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5 Steps for a Successful Accounting System Change

Eventually it happens: you’re unable to get the information you need from your accounting system. And when this happens, it’s time to make a change.

But planning for a change in your accounting system can feel a bit like preparing for a battle, which reminds me of a famous quote from Dwight D. Eisenhower on the topic: “I have always found that plans are useless, but planning is indispensable.” So with this in mind, I’ve assembled the following five-step plan for a successful accounting-system change. (With all due respect to the former president, this is one plan that is not useless.)

Step #1 – Assemble your planning team.
As you begin, be sure you’re involving the right people. Look to the following: system users (people who use the system daily); system managers (people who supervise the system and understand reporting needs); system customers (people who rely on reports generated by the system); as well as management and Information systems/information technology (IS/IT) department leaders.

It is important to get buy-in from all involved; however, it is especially important to get management’s buy-in during this initial planning step.

Step #2 – Once you have the right people in the room, begin documenting your needs.
This is where you’ll need to gather information. A good way to do this is to assign different information-gathering tasks to those on your planning team. Here are some of the needs you should document:

  • Determine specific reporting outputs needed throughout the organization–what are the system customers’ needs?
  • Don’t be afraid to get nostalgic and reminisce on what worked well in the old system. What did you have to do to prepare for audits and other annual tasks?
  • Which information will migrate to the new system, and how will this take place?
  • What are the system users’ current pain points and/or what works well? Also, examine the current processes they use from beginning to end. This can help you determine whether and/or how they can be improved.
  • Document your understanding of significant transactions processes, such as cash receipts, cash disbursements, inventory management, fixed asset management, etc.
  • Document your understanding of reporting outputs both internal (management reports, such as sales, cash flows, etc.) and external (reporting to funders, taxing authorities, government granting agencies, etc.).

Step #3 – Perform a constructive analysis of the data you’ve collected.
Facilitate an open brainstorming session complete with a risk analysis as to what could go wrong in the transition. Start to document exactly how you want the system to function from a user standpoint through to end reporting, and then build this document into a request for proposal (RFP).

In preparing your RFP, be sure to get a good understanding of your budget for an accounting system—are you shopping for a Honda or a Cadillac? You should also think about the timing of the transition, and begin performing due diligence on vendors. Consider getting recommendations from trusted sources, but don’t neglect to research recommended vendors. When you’re ready to issue your RFP, send it out to a small number of vendors and conduct the interview and selection process.

Step #4 – Work with your vendor to make the transition.
Once you’ve signed the contract with your vendor, they become a part of your planning team. Their response to your RFP should have included a detailed plan for execution. Now it’s time to take the information gathered from the first three planning steps and reconcile it with the vendor’s plan.

Again, go through a risk analysis of what could go wrong in the transition. Focus on the timeline budget: break it down into phases and expectations for delivery. This includes designing the system—from daily use to reporting outputs.

At this point, it’s also important to outline a training curriculum as part of your overall plan. The idea is to train as you go, so you can hit the ground running with your new system. (Planning, training and implementation will take place simultaneously.) Be sure to build in weekly meetings during which your team can assess variances with the time and cost budget—and make adjustments as needed. Ideally, your team should communicate progress to date and expectations weekly to your entire organization.

Step #5 – Execute your plan!
Now it’s time to “go live” and begin using the system. Follow-up meetings that focus on analysis and feedback from daily user input to final reporting output should continue for approximately 60 to 90 days. Continuous monitoring of the system becomes an ongoing part of the system’s execution. Training should take place both before and after the system goes live. Of course, technical support will be another ongoing need.

Once you’ve made it this far, don’t look back. You may get nostalgic and think your old system was better at certain things. But if properly planned, your new system should sufficiently produce what you need.

Jack Abdo, CPA, is AEM’s Nonprofit Segment Leader. A true “numbers guy,” Jack’s passion for balance sheets is second only to his passion for helping nonprofits further their mission. You can reach Jack at 952.715.3051 or at jack.abdo@aemcpas.com.

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