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Don’t Fall For These Implementation Traps
By Sheldon Needle

When installing accounting software, there is never be a better day than when you sign the contract! From that point on it can become a long, rough (sometimes downhill) road to get the software installed and running.

Almost all software implementations that fail, do so for some pretty basic reasons:

1. The internal staff don’t have the skills
2. The software itself isn’t a good match
3. The overall hardware and operating system environment was poorly selected

There are a few things to keep in mind when going through an accounting software implementation.

The ultimate success of your engagement rests with the people who will be using the software. If they are not qualified bookkeepers and the engagement is complex, you will not succeed.

Every troubled engagement we’ve seen has some element of internal staffing problems. In one situation, a large $5 million + distributor of musical equipment struggled fiercely to get their accounting system installed. Their staff was asked repeatedly whether the books were in balance, to which the response was always “YES”.

Once the software was delivered and installed on the computers, the discrepancies in the books became immediately apparent. The accounts receivable detail listing was over $200,000 different than what the general ledger control account indicated. The new accounting system had been purchased to streamline inventory control – a task that it never accomplished since the data from the old accounting system had never been reconciled and the detail inventory listing was $1,000,000 off what the general ledger indicated should be found in the warehouse.

Unfortunately, staffing problems almost always seem to surface mid-way through an accounting software implementation. Software consultants are often shy about quizzing existing personnel regarding their skill level so they often do little to assess existing capabilities.

Here are some questions that you can ask yourself to see if existing staff have the skills required to operate a new accounting system.

Answering NO to any of these questions means you should take a close look at your internal staff prior to spending large amounts of money on a new accounting system:

• Is your existing accounting system reconcilable? Do the accounts payable and accounts receivable aging reports agree to the general ledger? (A new accounting package very rarely cures this problem unless your old system was so poorly written as to be constantly out-of-balance).
• Is bank reconciliation completed monthly?
• Are your accounting staff generating monthly financial statements that require little if any adjustment from your CPA firm?
• Is your staff computer literate? Have they previously used computer based accounting software or is this their first time using a computer?

Get copies of all needed reports prior to deciding on an accounting system. Pay your consultant to do a more in-depth demonstration than the “freebie” that most offer.

Never ever assume an accounting system will generate exactly the report you need! Give your reseller/consultant copies of critical reports and ask them to generate comparable ones from the system you are considering.

In some instances, it may be worthwhile to pay a small fee (usually less than $2,500 depending on the complexity) to have the consultants come in for a day to do a pro-forma setup of a live company. This way you can enter some actual data into the system and verify firsthand that you will be receiving all the reports that are critical to your business.

Tip: It is almost impossible to verify that accounting software will perform all the functions of your business during a free initial consultation with a consultant. The demonstrations where you are promised “the next version will fix that” or “we can customize the software to do that” are almost worthless. Pay your consultant a flat fee (50% up front / 50% when done) to do a more in-depth study and demonstration of the software you are considering purchasing.

No software package is going to meet every one of your wish-list items – but it is better to find out up front than after spending $20,000+ for a new accounting system. If the consultant promises to modify the software to perform a certain critical function – hold back as much money as possible until the modifications are completed to your satisfaction.

Verify that the software handles the tricky parts of the business process
Never be afraid to ask questions about what functions the accounting software will perform. Do not assume that because several other systems have handled a function easily that every package will be able to do that. Custom modifications after the initial package is installed can be extremely expensive.

It is usually safe to assume that the basic features such as financial statements, general ledgers and aging reports will be very similar from software package to software package. If your company requires tricky functionality such as long part numbers within inventory – always verify the functionality firsthand as modification after the system has been installed will be costly and may introduce severe delays into your implementation.

Note: In many instances modifications have been “pre-written” for the most popular accounting software systems. Functionality such as cash basis accounting is often available as a pre-packaged add-on for $1,500 versus several thousand dollars (and potentially months of delays) to have the same feature custom-written for your company. A quick search of the Internet search engines usually will produce names of companies offering modifications.

The wrong hardware or operating system can bring doom your implementation
The most successful implementations use generic and widely used hardware and operating system configurations. When choosing operating systems it pays to stay with the most popular configurations.

It is always best to go with the recommendations put forth by your software consultant. Overzealous and adventurous networking consultants often want to put your company on the cutting edge of technology for the sake of their learning experience. You will have a much cleaner and successful implementation going with a “vanilla” hardware and networking setup.

Conclusion
A large dose of common sense goes a long way toward insuring a successful installation. It is virtually impossible to determine in a free initial consultation whether an accounting package will accomplish all the tasks that you require.

In situations where certain functions are vitally important to your business, do not hesitate to pay the consultants to come in and prove that the desired functionality exists in their system. Whenever modifications are promised to make the software work, insist on holding back a large amount of the final payment until the modifications are implemented. This holdback may be the only way you can insure the enhancements are ever implemented to your satisfaction.

About Sheldon Needle
Sheldon Needle CTS President, has been evaluating construction software vendors since 1983. Your free 10-15 minute Smart Shortlist Consult™ with Sheldon is your opportunity to find out latest information about accounting software and get all of your questions answered. Download the Accounting Software Selection Kit now.

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