BEST PRACTICES TO CHOOSE THE BEST ACCOUNTING SOFTWARE

Accounting software selection starts with the detail study of current business practices, followed by gap analysis, requirements definition, ranking of the requirements, preparation of detailed request for proposal, evaluation and short listing of the vendors on the defined criteria, performance of the cost and benefit analysis and finally selection of the best accounting software. Selection of the right accounting software for your organization is an important decision which should not be taken lightly. An accurate decision regarding the selection of the accounting software would help in the reduction of costs of your company with the ready access to accurate information. The decision should be taken .The following tips give the insight for taking a thoughtful decision.

Documentation of the current business requirements and mapping of the future requirements should be undertaken to highlight any weaknesses in the system. Since accounting software is a business initiative, you should first document your current business processes and analysis should include preparation of to-be state system requirements.Prepare a detailed analysis regarding volume of data, need for collaborating working, available resources and most importantly time frame for implementation and data migration from the legacy system.

Determine and evaluate the key performance indicators that will be used to measure the accounting system’s effectiveness and efficiency. Compare the proposals of the vendors with the set criteria and give them opportunity to demonstrate it.

The criteria may vary according to the requirements of your company but consider at minimum;

Experience and expertise of the vendor

Attend the training sessions being conducted by the vendor for its clients

Consider the reputation of the vendor in the market

Prepare a comprehensive evaluation sheet for evaluating the vendors which would allow you to compare and contrast one system with another effectively.

Client recommendations and references are vital for selecting right accounting package. Endorsement of the client along with the vendor’s reputation may help you in taking right decision. But do not over rely on personal recommendation rather pay a visit to the client of the vendor where the product has been implemented and in running condition.Engage the company's financial manager in the decisions.

Set a realistic budget according to the needs of your organization. Usually companies spend about seven to ten percent of their annual revenue on Enterprise Resource Planning (ERP) systems. One of the major factors for the failure of planned implementation of accounting software is not to consider the hidden costs of training, support and staffing. Compile project milestones along with the cost to be incurred on every milestone.

Hiring an independent consultant can assist you in preparing your company’s requirements and need analysis in more detail. Likewise selection of the accounting package, selection of a consultant should be done carefully. The consultant will help you in drafting the comprehensive evaluation performa about the product .

7. Adequate support and co-operation of executive management is required for the selection of good accounting software. A full time project manager should be assigned to oversee all the functions related to selection of the software. His responsibilities should include defining objectives, finding ways to achieve set objectives and ensuring that everyone in the organization knows their roles and responsibilities.

Good implementation is also necessary along with the good accounting software. When going for off the shelf package, also check for the well reputed implementation firms.

9. Once decided about the software, ensure that all the documents relating to licensing of the software are included in the contract package. A well drafted agreement will help you a lot in purchasing and implementing the right choice.

• Get the contract reviewed from the legal counsel before signing. Do not forget to read any hidden clauses which may be used for exploitation. Evaluate the contract in terms of monitoring costs, payment schedule, defined responsibilities and deliverables of the vendor, going concern of the vendors’ business.