Many local businesses and organizations in the Philippines still rely on outdated or ad hoc accounting systems that can become a liability as their enterprise expands.

Both manual and Excel-based accounting systems, both of which remain popular in the country, are susceptible to human error and have limitations in the speed with which managers can order reports, both of which have implications on an organization’s efficiency and competitiveness.

Thankfully, the need to upgrade is now recognized by many businesses still running these systems. Unfortunately, when businesses do decide to upgrade to a modern solution, the choices are numerous and confusing. Your selections for an accounting system in the Philippines run the gamut from unique purpose-built apps to off-the-shelf solutions at varying price points. On one end, you have freeware and on the other end of the spectrum, you have solutions that do much the same thing but at tens of thousands of pesos to start with.

To make matters even more confusing, these comprehensive systems will often do more than just accounting, which can be good, in theory, but create other complications across an organization’s other processes. Even if an organization may want something more comprehensive, they may not be able to transition to a full enterprise resource management (ERP) system immediately and they may only need something to help them with accounting and payroll.

Because of these issues faced by local businesses, many developers, including those responsible for popular suites like SAP Business One, have modular solutions that allow organizations to only use parts of the system that they need, usually at a lower cost than a fully-fledged ERP system.

In the context of the Philippines, modular systems can make a lot of sense for several reasons. Some of these reasons include:

1.) Lower cost of upgrade

With modular accounting or ERP systems, you typically only pay for what you intend to use. In the case of many Philippine businesses, not too many see the benefit of having to pay more for a system they could not fully utilize. Modular systems can, therefore, provide better value when they do choose to upgrade.

2.) Modular systems allow testing before a full-blown ERP upgrade

Many businesses also see the value of a complete ERP system but want to be able to test the software before a bigger commitment. Modular accounting systems let them get acclimatized to using the software only for certain processes. This means that when if and when they do add modules for other business processes in the future, any such transition is smoother because there are already people onboard familiar with the system.

3.) Businesses can sometimes stop paying for unused or unnecessary parts of the system

Almost as important as upgrading in the ability to downgrade. The benefit of a modular system is that you can sometimes downgrade your commitment to cut down on costs. This can allow a business to only pay for the parts they find useful.

4.) Reduced risks 

The problem with a comprehensive upgrade that covers all your business processes is that the entire enterprise runs the risk of serious data loss, loss of productivity, and other such issues. With a modular system, these problems are still present but have less potential to create serious issues throughout the whole business. The business can also use modular systems to try before they buy, reducing their overall risk of committing to an accounting system that looks good on paper is a “lemon” in reality.

5.) More effective for different business models

Given that you only use whatever part you think you need, modular systems also tend to more usable for a wider variety of businesses. This means that an organization’s employees are less likely to be confused by having an excessive number of options available on the system UI, which typically makes learning how to use the system faster, increasing the value the system can offer an organization.

Conclusion

Modular systems have plenty to offer in the Philippine setting, given that Filipino businesses tend to be risk-averse and conservative when it comes to adopting new technologies. They are also often the best solution for small-to-medium enterprises that desire more efficiency and scalability but have a limited budget available for any accounting system upgrade. Get in touch with ANSI to find which types of accounting systems may best suit your business.