Why your General Ledger system Should Be Your Choice -- And not your staffing software vendors'.
At the end of the day, you tally up your score measuring your profits (and losses) on each transaction. Key to the task of helping you keep score is your accounting system and its General Ledger functions. In this article, well focus on a few of the top issues staffing firms face about their choice of a GL system.
Today, the odds are that you have one software system for front-office transactions recruiting, placements, orders, fills, sales and another to handle the specialized needs of temporary employee payroll and client billing. If youve implemented one of the few single-application solutions available that handles all of your business transactions, payroll, and billing, congratulations! This is the best method of gaining greater efficiency and control over your business processes.
However, your staffing and pay/bill system is unlikely to have General Ledger (GL) accounting functions.
Why is that?
Mostly, it is because of the specialized needs of temporary staffing payroll and billing and, more importantly, the competition from the huge number of accounting GL packages available. As a result, staffing software vendors cannot cost-effectively offer a full-featured GL package. In fact, you should be wary of GL functions that are included in any staffing software vendors package, as it will almost certainly be very limited compared to pre-packaged commercial solutions.
So, whether youve got two staffing software packages (one for front-office and one for pay/bill) or a single application solution that handles it all, your staffing firm will still end up with a significant amount of payroll and billing data that needs to be transferred to your GL package. The GL is the core of your staffing companys financial records. The accuracy of the system you use is paramount, as is its ease of use. At this point, your staffing firm has three choices.
First, you could manually re-enter all the critical data needed for the GL. Yes, there are significant problems, such as time and manpower required, and data entry errors to contend with, but it will get the job done if you can live with these problems.
Second, some vendors may offer a one-way interface to a specific accounting package. This can be a reasonable solution for many staffing firms. However, its lack of choice discounts any specific needs you might have for your GL, such as planning for future growth, as well as the familiarity you might have with your current GL. You should question why you should have to give up your GL and deal with the cost of implementing not one, but two new software packages.
Third, in the best possible solution, your staffing software vendor will offer a one-way interface that works with virtually any accounting software package. This open interface gives you the freedom to implement or keep the GL package of your choice based on your needs and budget. The open interface enables you to set up relationships between transactions in your payroll/billing system and your general ledger system. Your GL system is then fed the data needed for your journal entries and reports based on the relationships. This gives you maximum efficiency and accuracy, while providing flexibility for your accounting staff.
So, there you have it. No matter how you measure your success, there is good reason to ensure that all of your technology infrastructure supports your business processes and contributes to your firms profitability. Your GL accounting software, as one very important cog in your infrastructure, should mesh neatly with your staffing software.
Sources:
http://www.cpasoftwarenews.com/articles/2003/Jan/survival1.shtm
http://www.softresources.com/
http://www.2020software.com/