When mid-sized companies are growing, they reach a crossroads with their finance software. The entry-level platform they use has served them well, but now they’re looking for more. They require functionality that truly supports them, dedicated help when they need it and a solution that fits both today’s needs and tomorrow’s growth.
CFOs and other finance leaders in the mid-market are standing at a fork in the road. They can keep walking the familiar path with their current software. Or they can take a new route with an ERP or another solution built for the journey ahead.
Some companies will plough on with their entry-level software, unaware that it is holding them back. Then, there are those finance teams who take the leap and adopt more complex software for large organisations – such as an ERP – in a bid to match their size and needs, often believing it is the only suitable option available.
Yet a new report of 1,000 finance leaders at mid-sized companies found that, among those who had implemented an ERP, an overwhelming 94% reported regrets. A similar number (95%) also reported facing hidden costs with their software. These included additional payments for third-party support teams or experiencing unexpected price increases.
What is driving so much ERP regret? And what are the business costs of choosing the wrong software?
The journey to regret
CFOs are dealing with so many working pressures, both internally from senior leadership and externally with economic volatility. They feel rushed into making the decision about their software upgrade. They need a product that can help them maximise financial performance while also optimising internal costs and resources.
The issue is that many platforms can promise the world, but, in reality, are not the right fit for the size of the finance team or business. Part of this impression emerges from larger brands portraying an image that companies need an ERP as a marker of success. However, by assuming it’s the only option, finance teams miss out on software built specifically to meet their needs. They settle instead for a ‘one-size-fits-all’ solution that, in reality, rarely fits well at all.
Yet, as the survey reveals, this decision often leads to regret. Disparities between the new software and the company’s needs quickly begin to appear, leaving teams stressed and overworked.
The primary regret by respondents? A lack of adequate training and support – something that’s natural with larger software that is less tailored to a company’s size. The finance team often lacks the internal resources to provide this training themselves.
The other reasons for regret illustrate the very real costs such software can have on business performance.
Lengthy implementations and major underutilisation
The tale of never-ending ERP rollouts is all too familiar – and the report confirms it’s more than just a myth. A quarter of finance leaders spent over seven months waiting to use their new system, with a third facing a timeframe of at least 3-6 months.
Imagine being promised a kitchen renovation in eight weeks, only to have it take six months due to additional contractors being consulted, spiralling costs, and unexpected delays. The length of this transition can kill business momentum and deplete resources, with teams still reliant on their old software throughout this period.
Not only are platforms taking an age to implement, but a majority (60%) of finance teams don’t even use half of their software’s functionality. This can be attributed to the fact that teams lack the skills or training to utilise all of the functionality, which aligns with the top regret. However, “too much unused functionality” was the second-highest regret, too, suggesting that systems can be bloated or impractical to use.
New software needs the optimal level of functionality – coupled with continuous support – to encourage its adoption and ongoing use. Some might argue that having extra unused functionality puts you in a good position for future growth. But there’s a difference between needing capabilities in the future and paying over the top for features you’re never going to use.
A platform that can scale with you means it can do things like incorporate more entities, process growing numbers of transactions, deal with multi-currency accounting requirements, and integrate newer technologies like AI. It doesn’t mean paying for features that might remain unused for years because they’re not necessary for a mid-sized company.
All this does is lead to draining overheads and system complexity that hinders finance teams.
The crippling business costs
The decision to choose an ERP is understandable; finance teams can be in real need of more capabilities. But when finance leaders overcompensate for their growth, thousands of pounds are spent on unused capabilities. A standard ERP costs mid-sized organisations £100,000 a year on average. And with 60% of teams using less than half the functionality, that means around £50,000 is essentially being thrown away.
It’s similar to having a gym membership with additional facilities like a swimming pool, sauna and squash courts. You only use the weight machines, but as there are no tiered membership options available, you have to pay for everything. Conversely, relying on entry-level software can also mean teams miss out on extra features like multi-entity accounts consolidation, therefore stalling their attempts to scale efficiently.
It’s not solely unused functionality adding to costs. Ninety-five per cent of leaders also said they had experienced hidden costs such as extra technologies like AI assistants, third-party support and unexpected price increases – costs that are often not laid out at the start. It’s an incredible shared experience of mid-sized companies paying premium prices for their tools.
These financial costs are compounded by system complexity that impacts finance teams’ processes and insights. In an economic environment that is so volatile, the need for efficiency and real-time data visibility is key to effectively guiding business and financial strategy.
But a lack of training, slow implementation, system downtime – another top regret – and cumbersome integrations can all occur with an ERP. This can see teams reverting back to familiar manual processes like data entry and using spreadsheets for month-end reporting.
Finding the golden middle ground
With all these business costs, it’s no surprise three in five leaders are looking to switch their software in the next three months. The main drivers for migrating are consolidating multiple accounts, better reporting and better value – a clear sign of where current pain points are.
Every CFO and their finance team will have bespoke needs they need to address. It’s not only about limiting excess features, but also about finding the right tools. Many in the report also said they had “outgrown their software functionality”. As such, a detailed needs analysis is vital to understanding what features you do and don’t need. It’s then about searching for tools that provide visibility and control, without too much complexity or cost.
Choosing the wrong software can force businesses back to square one, restarting the entire decision-making process. But it doesn’t always have to be that way – there’s value in re-evaluating, and with the right approach, it’s possible to get it right the first time. For many mid-sized companies, that means finding the golden middle ground of software built to fit their needs from the start.
To learn more about the findings and receive expert tips on how to approach your next finance software decision, download the CFO Mindset report 2.0 here.
AccountsIQ delivers cloud accounting software for mid-market businesses. Providing automated processes that increase productivity, group accounting features and next-level business intelligence, AccountsIQ supports over 35,000 users in over 85 countries, enabling them to streamline their workflows and save one week per month via smart automation. With a go-live period 5x faster than competitors, AccountsIQ stands out in the market as an easy-to-use, cloud-native platform that delivers next-level insights and empowers better business decisions and faster results.
AccountsIQ is part of the AccountsIQ Group, which also includes the leading expense management software ExpenseIn. The Group has a combined headcount of 146 and is headquartered in Dublin with a second office in London.
