Automating your bookkeeping and accounting processes has never been easy, but it’s never been easier than it is today. Whether your organisation is a start-up considering its options for the first time, or a more established entity that has outgrown its current approach – be it based on paper, spreadsheets, a mixture of the two, or a dedicated accounting system that no longer meets your needs – somewhere out there, there is a solution that will meet almost all, if not all of your needs. You just need to find it, says FSN contributing editor, Lesley Meall.
How you do this will depend, to some extent, on where you are starting from, where you want to end up, and how much help you want to enlist along the way. But all of your journeys should begin with the same first step: identifying the processes you undertake today and may need to undertake tomorrow, so that you can clarify your needs. Are you looking for something that can be used by somebody with basic bookkeeping needs and little or no related experience (such as a cashbook or ‘money management’ software), or a more fully featured system (with double-entry bookkeeping), which has been designed for users with finance expertise?
There are a lot of systems out there and all of them will handle basic bookkeeping; many will do a great deal more; but as there are lots of potential variations on the ‘bookkeeping and accounting’ theme, and no ‘one size fits all’ solution, even the smallest and most uncomplicated organisation needs to be clear about its requirements. You may find it helps to focus your mind, and keep the selection process organised, if you enlist the support of a spreadsheet that lists generic features (and then modify it), or create your own detailing ‘must-have’ facilities and features.
These could include:
- credit control;
- data import and export (to and from spreadsheets, and other software tools) management reporting;
- electronic banking;
- job costing;
- not-for-profit accounting;
- multi-currency facilities;
- multi-user system;
- online tax filings;
- purchase order processing;
- remote (online) access to systems and data;
- sales order processing;
- stock handling;
- the range of add-on tools and software available;
- VAT handling;
- plus any other capabilities you require.
Bookkeeping and accounting systems can do a lot more than record transactions, so pay particular attention to management reports: if certain information is crucial to the running of your business, you want to choose a system that will provide you with this as quickly and easily as possible. Some systems will create only pre-defined management reports, and how easily you can tweak them to meet your needs (if at all) will vary across different product offerings. Other systems will offer total flexibility, which could be very important if you have needs that are specific to your industry or organisation.
What is your ideal solution?
Bearing in mind the shortcomings of your current approach, the aim is to draw up a checklist that details your ideal solution, and assigns priorities, so that you can measure a variety of offerings against this. Depending on the size or complexity of your organisation, and your knowledge of bookkeeping and accounting, this may be a (more or less) sizeable undertaking, and if the notion of even attempting it makes you uncomfortable, or the scale of the undertaking seems vast, you may need specialist help and support, or recommendations.
This can come from various sources: your bank, an external bookkeeper or accountant, colleagues in similar organisations in your sector, a trade organisation that serves your sector, or specialist business and/or IT consultants. Whatever approach you take, you may want to check with your external accountant, to make sure that they are happy to use, or work with the output from the systems that end up on your shortlist; if you follow their recommendation you may find this can reduce the cost of producing your year-end accounts or annual audit.
The bigger, more complex and multi-facetted an organisation is, the more demanding the process of defining, measuring and ranking all of the necessary selection criteria will be. In addition to product functionality (which can potentially create a vast list of requirements), you also need to focus on:
- Product flexibility;
- Product technology requirements;
- Role of existing systems and software;
- Process fit;
- Fit with corporate strategy – short term and long term;
- Vendor service and support;
- Vendor corporate strategy;
- Vendor diligence and viability;
- Vendor product development strategy.
All of these things require consideration from a variety of perspectives, and can raise a range of interoperability issues, plus strategic and operational challenges. Some will be more less or significant to you (and other members of your organisation). But even if you decide to hand some or all of the initial selection process over to an external specialist, you may still need to put together a multi-disciplinary team within your organisation, to help ensure that the evaluation of processes and definition of needs is undertaken in a suitably broad context.
Depending on the size of your organisation, and whether or not you are involving consultants, you can proceed from this point, to draw up a shortlist, in a variety of ways. You could use a feature comparison site to help you weed out the no-hopers, send vendors requests for information and work from those, consider the recommendations of a consultant, or a list of possibilities drawn up by an in-house individual or team.
Is it as good as it looks?
Once you have a shortlist to work from, you will need to move from the theoretical stage to the practical stage of the selection process, and get a hands-on feel for the software: there is no substitute for personal experience. At one time, this would have demanded visits from sales people or visits to trade shows, and both are still possibilities; but if you have a PC and internet access, you can go exploring (and evaluating) online, where myriad providers of bookkeeping and accounting systems offer assisted and unassisted demonstrations and trial downloads.
At this is the stage you will notice ease of use. As well as the very subjective feel you get for whether or not you like the system, consider factors relating to your business. Do you want to set defaults for fields, or add new fields and controls, and if so, how easily will you be able to do so? Do you want the system to mirror your working practices, or be able to tweak screens to reflect your working documents? Do you want to access the system remotely, if you are working from home, or sales staff are on the road, for example? And involve those who will be using the system, or you may discover the hard way that things are not as simple as you thought.
Although some of you will be large enough to merit visits from vendors demonstrating their products, many of you are going to be looking at online demos, or trial downloads, for both ‘on-premise’ systems (that will ultimately need to be installed, maintained and upgraded, on your computer equipment) and ‘on-demand’ systems (that live on the servers of third party suppliers and are accessed using the internet) – though it is worth noting, that remote online access to bookkeeping and accounting software, and the associated business and financial data, are not unique to on-demand Software as a Service (SaaS) offerings.
On-premise or on-demand?
Choosing between the on-premise and on-demand delivery approaches is an important part of the selection process. There is much debate about their relative merits, and their potential advantages and disadvantages. The online approach may offer accessibility, flexibility, scalability, fixed costs, reduced maintenance, and rapid implementation times, but thornier issues such as information security and privacy, must also be factored into the decision-making process – and although each organisation will prioritise these differently, they must all be given some thought.
Exercise due diligence. Think about the long-term viability issues of the supplier and its product line: there are a lot of start-ups out there, and they are not all resourced (financially or otherwise) to the same degree. Find out about the safety and security of your business critical data. An organisation dedicated to providing Software as a Service may well have much tighter privacy and security controls and procedures than your organisation, but you still need to check on: what the service providers’ backup provisions are? How often backups take place? What business continuity plans are in place?
Compare cost carefully – and pay attention to the small print, particularly when it comes to support and the Service Level Agreement (SLA) of SaaS offerings. You need to know what sort of support is available, when, how you can access it, and what the ratio of support staff to end-users is? Ask yourself, and the service provider, some difficult questions, such as: What system availability does the service level agreement guarantee and what comfort are the penalties likely to be in the event of failure? How often and how long are scheduled maintenance windows?
Unless you totally abdicate responsibility for selecting your bookkeeping or accounting systems, there is no getting away from the fact that it is a is a multi-faceted and relatively complex decision making process. Overlapping products, integration issues, system compatibility and incompatibility, vendor hype, complex software licensing schemes, tricky service level agreements, are just a few of the many complications that could trip you up along the way; so give it the time and attention it merits. If you get the process wrong the results can range from disappointing to devastating, but if you get it right, there are enormous benefits.