Do you really need a new finance system?

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I’ve experienced a number of finance system implementations in my career. My early experiences have made me very reluctant to implement new systems, not because I don’t enjoy it, but because I know they are often very disruptive and don’t solve the underlying issues. Or they save finance time, but at the expense of budget holder time (this has been my experience of most purchase order systems in large organisations).

I’ve also had experiences of lots of accounting systems, and none have ever blown me away. Some are worse than others, definitely, but I have long since given up on the idea that there is the perfect package out there, particularly when you consider that every organisation’s needs are different.

This isn’t to say you should just make do with the status quo. It’s about making sure that you are replacing the system for good reasons.

So over time, I’ve evolved a bit of a checklist to think about whether or not a new system is necessary.

Is the accounting system the problem?

How many finance systems are sold on the basis that they will improve collaboration across the organisation? How often do they actually do this? If there is mistrust between finance and “the business”, a new system is not going to solve this. In fact, putting in a new accounting system in this kind of environment can be counterproductive.

Even if you have a collaborative environment to start with, how many issues are due to the existing system not being used correctly?

I’ve seen a few cases where an organisation has implemented a new system, but the change management side did not take. So all the anticipated systems improvements never happened. The initial enthusiasts left, leaving behind an unpopular system.

Can you get an add-on that does what you’re missing?

Increasingly a finance system will come as a core accounting package with other add-ons, either from the same provider or increasingly, from others.

Your provider might be keen to sell you an additional product but it’s worth having a look for other providers. Many will have already built interfaces to existing accounting systems and may have something that is better designed. For example, Sage comes with various workflow packages, but it is also possible to get third party workflow programmes that interface with it.

If reporting is the problem, you may not even need an expensive add-on

If your issues are around reporting then you can effectively and flexibly solve the vast majority of issues with one or a combination of Power Query and Power BI. This is going beyond “reporting in a spreadsheet”. If set up correctly, Power BI gives budget managers as well as finance teams s the ability to drill down into numbers, do their own comparative analyses, and draw whatever graphs they like.

Power Query is freely available in Excel 2010 and above. Power BI is free to play with but comes with a small additional cost if you want to use it collaboratively within an organisation. Both are relatively easy to learn – you can get great results without learning any programming language. So you won’t get stuck with the issue that “So-and-So built us this complicated workbook with VBA and it broke after they left so we can’t fix it”.

Can you do a “reinstall” of your existing system?

This could be suitable where the system is capable of doing what you want but people aren’t using it properly. It could also be combined with bringing in a new add-on (for example a web based purchase order system).

Do what you would do with a new system. Talk to users and stakeholders, draw up a specification, and assemble a project team. Spend some time mapping workflows, and identifying weak spots and inefficiencies. Ask your existing provider how they can help solve these.

As most of these steps are necessary for a new finance system, this isn’t a waste of time. It doesn’t always work, particularly if the provider doesn’t want to play ball. However, you strengthen your business case for a new accounting system if you’ve tried to make the existing system work. And you’ll probably identify issues that might hamper a successful system implementation.

In summary – is this sanity or vanity?

I need to have (or to understand) a compelling reason for changing the system that the steps above don’t address. Good reasons could be;  

  • Outgrowing the existing system (or provider). That is, the volume of transactions or complexity of business means you need to overhaul the infrastructure
  • A merger (I have produced accounts from two separate systems before and it is NOT FUN)
  • Withdrawal of support / development from your current provider

I’ve got lots of experience in finance system implementation projects. See this page for examples of where I could help your business.

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