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Accounting system changeover? Here’s a few relevant pointers…

It’s a fact long observed over the years and well known throughout the commercial software industry:  “80% of our Clients use only 20% of our Software Product’s capabilities while the other 20% use 80% of it”;  Why, what’s the difference?  It’s all about Implementation, Implementation, Implementation…..

In this short article Darren Cran, Head of Client Services at AccountsIQ, gives us the benefit of his wisdom and considerable knowledge on what Finance Directors and CIO’s can expect when changing their accounting system, and what they can do to avoid many of the common pitfalls which, so often, result in poor, inadequate outcomes, and overly-delayed and overly-expensive implementations.

Darren has extensive experience in this area and in particular transitioning to a Cloud Accounting platform from legacy “on-premise” based systems. Darren and his team have managed many such projects from small simple implementations to large complex ones involving Multi-Group Structures with over 200 sites with extensive Business Analytics and Reporting. He has an extensive background in accounting and finance systems having trained with KPMG, served as management accountant and later CFO for a group of 20 companies before moving to his present role in AccountsIQ where he has brought our many Clients to that 20%/80% experience and beyond.

Expectations are very different now.  The basic month end is no longer enough.  You shouldn’t build a house for a growing family on poor foundations and finance functions are the same.  As no one is really interested in the foundations they have to be right and hence the importance of a well implemented system which is one that you can build on as the company grows.  It should be scalable if your company has growth plans.

CFO’s are being asked to step up and play a more strategic role in business.  Reliable Information is critical to facilitate good strategy and the finance function is usually the most trusted source of information to help key decision maker’s move a business forward.  As business gets more competitive and diverse in working practices the finance function is becoming increasingly more important.  Every transaction eventually visits the finance system and resource and sales systems are now increasingly integrating with finance too (e.g. Salesforce, MS Dynamics, Online ticketing and Reservation systems).  This puts finance in a unique position but it doesn’t happen by magic.  A good finance function is a combination of the right system and right people capturing data and reporting it to business managers in time.

In short, his message is that you should not underestimate and expect the changeover process to be simple (even though there are now many software aids which will ease the process)!  If enough time is spent at the design phase it makes for a much better experience as everyone has a vision of what the end goal is.  That’s the hearts and minds piece which is often overlooked.  In order to achieve this the implementation team need the support of the wider business leaders and community so that expectations are managed and risks understood.

It can be straightforward though.  The more you plan and prepare, the easier the experience will be. Changing your accounting system (and maybe, as a consequence, your internal processes also) is all about developing the pre-formulated goals and achieving the resulting long term benefits:  i.e. the increased productivity and efficiencies brought about by the changeover to the new Cloud Accounting system.  The initial move will require extra effort from all involved to bring about these results.   Some of the points to consider are as follows:

Select the right Software Provider:

You already know about the inadequacies and limitations of your existing Accounts package and consequently what you now require from your new system:  So, it should be fairly straightforward to match your needs to those that your potential Suppliers can offer.  Or is it?  Are you sure that you know what developments and innovations have taken place since you last looked?   There’s a lot more to be had now than just processing the Accounts every month.  For example, Business Intelligence, Executive Dash Boards, customised KPIs, Graphs and Charts, and “Drill Down” explorations and inquisitions, to name a few, which used to be the sole prerogative of the most exotic and expensive of database architectured systems, are now quite commonplace from some more advanced but modestly priced accounting software suppliers.

Most especially in the Cloud arena which is relatively unencumbered in terms of storage capacity and processing power versus older in-house based systems.  All of which can and will bring better insight into the performance and profitability of your business.  Fully transaction based systems will also constantly reflect the up-to-the-minute status of the business, literally.  Paperless Offices, On-Line Collaboration and Messaging, Cash Flow Projections, Email Communications, Off-Site working and so on, all have changed and replaced the traditional ways of doing business.  So, it’s very important to understand what a replacement system can also bring in terms of additional benefits, not just in the areas of day-to-day accounts production, but also in the areas of much improved and access to vital Management Information.  In addition, you need to ensure that the chosen replacement system is also scalable in that it has unlimited capacity and ability to continuously expand in volume terms as your business grows, but also that it can and will facilitate your ability to open up new avenues of business opportunities in terms of expansion.

Planning the Implementation:

Selecting the right software provider will go a long way to easing your implementation process and ensuring you have the right support you need for the future. After selecting, the number one issue in migrating to the Cloud model is the question of support – which is an absolute essential if the transition is to be the success you look for and deserve.  Therefore, during your selection process:

  • Ensure that you will have a dedicated implementation manager;
  • Check the provider’s support services (speak to existing clients of potential providers);
  • Ensure that you will have access to a dedicated Account Manager going forward;
  • Make sure there are SLA’s in place and are contractual.

In addition, having an implementation manager and team experienced in the world of accountancy is also crucial as they will fully understand your requirements and how to apply the new software to achieve the required outcomes.  You need to select a Supplier whose staff are completely proficient in both software and accountancy.

Speak to your potential software provider and ask them to talk you through a typical implementation process – and then speak to previous clients to ensure what they are promising is what they deliver.

Finally, make sure that the solution you select is one that can grow with your business. It would be a great shame (and waste of effort) to select a solution that you then outgrow only to find that your chosen system is limited in terms of capacity or that you have to “migrate or upgrade to a higher/later version” in terms of functionality, and you then have to repeat this process (when your business is larger, more complex and more demanding)!  When thinking about the future you need to consider new business opportunities; possibly additional sites or locations; new reports and new integrations with other systems that you don’t currently use.  Make sure that the chosen software solution is adaptable to such changing conditions and that your chosen solution is completely expandable in terms of transactions and data volumes and includes automatic access to enhanced and extended functionality.

Educate and Engage:

You are about to change an integral and long established part of your company’s processes and practices.  Many existing users of the current system will have developed their own ways of doing things and quite often change is not welcome as it means they will have to adapt and alter their way of working.  It might even mean that some people will have to change or alter their roles.  For example, implementing a Cloud based system will mean the end of the in-house system management in terms of Daily and Weekly backups and their rotation, no more Software and Security patches, no more transferring files to and from your accountant, and so on, since all of this is now fully taken care of and included as part of the Cloud service.

This means that the persons formerly responsible for these activities will now no longer need to carry out these tasks.  Others will be less dramatically effected, but will still have to adapt to changed and much newer and easier ways of carrying out, for example, electronic Bank Reconciliations, Vat Submissions, Invoice and Order Approval, and many other new processes and features.  The new Cloud based system will bring many benefits and you will want to encourage your staff to fully embrace these changes and recognise the long term benefits both for the company and their own personal future. In summary;

  • Educate your team on the topic of the Cloud and what it means;

  • Involve as many people as is feasible in the selection process in order to engender enthusiasm and allay any fears or suspicions;
  • Ask your chosen supplier for access to a Demonstration Test accounts so that those affected can have a chance to “try it out”. This is especially easy in the context of Cloud based solutions since all you need is a Laptop.
  • Explain future processes and procedures (as many will change due to the benefits of the Cloud). This may be a good time to re-write policies and procedures for accounting.

Engagement is about getting as many people as possible to “buy-in” to the future benefits of changing your accounting system. New systems and procedures take time to get used to and this can lead to resistance to change. Engaging people as early in the project as possible will engender acceptance and enthusiasm and will make the training and implementation steps much smoother.

Design and Plan:

Implementing a new system also presents the opportunity to revise some old, possibly outdated, coding and analysis systems in the light of the new system’s capabilities in order to gain maximum benefit from it.  To do this, however, you must get to know the new systems facilities and functionality in detail. So, work with your supplier’s appointed Implementation manager to get a thorough understanding of how it works and what benefits it can bring in terms of Business Information and Intelligence in the form of new Reports, Drill-Downs, fast Enquiries, Dashboards and Charts and so on.

The day-to-day operational stuff will flow as a matter of course with the introduction of the new system – but this area of management information is where you will get maximum benefit from the right design and set up of the company’s organisation and structure.  Now is a good time to re-examine existing structures (and possible future additions being contemplated), begin to write down Company and/or Group structures, Departmental structures within a Company, Charts of Accounts, Sales Analyses criteria and design initial sketches and thoughts on Reporting.  Some points to consider:

  • Plan pre-project design meeting(s) with your implementation manager to ensure that you both understand the objectives to be achieved in terms of Management Info;
  • Plan and assign roles and responsibilities within the implementation team;
  • Design the Group (if relevant) and Company Departmental Analyses structures (Divisions, Branches, Locations, etc.);
  • Design the Chart of Accounts and Sales Analyses Coding(s);
  • Agree to scope of the data migration plan;
  • Thoroughly plan the key Reports, Charts, and Management Information;
  • Agree milestones and key dates for the implementation process;
  • Agree training timetables and lists of users requiring training;
  • Agree a nominated “Super User(s)” to receive additional training and all training materials;
  • Review training material and customise towards different planned users of the system;
  • Design and agree each user access and user profiling and workflow processes.

At this point it really is about ‘brainstorming’ and understanding the project between the project leader of the business and the implementation manager. The more the two parties understand about each-others requirements, the better the implementation (and future use) of the system.

Setting up the user profiling can be quite important. If you have a large number of low profile users that only require minimal access to the system then removing un-necessary access to un-required functionality will make the system more appealing to these users.  An accounts system can be overwhelming for minimal users if presented with the systems entire Menu structure and if the user only sees what they are required to see then they will be a lot more comfortable with the system.

Finally, if integration is required then this must be discussed and planned at this stage. Many Cloud systems are very accessible in the transfer and integration of data. One of the key points here is to agree which technology partner will be handling the integration (i.e. who does the data request and push) and where the integration sits in the overall technological hardware system.

Train, Train & Train:

One of the most frustrating situations for everyone concerned is the Client who says he knows “how these things work, we’ve done it before” (I’m reminded of one particularly insistent Client in the USA) and as a consequence “doesn’t need or want to undergo all that wasted time and expense in training”.  The outcome, inevitably, was a situation where our Support Staff were continually being interrogated as to “how to do this?”, “how do I do that?” etc. to the frustration of both parties.  That situation went on for several months until the Client’s staff eventually convinced the CFO that they needed proper training on the operation of the system – after which all was peace, quiet and contentment.

While this circumstance doesn’t occur that frequently (and most usually happens in the event of a Client moving on to a new system having previous experience of an existing system), it is however symptomatic of quite a number of Accounting Software suppliers adopting a “Super Support Service” (and, of course a higher level of fees) in order to continue to service these types of clients who believe they understand the systems capabilities and, inevitability and sadly, fall into the 80%/20% category.

Training comes in many forms and different users will require varying levels of training. Once again you need to plan different training methods and events for differing users. Some light level users may simply require simple training cards on how to perform a specific task, whilst other users will require substantial training (such as “super users”). The first task here is to split the users by training level and define what is required for each level. You then need to decide what training tools are required for each user level and set dates for completion of such training. Differing training methods may include:

  • Training cards on various functionality
  • Training videos
  • Training documentation such as in-depth articles
  • On-line training guides
  • Webinars
  • Webex or one to one training sessions

Cloud technology roll-outs are very simple to conduct since there is no software to install or deploy – it’s already there and ready to use.  All that needs to be done is to parameterise your use of it. Every user can very easily access the system once they have been given the appropriate permissions.

How to Guides:  

Some functional areas can be quite complex, such as Bank Reconciliation, Multi-Company Consolidation, VAT Preparation and Submission, Multi-Currency Revaluation, and so on.  But, with the right information to hand they can be, and are, very straightforward.  Comprehensive “How to Guides”, with their step by step instructions and lots of background information as to how the system behaves and operates in these areas can be very useful.

Hand Holding Period:

Following the “Go Live” date there will be a period of Hand Holding.  This is where the software supplier works alongside you in ensuring everything is running smoothly, like a special support period.    At this stage, it is essential that you and your staff test out every aspect of the system to ensure its completeness and that all users fully understand their interaction with the system and are happy with it.  It’s important that the Training is fully complete in order to eliminate the necessity of further stages.

The Hand Holding period is also a great time to get feedback from users and to pass this feedback onto the software providers. Remember that Cloud software is a product that continuously evolves and develops and your feedback is very useful market intelligence for the software developer.  Additionally, you may find certain process and/or reports, whilst a great idea in theory, may not be ideal in practice and therefore need adjusting. This is the period to iron out small issues and ensure the system is moulded to your exact requirements for now and the future.

Post Implementation:

The SaaS model is a new way of working with Software suppliers, albeit some traditional software suppliers are struggling to alter their business models to this new way of working. In the SaaS model you are continuously paying for the use of a Software application and the support provided in a partnership model Therefore ensure your supplier has reliable, efficient support on hand when you need it.  As Cloud software product are continuously being developed there will only ever be one version of the software released to all clients. Therefore, ensure that you give feedback to your dedicated account manager to enable your desired upgrades, functionality requests and general feedback to be included in future upgrades.

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