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Blog // 23/08/2017

10 tips for changing accounting or ERP systems

10 tips for changing accounting or ERP systems

Phil Wright - Menzies AccountantAs your business grows there will become a point in time where you need to upgrade your accounting and/or ERP systems to improve your reporting capability and insight to enable you to make smarter business decisions.

Changing systems can fill most business owners or directors with dread but there are steps you can take to make the process as seamless as possible. Phil Wright outlines our top 10 tips for getting a system change right.


1 – Agree why you need the change

binocularsOften the directors may feel they have outgrown their current system or that there will be limitations as the business grows. A change in ERP system impacts a number of different departments so all views should be considered. Agreeing as a team what the existing limitations are and the business impact they are having is crucial to get to the ‘must haves’ from a new offering.

2 – Prepare a detailed specification

Once you’ve decided that a change is required we’d recommend you take the opportunity to pool ideas from across the business. A period of ‘consultation’ to obtain everyone’s thoughts at a very micro level will assist with writing a detailed dossier. This specification should be a stand-alone document that contains the ‘must haves’, ‘needs’ and ‘wants’ from all facets of the business i.e. procurement, production, finance, sales and admin.

3 – Futureproof

Consider where the business is now and what the lifespan of a new system might be. This will impact the cost but if your ‘must haves’ are likely to change in a short timeframe then a higher capability product could be worth the investment now.

4 – Agree internal resources for the project

Using cash basis accountingA change of system needs someone internally to work with the system provider. This person needs to be the conduit for scoping, timings and deliverables. With several people in the business making requests it’s too difficult to capture and ensure all needs are met. One person with ownership of a central document that can be shared and reviewed with the system provider is recommended.

5 – Try a number of suppliers

If you have a specification document you can put out to ‘tender’ with a number of potential suppliers. Brand loyalty may be misplaced as different versions can bear no resemblance to your existing system and so it’s worth considering but don’t exclude new offerings. We would recommend discussing with customers and suppliers in your industry to find out systems that have worked well.

6 – Don’t underestimate how much time this will absorb

You may well be looking at the largest one off expenditure in the business’ lifespan but this doesn’t mean the service provider will do everything for you. To meet their commitment they will need information and deliverables from you in an agreed timeframe. If this isn’t met then it impacts the whole project schedule which could be expensive in time and money.

7 – Agree the scoping document and costs

Pro-rata contractsOnce the system provider has visited and put together a detailed scope this needs to be carefully reviewed to make sure you’re getting exactly what you thought you were (this could be a long document but shouldn’t be skimmed). We have seen clients suffer by not having a clear signed off scope agreed with the system provider and the project has not gone to plan.

This is the point that costs have to be agreed. This will normally be a combination of software cost, consultancy fees (for the install and any bespoke development) and training. We would also recommend you find out at the earliest point as to whether you require any additional hardware to run this new package which can significantly increase outlay.

8 – Agree milestones for payment

We would recommend that payment instalments follow a clear breakdown of the scope into smaller chunks. Sit down with the system provider throughout the process and agree where each deliverable has been met (this should be signed off by both parties) which would then trigger an invoice.

9 – Agree initial support

Fixed term contractsHaving support when your new system goes live is crucial. Don’t cut costs in this area. Work with the system provider to have a block of on-site support when you’ve gone live alongside typical telephone support to alleviate any issues as soon as possible. Disruption can have a real negative short term impact so paying for a consultant on site is worth it.

10 – Ongoing maintenance package

So you’ve invested in your new software which hopefully brings a new found utopia and more information and insight than you know what to do with, so here is where you need to agree a support package. This should be designed to include telephone support, report writing and regular system updates so your system is always running as well as it can be, so you can get the most out of it.

Phil Wright is a member of Menzies Advisory Team helping businesses to unlock their potential through systems and business analysis.

Find out more about Menzies advisory services.

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