As a former finance professional who’s worked in the software industry for 15 years, I’ve spoken with many financial professionals who still struggle with financial consolidations, particularly when faced with complexities such as multiple legal entities, foreign subsidiaries, different financial reporting standards and currencies and cross-company charts of accounts. These complexities continue to cause grief and make closing the books very frustrating. Most often, financial professionals resort to using spreadsheets or re-keying data from one system to another. This is both time consuming and error prone

One answer is to standardize the company on a single financial system of record. One that can support multiple currencies, financial reporting standards and linked charts of accounts that allow subsidiaries to map cleanly into the parent company for fast and error free consolidations.

While traditional ERP systems address this challenge very well, for small and midsize businesses (SMBs), their cost can break the budget.  In addition to high up-front license costs, “on premise” ERP systems require expensive investments in computer hardware, network s and security and require skilled IT people to manage them.

However, there is an alternative: On demand software (also referred to as Software-as-a-Service or SaaS) presents an affordable option for SMBs to acquire robust financial management functionality without the high up front licensing, hardware and implementation costs as well as the ongoing support costs. On demand applications are licensed via monthly subscription fees  which significantly reduces the total cost of ownership. What’s more, on demand applications can provide similarly rich functionality that helps streamline consolidations and reduce or eliminate the manual effort.

FULL DISCLOSURE: I work for SAP and our Business ByDesign offering includes an on demand financial management solution. However, the key point I want to get across to finance professionals is that there are affordable solutions available that enable them make the leap from the desktop accounting systems they’ve outgrown to the functionally rich ERP systems they need to manage increasingly complex financial operations.