A step-by-step guide to choosing the right accounting system for your organization

By Geniene Scherer, CPA

When your organization’s accounting system isn’t meeting your needs, it’s time to purchase a new one. Easier said than done, right? Shopping for software can be a stressful undertaking. It requires careful evaluation that goes beyond the software itself; the implementation support from its vendor is just as critical. And, given the high cost of a new system, the pressure of making the right choice can be overwhelming.

 

The good news is, there are things you can do to improve your software selection process.

 

Why is choosing the right accounting system so important?

 

Effective financial management is crucial for your organization’s success. The right accounting system can enhance the following aspects of your organization’s financial management:

• Accuracy: Minimizes errors and ensures precise financial reporting.
• Efficiency: Streamlines financial processes, saving time and resources.
• Compliance: Ensures adherence to financial regulations.
• Support for growth: Provides the scalability needed to support your organization as it evolves.

 

To choose the best accounting system for your organization, consider following these steps.

 

How to choose the right accounting system for your organization (8 steps)

 

1. Get the right people involved.

 

A successful software shopping experience begins with involving the right people in the process. Depending on your organization, this could include your controller, key finance staff, and IT staff members. Your accounting advisor could provide valuable insight and support too.

 

To guide our clients in making an informed decision, we assist with facilitating the selection process, identifying key requirements, and evaluating options through analyses of functionality and costs.

 

2. Assess your organization’s needs.

 

Identifying critical needs for your organization’s accounting system can feel like an overwhelming task. However, breaking this process into key steps and involving the right people can help to simplify the process. To get a clear picture of what matters for your organization, consider assessing the following:

• Goals: What do you need from your accounting system to support your organization’s long-term objectives?
• Current challenges: Identify pain points in your current system. Pinpoint issues such as manual data entry, reporting difficulties, and time-consuming reconciliations.
• User requirements: Gather input from all stakeholders, including finance and accounting staff members, to understand their needs and encourage buy-in.

 

3. Evaluate your options.

 

Once you have a solid understanding of your organization’s needs, it’s time to go shopping. To evaluate and narrow down your options, take a close look at the following:

• Market research: Identify leading software solutions tailored for organizations within your industry.
• Reviews and ratings: Check feedback from other similar organizations on platforms like Capterra and G2 to gauge current customer satisfaction.
• Community resources: Look to user forums, knowledge bases, and user groups for peer support.
• Vendor reputation: Seek out vendors with a strong track record in your industry.

 

4. Check for efficiency and automation capabilities.

 

A new accounting software can greatly improve your organization’s efficiencies, but only if it has the capability to do so. The right accounting system for your organization will allow for the following:

• Approval workflows for purchasing, accounts payable, journal entries, and vendor creation.
• Shortcuts that allow for process efficiencies such as “populate from last,” “copy to,” “duplicate,” and “recur.”
• Reporting and dashboards that provide the information you and your team need—in real time and at your fingertips.
• Checklists to outline and track the completion of key steps for processes such as the reconciling your accounts, approving expenses, or creating new vendors.
• Easy communication within the system with the ability to tag transactions and link in or upload files for support—all to streamline your organization’s communications and help lessen the burden of managing your email inbox.

 

5. Ensure compatibility with existing systems.

 

The right accounting system will seamlessly integrate with your organization’s existing systems, such as its CRM, payroll, and HR software.

 

In evaluating a system’s compatibility, be sure to check for integrations already built and tested with other systems as well as customization options that can tailor the software to your organization’s specific needs. You’ll also need to plan for a secure and efficient data migration from your old accounting system to your new one.

 

6. Pay attention to security, compliance, and control.

 

Your organization needs an accounting system that will bolster its data security, compliance, and internal controls. For this reason, be sure to consider the following:

• Data security: Ensure the system offers robust data protection measures. Look for features like user access control, and regular security audits. The system should allow for access on a need-to-know basis only.
• Compliance: Verify the system complies with data protection regulations
• Audit trails: Does the system provide comprehensive audit trails to track changes and access to financial data?
• Internal controls: Look for a solution that provides the internal controls you need, including limiting access and segregation of duties.

 

7. Consider all costs.

 

To accurately assess a system’s cost, be sure to calculate the following:

• Initial costs: Start by identifying one-time implementation costs, as well as software purchase, or annual subscription fees. Carefully analyze these fees, purchase what you need, and plan to add on later as needed. Make sure you have a detailed listing of the software and services included in an estimate to aid in comparative analyses.
• Total cost of ownership: Evaluate ongoing costs including maintenance, upgrades, and support over the system’s lifespan.
• ROI and payback period: Remember, a new system can more than pay for itself, and the payback period may be shorter than you expect!
• Cost of inaction (COI): Delaying critical decisions about your organization’s accounting system can be costly; understanding the financial impact of inaction is crucial for making informed choices. As such, it’s important to ask: What are the negative financial, economic, and cultural costs your organization could incur if it fails to take action or address an issue or risk? What opportunities could be missed?

 

8. Evaluate the implementation partner.

 

When it comes to an accounting system, having the right implementation partner is just as important as the software product. A partner will provide support throughout the implementation process and beyond, empowering your organization to make the most of its new system.

 

To ensure you’re getting a true partner, look for a vendor that offers the following:

• Top-notch reputation: Look for vendors with a strong track record in your industry and responsive customer support.
• Project management focus: This is key to a successful implementation!
• Training programs: This should include extensive training resources including manuals, webinars, and live staff training.
• Ongoing customer support: Ensure you’ll have access to timely and effective support.

 

Secure support for your software selection

 

Finding the right accounting system for your organization is no easy task. By methodically approaching the process, involving the right people, and carefully evaluating your options, you can make an informed decision.

 

We understand it can be hard to know where to start. Our team can help you with everything from taking the first steps to guiding you through the process. We can support you with cost projections and steer you away from common pitfalls, empowering you to reduce your risk and confidently move forward with change.

 

To learn more about how we can streamline your software selection process, contact us today.