Upgrading an Accounting System: What EVERY Business Should Know

Updated: August 09, 2010

A Roadmap to Success

The solution for tackling the challenges involved in an upgrade is to plan a "roadmap" all stakeholders approve and agree to follow. The first step is a thorough needs assessment, as the implementation of a new accounting system often impacts multiple business units and the flow of data between departments. Several key factors for success are:


Designate and empower a Project Leader

Depending on the size of the operation, an individual or a steering committee (with five to seven stakeholders) should be named Project Leader and put in charge of the needs assessment and selection process. The project leader may be actively engaged in procuring departmental input and making selections, or simply oversee the process, and delegate work to others.

Is an outside consultant necessary?


Independent consultants can save time and provide valuable expertise, depending on the operation's size, system requirements and internal capabilities. For complex initiatives that are broad in scope, consultants often get involved early on and oversee the needs assessment. In other cases, the needs assessment is conducted internally and product selections are narrowed before a consultant is hired. Then again, many businesses successfully manage the entire assessment and selection process on their own.

Take an inclusive approach


Key managers within each department should be brought into the planning process to optimize cooperation and buy-in. To identify problems and bottlenecks, solicit feedback from personnel at all levels who interact with the accounting system, input financial information, or generate reports based on financial data. Ask IT staff for advice on technology platforms best suited to the organization's systems and skill sets. The more inclusive the process, the more cooperative stakeholders will be, making a successful implementation more likely.

Think long term

It's not enough for a new accounting solution to manage current needs or integrate with current hardware. All potential solutions must be able to support projected long-term growth as well. Since a more robust accounting solution will facilitate faster growth, it makes sense to first find accounting software powerful enough to grow with you, and then determine the best hardware to run it. Hardware is by far the least expensive component of a new system, so if current equipment is inadequate, purchasing new hardware is a good investment.

Set a realistic budget

You should allocate roughly .005% of your annual revenue to a new accounting package. That covers software and implementation, including customization and training. Allocate funds to four categories:

  • New software
  • New hardware
  • Implementation and training
  • Ongoing support and product upgrades

Finance companies specializing in software and computer systems will work with you, if necessary, to set lease payments that spread purchase costs across several years, which alleviates pressure on cash flow. Depending on the circumstances, there may be tax advantages to long-term financing as well.


Selecting a Solutions Provider

Choosing the right reseller is crucial, but with so many resources making similar claims, it can be confusing to sort through credentials. Here are some suggestions for evaluating partners:

Check experience

Is a particular reseller well-versed in the unique needs and "pain points" of your industry? That's the number one question. One important caveat: If you contact a software publisher directly for a referral, you may be directed to the next reseller on the list, and wind up with a less-experienced resource. To avoid this mistake, ask potential partners:

  • How many years have you been in business? How large is your client base?
  • Can you provide case studies of your engagements?
  • Have you worked with systems similar to ours?
  • Have you written custom reports in our industry?
  • Will you provide references of current clients?

Check methodology

The best resellers have a proven, peer-reviewed process that includes:

  • Diagnostics & Analysis - Review and document processes, define scope
  • Design - Create a plan that integrates needs, process, people and product
  • Development - Adapt existing features, create new features, migrate and test data
  • Deployment - Set up operational environment on-site


Check training and support resources

Make sure there are at least three consultants on staff, are fully certified and receive product education annually. To control the cost of training new hires, make sure the reseller has at least one resource dedicated to phone and remote support.


Check your gut

To determine your comfort level with potential partners, ask yourself: Do they communicate clearly and effectively? Do they respond to requests quickly and thoroughly? Do they understand the unique demands of your industry? Can they explain and demonstrate technology in language all employees will understand? Are they open, and friendly?


What do you need in a new solution?

Once you have decided to build a new accounting solution, you need to determine what level of integration you will need. The larger the organization, the more challenging it is to connect systems, processes and people. Rapid growth or a business acquisition can transform a midsize organization into a large organization overnight. Without effective connectivity across departments, efficient work processes are compromised. Poorly integrated business processes and limited visibility into workflow are not only costly, but they have a considerable negative impact on organizational agility and competitiveness.

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