Your accounting software generates information used throughout most of your organisation. That’s why choosing new software shouldn’t be delegated to a single department or manager. Participation across functional groups will help you select, implement and use the best possible financial software solution. There are, in general, five groups of people who should be involved in the selection process:

System Users
These are the people who will use the software daily. They need the software to be user-friendly, logical and efficient.
System Managers
Managers supervise the system users. These system managers must understand the financial information and reporting needs required by upper management, and then direct system users about how to effectively use the system.
System Customers
Financial information customers can be found throughout the organisation, in every department and at any level. These people rely on the reports, summaries and other data generated by the accounting system to make decisions and otherwise manage their particular group or department. System customers may not necessarily understand accounting fundamentals, but they do require the information supplied by the software.
System Sign-offs
These are the people who must give final approval to acquire the system. Typically this group includes representatives from Information Systems (IS), accounting and the executive management team. The company CEO may play a prominent role in selecting the system, or may delegate this task downward.
IS Staff
Representatives from the organisation’s IS staff should be closely involved in the accounting software selection process and typically play key roles in the software’s installation and ongoing upkeep.

2. Define the challenge

Make a list of the challenges you are currently experiencing. Then create a second list of what you’d like to do but are unable to do now. This information should become your core list of requirements when evaluating new accounting software.

What information do I need to make strategic decisions?

This could include results from budgeting and modelling your business. It might include current gross profit by product, customer or salesperson. You probably want to predict which customers and products are growing and which are declining. You may want to use financial ratios to measure your company’s performance against competitors. Your general ledger can show key profit and cost centre performance against budget to help you evaluate each group’s effectiveness.

What do I need to accurately forecast and control my cash flow?

Because cash is the lifeblood of a business, forecasting cash flow should be a key element of your accounting system. Sales order and purchase order tracking will also be invaluable, since they provide advance information about future cash inflow and outflow. Other elements that effect cash, which must be accurately monitored, include manufacturing workflow, shipping, receiving workloads and the movement of materials.

What information do I need to manage my assets?

Accounts receivable and inventory are often the principal financial assets of a business. Most of your company’s cash is tied up in these assets, so small swings in the amount of either of these two can have a huge impact on your cash flow. Your payback from exerting more control over your assets is easily visible and immediately apparent.

What do I need to change in order to grow?

Many businesses automate for the wrong reasons, or computerise functions that offer little payback. First, apply your resources to the areas with the most benefit to your bottom line. You can determine these areas through careful study and analysis of your accounting system.

How flexible can we be?

It makes sense to consider accounting software that has been created specifically for the general size of your business. Even following that general guideline, however, realise that few organisations use accounting software "as is." Most businesses customise one or more aspects of their accounting software. Those organisations that are most adaptable and attempt to integrate the most customisation and flexibility will receive the most out of their accounting software solution. You shouldn’t have to change the way you do business to suit your accounting package. Make sure the accounting solution you choose is flexible enough to adjust to your business requirements.

It’s possible that your organisation has the internal staff to successfully implement your new accounting system. It’s more likely, however, that you don’t have the people or time resources—or expertise—to devote to analysing, purchasing, installing and maintaining a system. A software consultant can help considerably. Consultants have special expertise—they’ve been through the purchasing and implementing process many times. And while they charge fees, they can help your organisation in three significant ways:

1. Evaluate and select the best accounting system for your organisation.

2. Save time and money during system installing and subsequent training.

3. Get the most out of your new system based on the system’s capabilities and your organisation’s requirements.

Some of the best consultants are accounting software resellers. Most accounting software products are purchased through resellers. Therefore, they can focus their complete attention on helping you automate business systems. Software resellers have a valid stake in your organisation’s success, as they want to continue servicing your company in the future.

The ideal consultant to work with is someone who has reviewed and installed accounting systems at businesses similar in size and scope to yours. To learn what types of organisations a consultant has previously assisted, simply ask. Here are some questions to ask a prospective consultant or reseller.

Can the reseller provide references?

Critical elements of any software implementation are product training, technical support, and future maintenance and upgrading. Look for a reseller who wants to assist you not only with the immediate sale and installation, but also with longer-term training and service.

This question separates the true consultant from the person peddling a product. To make the best recommendations for your organisation, a reseller must first learn about your organisation—including its current capabilities and those missing (but required) items or functions. Has the reseller attempted to learn as much as possible about your organisation? Has the reseller spoken to more than one person within your company?

Be wary of resellers who spend all their time discussing features—what a program does. Your focus during discussions with a reseller should instead be directed toward what benefits the accounting software can bring to your organisation.

While purchasing accounting software is a business transaction, you’ll be working closely with the reseller over a period of days, weeks, maybe even months. Hence, it’s important to find a consultant who you enjoy working with, who is a good fit with your company’s philosophy and culture, and who you feel will provide the necessary expertise and consultation in a professional way.

4. Evaluate application performance

Once you have selected a reseller or consultant to work with, take time to review specific software applications.

Here’s a secret most accounting software companies won’t tell you: the vast majority of accounting programs perform basically the same functions. Naturally, how they do specific tasks varies greatly. Does this mean you can’t go wrong when it comes to choosing accounting software? Not really. There are substantial differences among programs, what kinds of information they deliver, and the companies that create accounting software. Here are several of the key elements to consider when reviewing various accounting software solutions.

Are you familiar with the company that makes the software? Are they a respected name in the accounting software industry? How long have they been in business? What is their vision for the future, both of their own products and the accounting software industry as a whole? Obviously, you don’t want a "here today, gone tomorrow" organisation as their software will be unsupported.

Scalability is a fancy word for a simple concept: can your software expand as your business grows?

There are two elements to a product’s scalability. The first is scaling up—does the software manufacturer have a family of products that your organisation can upgrade to over time in a logical, easy and cost-effective manner? When considering future upgrades, ask these questions:

The other element to consider is whether the family of software allows for scalability out—can you add elements to enhance the existing software? The best software solutions allow scaling out by offering:

Implementing a new accounting system is a major undertaking. A key issue to understand is how quickly and efficiently the new software can be up an running. Ask your consultant or software vendor how long it takes for a standard installation and what factors may increase or decrease the amount of time needed.

Business, in general, and accounting in particular, can be complex; you want an accounting solution that’s simple, logical and easy-to-use. Consider these questions during your review process:

Most accounting software solutions include basic components. Review carefully what a program doesn’t have as part of its core modules; available options, while nice to have, can also quickly become expensive.

Attempt to discover what each program has "below the water." Are options such as multicurrency conversions, reporting capabilities, or invoicing features, to name a few, included in the core program, or only available as costly add-ons? Ask your reseller for help here; develop a complete understanding of what each program contains and how much each optional function will cost.

Within the next ten years almost every business will do business over the Web in one form or another. With this in mind, it’s important that your accounting software be robust and versatile enough to:

Building and running a Web store in particular is a huge challenge. So too is maintaining a site that operates 24 hours a day, seven days a week, 365 days a year. The best accounting software solutions are those that link closely with Web-store and other Internet software. These solutions allow your organisation to operate more efficiently and realise greater economies of scale. Again, ask your consultant for guidance. This long-term thinking is critical to choosing the best accounting software solution.

With the emergence of the Web, almost all companies will become global companies, in that they will buy and/or sell products in countries around the world. Here are key questions to consider regarding how global the accounting company and software are:

Other key elements to consider when reviewing accounting software solutions include the following:

This refers to the software’s limiting characteristics.
What is the maximum number of customers, vendors or inventory items it can handle? How many line items can be included in a single invoice, sales order or purchase order?

Does the software already have the capability to produce the reports that your organisation requires? If not, can customised reports be created with a minimum of time and added effort?

You want a system in which information can be entered quickly and efficiently: full-screen editing, embedded help systems, clear prompts, etc. You also want a system that does not require excessive mouse use, slowing down entry of information by continually forcing the user to switch between keyboard and mouse.

Find out how well each program prevents unbalanced transactions, and how users are stopped from deleting or otherwise losing important data previously in the system. Some systems provide detailed audit trails for errors to track who is making each change.

The degree to which sensitive functions and reports can be protected through passwords will affect how the program rates in security. Ideally, you should be able to specify which operations each user can perform at any given time. For example, a system with strong security would allow you to specify that your accounts payable clerk could only print checks on Thursday afternoons beginning June 1 and ending August 30. Some systems will even provide a report to verify when the check run was performed and by whom. For EFT functions, can you audit who changed vendors bank details with a before and after listing? Can you prevent operators in one cost centre from accessing & entering transactions in other cost centres? Are accounting system passwords integrated to network passwords?

5. Choose a software vendor

Now that you’ve reviewed the various accounting software possibilities, it’s time to make a choice.

It’s important to realise that you’re not only selecting an accounting system—you’re choosing a company as well. Previously we’d touched on what to look for in a software company. Here is a more in-depth look at the factors to consider when choosing a software vendor to use.

How many organisations in your area are currently using the company’s software? How many organisations around the world are using their software? How many resellers do they have?

If the company you’re considering has a large installed base of current users, it’s an obvious sign that they’re probably doing something right. A popular product is a good sign that a company is stable and customer-friendly.

A large installed base also has a second benefit:

Third-party software manufacturers will be more likely to offer add-on software, worthwhile utilities, product training and other benefits that you can utilise once you install the software.

Good software suppliers update their software frequently. They also make bug fixes available quickly and easily to resellers and customers via the Internet. Before you make a purchase, find out if the software publisher has a maintenance program in place that gives you access to updates as they become available.

This is similar to scalability mentioned earlier. A good software company invests heavily in engineering and develops new product features and enhancements regularly. They stay abreast of new technologies and make sure their customers do too, particularly those customers with a quickly growing business.

A software upgrade—where you move to a similar but more powerful product—can give your company flexibility as it grows. Software upgrades also are desirable as they often cost far less than the retail price of the full program. A good software manufacturer, however, will provide product upgrades at reasonable prices or as part of a yearly service agreement.

Your consultant will be a good resource regarding technical questions or other issues that arise. But you will still, almost certainly, rely on the vendor’s technical support team as well. Questions to ask regarding the vendor’s support team include the following:

6. Implement the system

Once you have chosen the vendor and product, and purchased the software, it’s time to install the solution. If you’ve done your homework, this is an exciting part of the process. Please note, however, it can also be a frustrating time as well! It will take time to adequately and safely install the new software without damaging or otherwise invalidating your existing system. Inevitably, there will also be a few kinks to work out.
What is the best way to make the implementation process a smooth and successful one?

Follow these guidelines:
Postpone modifications

One of the most common mistakes companies make is requesting extensive changes to packaged programs before installing and using them. Instead of trying to make a new system work the old way, wait until you understand how the new system works before attempting to change or customise it.

Frequent review meetings during the implementation phase will also help people become familiar with the new system. Don’t surprise users—let them know when changes will occur. As well, keep your management team involved during the implementation process through meetings, attending the training, etc.

Rushing the implementation can cause mistakes and unnecessary tension. Time your installation and implementation of the new software as close as possible to your organisation’s slow time of year. When you are ready to convert to the new system, attempt to do so during a weekend, to minimise business interruptions. You may even consider converting to the new system on a module-by- module basis or running in parallel with your existing system for verification purposes.

Plan to frequently review and evaluate the system based on desired criteria, such as one month following implementation, three months, six months, etc. Immediately inform your consultant and vendor of any challenges or questions. If staff know that you will be addressing any problems they are more likely to be patient and not sabotage anything new.