It’s a Finance System Jim…. but not what we expected.

2nd September 2013

So your new shiny financial system is up and running but is it delivering what it said on the tin asks FSN writer Trevor Warrs? 





Despite the time and money invested in choosing a new system to ensure organisational fit, user friendliness, the technical capacity to both implement and maintain it and the myriad other selection criteria that were used during the selection process is it actually delivering the benefits you expected?

The answer to this question may take time to emerge and will depend on the size and complexity of the business and also whether the original expectations were reasonable or not. Problems can arise for a wide variety of reasons but a key decision is the choice of the project leader. Rather than debate the pros and cons on the choice of project leader, should he or she have a technical background or should they be an accountant, in this short article I will look at the practical impact. Lack of space precludes fully exploring the issues but I hope to provide food for thought and encourage readers to create their own checklist when they arrive at the point where a systems change is needed. I have to declare my hand and say that as accountant I am firmly in the finance camp on this. Technical support is vital to success but the processes have to be usable to both endure and deliver the benefits.

Problems may only emerge over time. I remember joining a three year old business to be told by the staff that the finance system was not fit for purpose even though at the time the software was one of the best-selling systems in the UK. Investigation revealed that the system had been configured with limited functionality, the setup had not been documented and all the original team had left the business. I was also surprised that no one had called the third party supplier for support! A little training and switching on the required functionality cured the problem.

Lesson 1. - Document what you do and make sure you involve the supplier when problems are encountered.

Another organisation I worked with had several problems that had been created at system implementation and although there had been financial involvement it was clear that the technical lead held sway.

The major issue for month end close was that of sales processing. The organisation had a specialist (and proprietary) database that collected all its sales which were then fed through a piece of conversion software for input into the accounting system. The database was maintained by the operating units but over time as the organisation downsized updating it became unwieldy and impractical. In addition IT was also downsized leading to problems with system maintenance as much of the information was hard coded. Miscodings and reconciliation became a major issue for the finance department. With hindsight the decision to not bring sales into the main accounting software at implementation was a serious error.

Lesson 2. - Look to the future not just the existing process.

VAT was also a problem. The organisation was specialist in nature and although a specialist VAT scheme was available as an option within the software it was decided to continue with existing practices. This led to some complex MS Excel spreadsheets and further reconciliation problems with a sales system that was already starting to fail. So rather than just requesting a system VAT report when required the preparatory work for the VAT return  took on a dimension all of its own.

Lesson 3. - There are times when changing the process to suit the software is the right decision.

One other irritating issue was the workflow system for approving invoices. It had been set up to mirror the technical processes within the software rather than the actual way the process was carried out in the business leading to more clicks than necessary to approve an invoice. Easily sorted out but should never have been implemented in the way it was setup which ignored the internal processes of the business.

Lesson 4. - Ensure you get the benefits of workflow.

Finally budgeting and forecasting were big issues as the business had purchased with the accounting system a complex add-on that was difficult to use and training of staff had been inadequate. The expert user was unfortunately off on long term sick leave meaning that support was required from the software supplier. It became clear during this time that this product was not core to their business and supporting it was a problem for them. We went back to using MS Excel which everyone understood.

Lesson 5. - Keep processes that are widely used across the business as simple as possible.

With the exception of example 1 where I do not know who led the implementation all the other problems were the result of ensuring technical compliance without considering the short to medium term outcome on the financial processes. Having expressed a preference for a finance lead it is important that that person not only fully understands the business but also has the ability to foresee problems In addition, they should have the courage to make difficult decisions which may initially not be very popular but in the long term are in the best interests of the business. It is also important to involve as many occasional users as possible during implementation to ensure that processes are simplified. These users do not have the time to reach for the manual every time they are confronted with what should be a simple task.