Growth brings change, and outgrowing your current accounting
system is a clear sign that change is necessary. But with so many options to
choose from, how can you be sure a new system will fully meet your needs?
Finding the right fit is all about asking the right
questions. Start by creating a checklist of requirements and preferences based
on how you want to use the new system. What functions should the software
provide, and how should it sync with other systems? Some organizations prefer
to integrate all financial functions in one system, while others opt to sync
single-function tools with a system that tracks the organization’s financials. Think
- Inventory management
- Bank accounts
- Do you want to connect them to the system?
- If not, how do you prefer to feed banking
information to the accounting system?
Next, begin looking at the different solutions available on
the market. Get granular as you assess each option, and consider how its
features impact daily tasks. Is the system designed to meet the needs of
organizations like yours?
- Create a sample chart of accounts that’s
representative of your business and ensure that the software can handle it
appropriately. Your new system must comply with rules and regulations that
impact your organization as well as offer adequate flexibility to provide
management with clear visibility into company financials.
- For nonprofits, evaluate how well the system can
adapt to your formatting preferences for statements, donations, pledges, grants
and other communications. Can it print with the proper titles? Can it track
restricted funds separately?
- If payroll functionality will be integrated with
your new system, can it handle all the tax requirements that apply to your
- Does the system have a review process, or is
that performed outside the system?
- Can recurring transactions be automated to save
- Can reconciliations be performed separately for
cash, credit cards or other forms of payment?
Transitioning to a different accounting system can represent
significant cost in terms of financial outlay, time and disruption to the
organization. It’s prudent to choose a system that meets current needs while
also accommodating future growth, so you don’t have to go through the same
thing a year or two down the road. That said, there’s no reason to pay for a
robust, feature-rich system that offers more than you’ll ever really use. For
each system on your short list, ask yourself the following questions:
- Is the system too sophisticated or not
sophisticated enough? Be Goldilocks here—hold out for “just right.”
- What is the monthly cost, including everything
the organization will need to fully implement and use it?
- Do you need third-party assistance to implement
the system? If so, be sure to factor in that additional cost. Often the cost of
implementation support is money well spent; someone who knows the software and
understands your organization’s needs can get you up and running faster, with
more complete customization to help you get the most out of your new software.
- Do you need special features or modules that
will raise the overall cost of the system? For example, nonprofits might
require features like use of class, dimensions or locations to allow reporting
needed by donors, banks, regulators, internal management, boards of directors
Ready, Set, Go!
Once you’ve settled on the perfect accounting system for
your organization and have it in place, be sure to leave time for testing.
Spending the time to adequately test functions, integrations and syncing before
you change over will help make the transition go smoothly once you do make the switch.
If the system replaces older software, you’ll want to
establish a cut-off date in the old system and perform reconciliations between
the two systems. This step is important to ensure that all information flowed
Your accounting software has a big impact on day-to-day efficiency and controls access to key data that informs business decisions. Sound choices here will pay off for years, so it’s critical to ask the right questions and assess options thoughtfully. For help choosing and implementing your next accounting system, turn to the experienced business consultants at HBP.
Written by Kelly Coutee; Supervisor