ERP System in Small Accounting Firm
Summary of the Theory and Progression
In this 21st century, any business organization needs the help of technology to run their day to day operations. It doesn’t matter if the accounting firm is small or big. The accounting firm’s competition will be determined based on their efficiency and how they can effectively do the recruitment and retaining process. With the kind of technology that is available today, even the small accounting firms can raise their level of productivity without losing any money. Since the 1990s, many large enterprises have been using the Enterprise Resource Planning systems. But the use of the ERP system has been seen in the small accounting firms very recently. Installing the ERP system has immensely benefitted the small firms over the years. Many firms have also used the Microsoft Dynamics Navision (NAV) to conduct their business. (Kini and. Basaviah, 2013).
Now-a-days, the accountants are under heavy pressure. The expectations of clients are sky high. To help them with this workload, there is the cloud technology system with which information and data entry are assembled in one place. There is a dashboard on the cloud computing where there is client access, and an interface where the clients can communicate the accounting firm. There is also a portal available where both the client and the firm can upload and download their files (Mahesh et. al, 2011). If the small firms can implement this cloud technology then the cost to start this would be definitely lower than any other traditional technology. The managers also need to be proactive regarding their role in the implementation of new technology. So, managerial roles should be performed in an effective manner. (Salminen et. al, 2014). The level of efficiency will also increase manifold as the accountant’s will be able to access the client’s data according to their convenience. The system will be maintained by the firm and it also has a disaster recovery built-in within the system. So, the small firms need to formulate a strategy to shift to cloud technology if they already haven’t done so. But before ushering in this technology, the firm needs to think about the intake of the current technology like if the present internet connection used in the firm will be able sufficient and the workflow that will be needed to adjust for supporting this new technology. (Fordham and Hamilton, 2017).
The common theme/finding that was found in the four articles is the implementation of technology. For all the accounting firms, big or small, it is crucial that they adopt new technology to conduct their day to day business. All the articles talked about the technologies like ERP, NAV which both the big and small accounting firms have been using since a long time (Kini and. Basaviah, 2013).. But as the businesses are growing and workloads increasing the small firms need to formulate a plan to bring in more advanced technology to better serve their clients. But just implementing new technology would not be enough. The manager must first make sure that the firm is capable to handle the new technology. The accountants also need to be given proper training so that they can easily handle the cloud technology (Mahesh et. al, 2011). If the accountants and the manager are not well versed in the technology then this will affect the work process of the firm. They will commit mistakes, miss deadlines etc. All these will lead to a bitter confrontation with the clients (Salminen et. al, 2014).
As the four article selected to understand Implementation of technology in small accounting firm deals with one common theme which is business must adopt new technology in order to meet client’s requirement. However, the study of those four articles have different themes where the first article says about the necessity of technology in a small accounting firm and the findings revealed the disadvantages of non adopting with the change (Mahesh, et.al., 2011). The second article deals with the implementation of ERP system and the Critical success factor associated with the implementation of new technology. The findings revealed real life experience with small firm which suggest that the productivity of the firm has increased and the accounts works are no lengthier which has generated more clients and thus profitability of the firm has increased (Kini, et.al., 2013). The theme of third article deals with managerial role before and after implementation of new technology in small accounting firm. The author says about the challenges a manager and his team may face with new technology and thereby he needs to address future actions to meet the challenges. The findings from the study suggest the mangers to make new strategies and remain adaptable for new changes in technology (Salminen, et.al., 2014). The fourth article deals with the limitation of the new technology where he says small firm find difficult to invest in modern technology which becomes a hurdle for them, they also find tough to train their employees with new technology because training also needs budget (Fordham & Hamilton, 2017).
Technology in accounts has made accounting job easier. Accounting firm needs to welcome new technological trends to stay competitive in the industry. With the advancement in technology, accountants could work more effectively and efficiently by using their statistical and analytical skill and thus fulfilling the need of their firm. New technologies such as ERP, SAP, and Cloud make more efficient compliance process, tax preparation etc. According to Risto Tapio Salminen, Minna Oinonen, Juha Haimala Before and after the implementation of new technology in an accounting firm, managers have to play a crucial role to analyze the entire process (Salminen, et.al., 2014).Before implementation of the technology the managers need to test whether the accounting team is efficient enough to adapt with new technology. The manager needs to understand where his accounts team is standing in terms of knowledge of accounts as well as how much they are interested to accept the change in technology. If the business is not generating profit, it could be because of lack of technology development and the firm could lose its client by either non completion of work within deadline or error in daily work because of too much paperwork involved and less developed technology, thus the manager also needs to understand the influences of the new technology in their firm before and after on the clients. Ultimately it is the client who will give business and the firm will generate profit. Again after the acquisition and implementation of new technology in the system, the manager will have to train his team with new technology which could enterprise resource planning (ERP) system found in most of the small accounting firm. With new technology in the system will help the manager to get regular feedback of the team and could help in managing virtual team by email and internal company portals etc. The manager may need to refine the job role of team mates depending on their skills, knowledge and adaptability. There could be challenges while implementing new technology but once employee get acquainted with the system, it would definitely increase their productivity and in turn productivity if the firm will also increase.
Limitations and future research prospects
According to David R. Fordham, Carol W. Hamilton, the objectives of the study are concerned with the verification of any influence with respect to the subjective factors that exists in the organisation with ERP system being implemented. In order to carry out this purpose, a case study on a food business located in Espírito Santo was performed. The study took into account technological changes not only in a technological perspective, but only considering the structure of the small firm. It was found that the there was significant influence on the workers as a result of the technological implementation. It was observed that the business needs more capital in order to implement advanced technology. Such an investment may not be possible on the part of a small accounting firm (Fordham & Hamilton, 2017).
In the words of RT Salminen, J Haimala, M Oinonen, the managerial implications of the research papers studied within the ambit of business to business (B2B) in case of small firms don’t have notable impact upon the role relevancy in particular. These are more concerned with taking into account the implementation of research findings on the company level to carry out and for the sake B2B marketing with the help of relevant technology in a broader way possible. Most of the implications are concerned with the business practice are formulated to put an impact upon the recent actions. The importance of managerial skills or knowledge is predominantly hold by frameworks or the empirical findings. It is found that they do not come in line with the studies regarding managerial implications considering the future actions that provide technologies, managerial instruments or modes, which is directed to “strategist” or “coordinator” (Salminen, et.al., 2014).
In the words of Ranjan B. Kini, Savitri B. Basaviah, there are different factors in the implementation of enterprise resource planning systems in small and midsize firms that are being implemented. The future prospects of implementing such technologies look bright as it brings more authenticity and transparency in the accounting system of the firm. But the organisation has to apply cost effective measures to implement such a strategy (Kini, et.al., 2013).
Mahesh, S. Brett J. L. Landry, T. J. L. Sridhar, Kenneth R. Walsh found that, implementation of ERP technology in small firms have its own limitations with respect to available organisational resources, acceptable workloads, liberties with respect to time at disposal to carry on with ERP implementation. Although this technology can be handy in future as the small firms will be able to carry out the accounting system with precision (Mahesh, et.al., 2011).