Using accounting software can improve your financial accuracy, speed, and decision-making. But it will only work if it’s properly installed and implemented. Too many businesses run into expensive pitfalls. They choose systems that don’t scale, over-customize their workflow, or underestimate the change management that is required. Whether your business is outgrowing spreadsheets or replacing a legacy system, it’s important to have a clear and methodical approach.
The Process of Accounting Software Implementation
The term “accounting software implementation” refers to the structured process of choosing, configuring, and installing a new financial management system. Successful implementation plans cover everything from the initial planning and software selection to any of the following:
- Data migration.
- System setup.
- Staff training.
- Post-launch support.
With the proper preparation (which includes process mapping and preparing data for migration), the software can be configured to meet your company’s financial management goals without causing any disruption to its daily operations.
The Challenges of Accounting Software Implementation
Some of the things that can delay or even derail the implementation of new accounting software include the following:
- Challenges that come up during the data migration process.
- Incompatible legacy systems.
- Internal resistance to change.
Delaying the process can lead to cost overruns, data integrity problems, disrupted workflows, and compliance risks. In some cases, companies will end up having a partially functioning system (which can create more problems than it solves). It can also damage productivity, stakeholder trust, and even their reputations.
Planning the Implementation of Accounting Software
To have a solid plan for accounting software implementation, the following things must be considered:
- Methodology.
- Timeline.
- System requirements.
- Cost estimates.
- Stakeholder involvement.
Investing in these areas at the beginning can help your company to minimize disruptions, reduce costs, and increase your chances of user adoption. It can also be helpful in building a solid foundation for every stage of the implementation process.
Some companies use a phased approach, where features are gradually rolled out so team members have the time to adjust. This can lower the risk of any major disruptions or overlooked bugs. Other businesses use a “big bang” strategy, where all the features are launched simultaneously. Because it accelerates the timeline, this approach will allow companies to realize the benefits sooner.
Many companies choose a hybrid model, where they go live with the core financial modules (such as general ledger and reporting tools) and merge more specialized functions (such as accounts receivable and payroll rules) as users get more comfortable with the new procedures.
Choosing a Timeline for Accounting Software Implementation
The timeline for implementing accounting software can vary — whether it’s a few months for smaller businesses with simpler needs to more than a year for larger companies with complex systems and multiple integrations. The timelines need to be flexible and realistic. They should also have built-in buffers to accommodate for unexpected challenges. You need to have enough time for both system and user acceptance testing.
Implementation teams need to plan around important financial deadlines (such as year-end close, tax preparation, and audits), because it will lower the risk of having errors in the reporting while people are still learning the system. It will also keep these essential reporting activities on track.
The Importance of Identifying Requirements and Integration
Identifying and defining accounting processes, system requirements, and integration points early on will give implementation teams a clear idea about the following:
- Existing workflows.
- Regulatory obligations.
- Reporting needs.
- Data dependencies.
This part of the planning phase should also highlight any requirements that are specific to your industry, as well as any of the more complicated accounting scenarios.
Thorough documentation is also important, because it will keep the implementation focused and within scope. It will also reduce the possibility of any budget overruns, unexpected or unnecessary customization, as well as any delays that come up from unavoidable surprises.
Estimating Implementation Costs
The cost of the software and its implementation is an important consideration, but you should also think about the expenses associated with the following:
- Data standardization and migration.
- System customization.
- User training.
- Possible hardware upgrades.
All of these factors can push your total costs far beyond your annual software subscription fee. It’s also a common practice to include contingency funding that can be used to cover the cost of any unforeseen circumstances (such as additional requirements, functionalities, or scope adjustments). It’s also a good idea to consider opportunity costs (such as staff members being diverted from their regular duties), as well as the operational impact that system downtime or delays can have on core processes (such as invoicing and billing).
If you’re looking for a CPA in Corpus Christi that can help you with accounting software implementation and installation, be sure to reach out to Jennings & Hawley.