ACCOUNTING SOFTWARE FREQUENTLY ASKED QUESTIONS
What are the top hosted and non-hosted accounting software systems?
According to data collected by the Accounting Software Report, 9th Edition, the top five on-premise accounting software programs are?
- Oracle, including PeopleSoft and JD Edwards
- Microsoft Dynamics, including GP (Great Plains), Nav (Navision), SL (Solomon) and AX (Axapta)
- Sage, including MAS 90, MAS 200 and MAS 500
Also from Accounting Software Report, the top five software as a service or on-demand accounting software applications are:
What are the most important criteria when selecting an accounting software system?
A recent Deloitte and Touche study compared first-time ERP buyer’s criteria with second-time buyers to determine if experience made a difference in ranking the importance of accounting software selection criteria. While the most important factors to first-time buyers were cost and ease of both implementation and use, the second-time buyers ranked the support and experience of the vendor, followed by the software’s fit for the business as the most important decision making criteria. The study revealed that experienced buyers were more concerned about who they would be working with over time, rather than just the product being used. Interestingly enough, there was little correlation between size of the provider and comfort by the customer. Second time buyers found more comfort with high quality resources irrespective of the size of the firm. The results of this research suggest that buyers should take the time and effort to understand who is responsible for their implementation and who is responsible for product support. If you are using multiple ISV’s (independent software vendors), gain a clear understanding of the support methodologies and proposed staffing used by each vendor. Understand their software upgrade policies, the terms of your Service Level Agreement (SLA), if any, and the details behind your post implementation support.
Because implementation and support or so important, take the time to speak with other customers and, perhaps, even make a “test” support call. When checking out the implementation team’s references, try to specifically evaluate the proposed consultants for your project. Good project managers and lead consultants can have a dramatic effect on the outcome of the project. Although most firms do not want to commit specific individuals, you can get them to commit to a team with specific credentials such as project manager certification or high levels of product certification.
What will it cost to implement accounting software?
Because of all the variables, this is one of the most difficult questions that will require the most investigation and effort. The best approach is to develop a clear, frank communication with vendors and diligently work to ensure that all aspects of the financial system are covered. Accounting software licenses are just the beginning of the investment, don’t forget to include implementation costs (both consulting and any temporary employees that might be needed), training (both time and materials), hardware, networking infrastructure, support, maintenance, and software customizations. These costs need to be estimated not only for the primary software product, but also for any ancillary products that might be required.
Most accounting software publishers require that you pay annual maintenance costs in order to receive support (which is a separate charge) for their product. Read the fine print on the maintenance agreement because maintenance costs are frequently calculated based upon the list price of the product you are purchasing and list price may have little to do with what you are actually paying. Get the vendor to lock in the maintenance price for a period of time so you are not faced with any negative surprises and recurring price increases down the road. Remember, you will never have a stronger negotiating stance than just prior to the initial financial software purchase. Finally, don’t forget the hidden costs like ongoing training for new employees or upgrade costs for new versions. Both can add significantly to the total cost of ownership.
How do I get my CEO to approve a new accounting system purchase?
Accounting system purchase approvals are of course company (and CEO) specific, but the following guidelines may assist you.
- Avoid the software features discussion and focus on business benefits. If you state the new accounting software system benefits in terms of addressing strategic or current issues within the business, you are likely to find that your audience is much more accepting of your business case. Instead of “We need a new general ledger” try “A new accounting system would enable us to produce financial reports within 4 days of month end.”
- Do not get too carried away with cost benefit calculators or you may lose credibility. Try to stick with clearly attainable and measurable results. For example, “If we retain just three additional customers per year because of improved access to information, then the system will be at the cost recovery point of two years.”
- Keep your proposal requests specific and quantifiable. “We should budget $160,000 over the next two years to purchase and deploy the Really Great Account System Version 3.5.”
- Find a benefit that appeals to them personally. For instance, “I know with your background in finance, you would appreciate the cash management functionality that the new system will provide.” This will assist us in preventing sudden cash crunches and the need for rapid daily capital transfers.
- Keep your ego out of the process. “I know that the 'Supreme Accounting System' implementation may look great on my resume, AND all of the biggest companies are running it so it must be the right choice for me.” Checking with your peers can provide valuable insight, but, if you can get the same job done with a less expensive, less glamorous solution, then your company will be far ahead in the long run.
- Keep your executives involved and let them 'own' the solution. One of the best ways to ensure success is to get early and frequent buy in from the leaders of your company.
Will I really achieve the benefits pitched in the accounting software demonstrations?
Mostly likely, no. Software sales, marketing and advertising professionals often inject puffery and either unrealistic or unreasonable expectations to software buyers. From watching the software demonstrations and listening to the sales pitches, an accounting software buyer can get the impression that simply calling their friendly ERP publisher and, perhaps, writing a check, will result in a fully automated supply chain with real-time reporting and analysis, and a happy group of executives that are young, good looking and energetic. As with all advertising and sales pitches, the reality is, obviously different.
Visions of a fully automated accounting and supply chain with real-time information reporting are certainly attainable, but they take significant amounts of time, money and effort. Keep your objectives well defined, quantifiable and reasonable. Make sure that the goals are expressed in terms of business benefits and propose a verification method for the achievement of results. You will be much more satisfied with reaching these goals, than missing the loftier expectations set by the sales people.
Accounting Software FAQs
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