling such vast amounts of data, which results in either poor performance or even system failure. This restriction is quite evident in industries that process numerous transactions in an hour, for instance, retail chains and e-commerce companies.
In the Philippine environment, where there are in some cases fluctuations in business activities within the year (e.g. Christmas sales or tourist seasons), the lack of a scalable accounting system also means missed operational efficiencies and possible revenue loss.
Poor Integration Capabilities
In contemporary times, corporations tend to implement several software applications for various functions such as inventory control, payroll, and customer care management (CRM). Scalability issues arise when accounting systems are not able to work with these tools.
When it comes to the desire to translate into the digital scope of their organizations, enterprises in the Philippines are also experiencing difficulties with system integration. Inadequate integration capabilities result in dislocated information, increased mechanical repetition, and mistakes in the financial statements of the organization.
Cost of Upgrading
Most of the accounting platforms need additional resources in order to expand which makes them unaffordable to the SMEs. Being forced to upgrade to a higher tier solution or switching the entire system is also very expensive for the primary users. The flexibility of subscription as a mode of payment compels users to pay for engaging recurring payments which can turn out to be exorbitant, particularly for extra users or premium features.
In the Philippine context where all business considerations are guided heavily by cost considerations, the ability to scale adjunct systems derived from accounting can dissuade many companies from seeking expansion.
Limited Customization Options
Scalability in most cases entails modifying the system in order to change the existing accounting practices that do not match unique business needs. Nonetheless, quite a number of systems in the Philippines market have limited levels of customization, which means that companies have to change their processes to the software rather than the opposite.
For example, when an organization broadens its range of products and services or ventures into new markets, the lack of accounting system adaptability may become an operational inefficiency and a business compliance issue.
Server Capacity in On-Premise Systems
In the case of companies that install applications accounting systems in-house, expansion is limited by the ability of the server to hand l. Increasing storage or processing power brings additional expenses and engineering skills, which most small and medium-sized enterprises (SMEs) in the Philippines do not possess. In addition, on-premise systems are more cumbersome than cloud-based solutions when the need to scale up to accommodate sudden spikes in demand arises.
Dependence on Outdated Technology
Certain industries in the Philippines are still dependent on outdated accounting systems that were not engineered to scale. Such systems cannot adapt to current needs to include things like automation, real-time reporting, working from any location, etc. Hence, they become hindrances during times of expansion or digitization.
Key Takeaway
Scalability restrictions in accounting systems constitute grave obstacles to the development of businesses in the Philippines. These encompass having restricted access to the system, and using old and out-of-date operations which can limit their performance and hinder growth initiatives. This can be mitigated by investing in scalable solutions such as cloud-based platforms or modular solutions to ensure that the accounting system is an enabler rather than a drawback. For sustainable growth and profitability in the fast-changing business environment in the Philippines, the management should think about scalability from day one.
