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Find financial accounting software you can take to the bank

This multi-step selection process can help organizations overcome the challenges—and reap the rewards—of finding the right financial accounting software.

The stakes have never been higher when it comes to financial accounting software selection or upgrades. Companies that choose incorrectly risk disruptions at the very core of modern enterprises—the general ledger, billing and collections, and financial planning capabilities that manage and track an organization’s viability. But by making the right decisions about the latest and greatest financial accounting system technologies, companies can gain a competitive edge from advancements in business intelligence (BI), mobile computing, and cloud-based delivery models.

As a result, consultants say a step-by-step process of comparing current needs with the new capabilities coming into the market can guide organizations on how and when to upgrade financial applications, no matter if they are considering new plug-ins for an existing ERP platform, a first-time platform commitment, or a set of modern, specialized financial accounting systems. In each case, the guiding principle should be -- appropriately enough -- the bottom line. “There may be this new mobile app for an iPad available, but so what?” said Steve Tennant, managing director at Tennant Consulting, a technology and business advisory firm based in Orinda, Calif. “What are the benefits to the business? The business case should drive the effort.”

Identify financial accounting software needs

The first step to financial accounting software selection, conducting a needs analysis, should be the main responsibility of a steering committee composed of the CFO and comptroller, the IT department, and a cross section of people from procurement, payroll, manufacturing, and other business areas. Cross-functional expertise will help determine current needs and potentially identify opportunities for cost savings later on, analysts say.

For example, ERP software vendors may offer discounts to entice buyers of a new financial accounting system to purchase modules for functions such as supply chain, inventory management, and human capital management. “Folks in accounting need to get the operational people on board--there frequently are a whole set of requirements from people down the hall that should be considered as part of this process,” Tennant said.

Even a multi-departmental internal team may not be enough. Some organizations may opt to hire a technology research firm to help survey available financial accounting software options or a financial consultant to address specific challenges, such as the latest updates to U.S. Generally Accepted Accounting Principles (GAAP) or the European Union’s International Financial Reporting Standards (IFRS).

Take a broader view of financial accounting systems

Next, organizations should look even further outside their own operations by attending relevant industry forums and speaking directly with other successful enterprises in their market to understand how they chose and are using the latest financial accounting applications, the consultants say. This research will identify new capabilities that have become available since the organization conducted its last major financial accounting system upgrade. Look for advancements in reporting and analysis capabilities, including embedded BI tools designed to be used by business managers and others not trained to be analytical specialists.

Also high on the list of considerations are the potential advantages of financial accounting systems delivered via public clouds. These include the ability to efficiently scale resources to quickly accommodate growth, less time needed to add incremental upgrades, and fewer disruptions when it is time for a major upgrade. “Most customers have come to the realization that having a company whose sole business is running the solution is a better setup than having your IT guys trying to manage financial applications along with 20 other applications,” Tennant said.

But concerns about cloud security risks linger, especially when it comes to financial accounting systems that routinely process highly sensitive information. The public cloud model of allowing multiple customers to share portions of the same applications, servers, databases, and storage systems is a step some organizations are not yet willing to take. Nevertheless, as cloud security technologies improve, cloud-based financial accounting systems could become the choice of more organizations. So even if the cloud is not a priority today, the steering committee should outline how the technology may fit into the longer-term IT roadmap, Tennant said.

Next, zero in on needs specific to the organization’s industry segment, including any new regulatory requirements that apply to financial management. For example, the financial services industry is scrambling to incorporate recently enacted rules for exchange-traded derivatives.  “That’s a completely new requirement that none of the old systems support,” Tennant pointed out. “Every industry has something like that on the radar.”

Timing is everything with financial accounting software selection

Finally, the steering committee should factor in an important consideration beyond technology—when to pull the trigger on a new installation. For some organizations, the timing will be obvious, said Marc Hoppers, president and CEO of Cogent Co., a Dallas-based IT and management consulting company. One recent client decided the end had come for its 30-year-old homegrown financial accounting system. “They made the financial decision that it was too expensive to maintain the legacy solution versus going through the upgrade process,” Hoppers said.

But for others, the timing decision will be less clear cut, primarily because upgrades to financial application software can have ripple effects throughout an organization. “There is downtime and resources that enterprises must devote to pull off the upgrade,” Hoppers said. “There’s no one right way to decide when to undertake this process other than thinking through what capabilities will be core to the business’s success.”

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Finding the "right" accounting software is essential in my field - motion picture production. While production companies come and go with every new film, there is a 35+ year industry-wide history of using accounting software to create budgets, seek investments, determine what can and can't be done for any given amount of funding, and ultimately determining the actual cost of production. Since some films are made for dollars and others for tens of millions of those dollars, there's currently a wide array of programs specifically designed for this industry, with most productions focused on the top three or four.