By Cheryl Olson, CPA, CGMA and Diane Shay, CPA
“Ugh, why can’t my accounting system just read my mind?” This is not an uncommon statement when you find your accounting system doesn’t do what you want it to do in the time you want it done. We all have our days when we are frustrated with our accounting system, but overall it should meet core needs, not only for what you need today but also in the future.
Fortunately, there are accounting systems today that are more powerful and easier to use. It’s time to step back and investigate if you truly need a new accounting system or if you need to invest resources in training and tweaking the original setup for better functionality. Sadly, many of us over time learn to accept the frustration, live with inefficiencies and often create work-arounds rather than invest in getting the root problems corrected. If this sounds like you, keep reading.
Nonprofits often ask, how do I know if my organization needs a new accounting system? The answer is, “It depends.” First, the organization must understand their core functionality needs. Examples could include security, reporting, cloud-based (access anywhere, anytime), budgeting, etc. While all are important, what is the most important to your organization, its users and stakeholders?
The assessment process in determining the functional needs can be done by staff or by hiring a third-party provider. The most common reasons organizations hire out the assessment are that they need an unbiased process or internal staff do not have the available time to carry out the work.
If you decide to conduct your own functional needs assessment and gap analysis internally, build the work into performance goals to determine what your organization really needs in terms of functionality. As we know, what gets measured gets done.
At Clark Nuber, this is the approach we follow:
Meet with key stakeholders – such as the CEO, COO, and CFO – at a minimum to understand the main reasons for this work, plans for future growth and/or change in operations, and previously identified problems, needs and solutions. This conversation sets the stage for organizational perception and future impacts.
We conduct three different surveys to understand the actual reality for users and stakeholders.
- Information technology (IT) survey to learn about hardware, software, and overall enterprise architecture.
- Heavy system user survey to learn their experiences about what works well, what doesn’t work well and what functionality they wish they had.
- Stakeholder survey, including department heads, management, board and committee members, to learn how effective the financial information they receive is for decision-making.
Follow-up meetings are held with some staff and key stakeholders to go a little deeper on items identified in the surveys, obtain an understanding of the processes that are currently tracked outside of the system, and determine integration touch points with other systems.
Identify the most important functional needs of the organization from the kick-off conversation, surveys and interviews and create a list.
Evaluate the existing accounting system against the functional needs list. This is truly where you learn if the needs of the organization and growth strategies warrant a new system, or whether a commitment to better use of the existing system is needed.
Make a decision and put a plan in place to either pick a new accounting system or improve usability of the existing system. Either path requires a project plan with a leader, team, timeline, budget, and milestones for checking-in along the way. Of course, this project must be aligned with the IT strategy, operating budget and performance goals for success.
If your decision is to better use your existing system, you’ll need to break the issues down between how the system is set up, business processes in use, existing functionality, integration with other systems, training, staffing and upgrades/maintenance.
So, now what? Your next step is to perform a needs assessment. If you don’t know where to start, reach out to Cheryl or Diane for guidance. Whether you decide to implement a new system or improve your current system, in the end you’ll have the system you need and deserve.
Part two of this series looks at steps to take when you’ve decided that the organization needs a new accounting system.
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