Most small business owners equate business health to the amount of cash they have in the bank. Measuring business success this way reminds me of the old joke that ends with, “I couldn’t possibly be overdrawn because I still have checks left!” As your rental business grows, you will notice (or perhaps you are already there?) that you are no longer able to keep up with all of the relevant details. Now the fun begins because once the owner loses touch with every detail, operations and accounting suffer from having a direct link — and this is where an integrated accounting and rental system comes in.
What’s the big deal about integration?
A growing business must execute flawlessly in order to continue growing and it is virtually impossible to make intelligent business decisions without having quick access to accurate information. Some of the information needed, comes from the accounting system (e.g., cash flow requirements) but some of the information they need will come from the operations side of the business (Number of turns, equipment useful life, etc.). It is possible to get that information from disparate sources, but at the cost of accuracy and timeliness.
A tightly integrated business management system will marry accounting and operations data seamlessly, enabling management to get a higher level view of the business with access to drill in to detail as needed. Further, integrated business management software can be configured to monitor the data and proactively notify the appropriate person when action is required.
What does “Integrated” mean?
In the software business, Integrated means that the data is shared seamlessly between the relevant components (modules) of the software. Specifically, the accounting and operations modules are written in the same language using the same tool set and they share the same database. When the data resides in the same place it can be accessed by the same reporting tools and married as needed to provide comprehensive reporting.
Having an integrated system provides instant access to the data without having to pull from disparate databases or perform an import/export function. Some rental software providers will say they are “compatible” with specific accounting systems. This generally means that their data can be imported into the accounting system periodically. This does NOT mean that they can provide proactive access to the data in both systems.
Running your business without strong, integrated rental management software is a little like trying to repair of piece of equipment with a pipe wrench and a hammer. Having the right equipment allows you to be efficient and accurate. Having the right software allows you to manage your business with accurate and timely information. If you are struggling to keep up and worried about making bad business decisions, take a look at the “tools” you are using to help you.