AN EXECUTIVE'S GUIDE TO ACCOUNTING SOFTWARE SYSTEMS
ACCOUNTING SOFTWARE PITFALLS
Accounting software applications provide both strategic and tactical support to business executives, line of business manages and decision makers, however, as with all types of information systems they are not without risk. A review of accounting systems implementation projects reveals a wide range of factors that contribute to success or failure. Most failures exhibit one or more of the following characteristics:
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Focus on features rather than benefits: Many buyers of Accounting Systems get caught up in the flashy features that software publishers tout rather than focusing on the benefits that may be derived from their use. Do you really care if you can change the font color on a report if the system can’t cut Accounts Payable checks in the right format? If you find yourself discussing the features of a product, try to change the discussion to the actual benefits of the feature, described or measured in business terms.
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Over-emphasis on technology: Much like the obsession with features, some accounting software reviewers will get caught up in technology discussions. From a business standpoint, does it really matter if the accounting software’s database is in the third normal form? Or, was it developed using the three object oriented characteristics of encapsulation, inheritance, and polymorphism? Don’t ignore technology altogether because it can be a strong indicator of the health and longevity of the solution, but, if the publisher has articulated a clear strategy and commitment to development, the technical details are less important. As with the feature discussion, expend your time and energy focusing on the business impact of the solution, rather than the technical details.
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Unclear, under-defined or constantly changing objectives: There are many euphemisms for this: hitting a moving target, changing the tires on a moving car, etc. In order for an accounting software implementation project, or any information systems project to be successful, you need clearly defined goals and interim benchmarks or milestones. Because an accounting system represents an abstraction of the actual business, the basics of the business need to be clearly defined. What business are you in, how do you measure it, how do you account for it, and how do you manage change? Clear agreement on these questions is essential for a successful accounting system deployment.
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Unrealistic budget: Talk to your peers, talk to consultants and read up to understand the proper investments required for accounting system implementation and post-implementation production. Establish a definitive budget before you start evaluating software. If your objectives are not in alignment with your budget then something has to change. Do not try to force it or go cheap and do not rely solely on the vendor’s sales team. Almost every repeat buyer of accounting systems states that they placed too much emphasis on cost the first time around.
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Unrealistic timeframe: As with budget constraints, ensure that your implementation project timeframe is realistic. Remember that your staff will be expected to continue with their regular duties while the system is being implemented. Consider backfilling key project positions and placing temporary staff in support positions, so that permanent staff can spend more time on the implementation. While there is some cost associated to backfilling, the investment will pay dividends in terms of reduced accounting software implementation costs.
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Overemphasis on data conversion: Avoid the temptation to convert all of the data from the legacy system into the new financial system. This is often very costly because the data is not clean and is not a direct field to field map. In addition to the cost, the expected benefits are rarely delivered because the data is so materially different. For example, it is very difficult to perform year over year comparisons when the basic measures have changed. A better strategy may be to convert only period end balances and keep a reporting database for historical information.
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Over reliance on outside consultants: Finally, stay involved and in control of your project. Management has to take leadership and ownership of the project in order for the project to succeed. Consultants are great at providing advice, determining a strategy, managing a project, or completing a task, but they cannot force adoption of new accounting practices or business processes. Get the management team’s early commitment, keep them involved, and let them lead the way.
Accounting Software Pitfalls
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