Is the new year time for new accounting software? Before ditching what you have been using, let me offer some observations from my past experience.
Tip #1: Define the users and reports needed first.
Start first with defining the users of the information and what type of information they need. Be specific on the frequency of reports, roles of users, reason for the reports, and why you are doing this. This will help really define what is needed vs. what looks good on a spec sheet.
This process should include both internal and external users of the information. Here is an example of what that process may look like.
|User / Role||Marketing Manager|
|Report Name||Contracts and Cash Sales|
|Description||Track average price of forward contracts and cash sales. Criteria – Broken out by crop and crop year in relation to insurance guarantees and budgeted yields.|
|Purpose / Use||Implementation of a marketing plan with specific price targets based on reaching minimum prices needed to cover cash flow needs|
|Frequency||Monthly – Minimum, Weekly preferred|
|Information Needed||Contracts, Hedge Accounts, Settlements Tickets.|
|Software||Accounting Software and Excel.|
Once you have defined the users and reports needed, move on to evaluate the people who will input the information into the new system.
Tip#2: Skills need to come before software.
Someone in your office or on your team has to have the skills to provide the information you need. Often times we have seen people move into more robust software, get frustrated, and just end up using it like a checkbook register.
In some cases it may mean changing the person responsible for keeping the books or even giving them up yourself. The person responsible for bookkeeping needs to be able to understand basic double entry accounting concepts and relationships. This is especially important if you are going to attempt to manage both accrual and cash based books in the same program.
Second, the person has to have a desire to learn how any new program works. We recently had clients move from Quickbooks to Red Wing and there are many things that are handled quite differently for very good reasons. This can be frustrating when what used to seem so easy is now complicated.
Third, it is helpful define a person on the team to visually review others work and catch things that just don’t look right. I can’t emphasize enough how important that is for the first year. In our own business, we have kept a double set of books in the old software for a year just to give us confidence in both our skills and the new software.
Once you have considered the people questions, then you can move on to specifics features and functions needed in the software package. We’ll address those ideas in a future post.