How do I know it is time to replace my current Accounting System?
You may identify with any one of a number of key indicator signs that it is time for your system to be replaced:
- How long has your current system been used?
A general rule to follow (assuming you've had no upgrades), is that software needs to be replaced about every five to seven years.
As you are aware, computer technology advances rapidly. When the time comes to upgrade your hardware due to system malfunctions or desire
for new speed, you may find your old system no longer works on current hardware.
- Are you extensively using spreadsheets or outside products to produce required information?
Many companies start using spreadsheets to supplement their accounting system only to find that over the years, the spreadsheets contain
the majority of their accounting data. This is a highly inefficient way to manage your accounting data and usually requires duplicate
data entry. This is a time and money waster.
- Are you outgrowing the capabilities of your system?
Signs of this include the inability to add more users or being required to purge your data more often than you want.
- Does your system no longer meet your needs?
- Have you experienced system slow downs?
- Can you no longer upgrade your operating system/hardware because your software will not run on the newer operating systems?
- Has your business changed in size, structure or manner of operation since the current system was implemented?
Answering yes to any of these questions may mean that it is time to look for a new system.
How do I select a new system?
- Step 1: Outline your requirements.
In this phase, you list out all of your "Must Haves", "Really Wants" and "That would be Nice" features. Most of the well known accounting
system's today will meet most of your needs, and are very similar in basic functionality. You will want to have your requirements ready
to compare from system to system. In this phase you will also identify how many concurrent users you will need on the system at any time as
well as what modules (General Ledger, A/R etc) you will need.
- Step 2: Develop a budget.
There is a wide disparity in cost among the accounting systems available today. In this phase, you must determine how much you are willing to
spend on a base system and on customizations as well as on hardware/software upgrades (an area that is frequently overlooked).You can
determine if you will need to seek financing during this phase also. Having pre-arranged financing can be a benefit, but many of the major
vendors offer special financing to encourage you to purchase their product.
- Step 3: Research and select 3-5 systems to review in detail.
Today there are many avenues available for looking at accounting systems. The Internet has opened up a huge resource of web-sites whose sole
function is to compare the different systems. You can find sites comparing functionality as well as costs. You can view demos and get
information on resellers of the systems in your area.
- Step 4: Contact the resellers of the systems you selected in Step 3 and setup a demo.
During this phase you will receive a hands on demo of the main systems you are looking at. Provide the resellers with your list of requirements
and make sure that those items are reviewed in your demonstration. This can be a lengthy process, but a good demo will give you an indication
of the product's strengths and weaknesses as well as a hands-on feel of how the software works. Once again, most of the accounting systems are
similar, with a few strengths and weaknesses, but only one will be right for you and your staff. Who should attend these demos? Upper management
as well as your day to day users! Each of these groups will have a different viewpoint that will need to be addressed.
- Step 5: Select a system and contact resellers of the product in your area.
Once you have selected a system, talk to more than one reseller in your area, if they exist. Talk to references, review pricing (there can be a
huge disparity in pricing) and request information on the reseller's data conversion and customization experience as well as support response
times and other services available. Select the reseller who you can best work with. This may seem like an unimportant step, but in general,
it is the most important phase of selecting your new system. Different resellers have different operational viewpoints. You need to be
comfortable with the skills, response time and general operations of the reseller you have selected. If you are not and you can not find another
reseller in the area, either look for one out of the area, or select a different system. This step is crucial!
- Step 6: Purchase and install your system!
Outline the customizations you will need so these can be in place on startup of your new system. Plan out when you will install and start to use
the system as well as if you will run parallel to make sure the new system works. Arrange to have your data converted or make sure you have the
necessary staff to re-key should you want to start over. This is also a great time to re-vamp your chart of accounts and vendor/customer/inventory
coding schemes.