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How would you implement a new accounting system?
Implementing a major accounting system is big undertaking which needs a lot of planning.
Top Tips for System Implementations:
- Start by drawing up a specification of your requirements – what do you want to achieve with the new system, what is the scope of the system, where will cost savings be made, how could more information lead to better decision making?
- Get Buy In – its really important that the system gets the support of the Senior Management Team and that key staff are given the chance to put forward their ideas and are involved in the project. People are often resistant to change and getting them involved early will breakdown barriers to change.
- Rationalise – changing systems is an ideal chance to look at how can you do things differently and stop doing things that don’t add value, this will also reduce potential customisation requirements
- Allocate time to the project – If you don’t allocate time to the implementation project you will regret it later but that doesn’t mean you need to do everything yourself, budget to bring in temps and consultants to help
- Measure the savings and benefits – make sure you achieve your goals
By using simple project management processes, tools and techniques you can achieve the best results.
Formal methods of project management offer a framework to manage this process, providing a series of elements to manage the project through its life cycle. The key elements consist of:
• Defining the project accurately, systematically clarifying objectives
• Planning the project by splitting it up into manageable tasks and stages
• Executing the project by carrying out actions
• Controlling the project through its stages using project definition as a baseline
• Closing/Handing Over the Project
What do FD’s want their ERP system to do? Finance Transformation
The chart (Figure 8) is an extract from the CIMA report on Improving Decision Making in Organisations, it demonstrates the huge potential to reduce costs by implementing systems and shows how the role of FD’s is changing to become business partners participating in decision making.
So how does ERP reduce cost and improve profitability
Top Tips for your ERP Implementation:
- Start by drawing up a specification of your requirements – what do you want to achieve with the new system, what is the scope of the system, where will cost savings be made, how could more information lead to better decision making?
- Get Buy In – its really important that the ERP system gets the support of the Senior Management Team and that key staff are given the chance to put forward their ideas and are involved in the project. People are often resistant to change and getting them involved early will breakdown barriers to change.
- Rationalise – changing systems is an ideal chance to look at how can you do things differently and stop doing things that don’t add value, this will also reduce potential customisation requirements
- Allocate time to the project – If you don’t allocate time to the implementation project you will regret it later but that doesn’t mean you need to do everything yourself, budget to bring in temps and consultants to help
- Measure the savings and benefits – make sure you achieve your goals
steve@bicknells.net
9 steps to a perfect Xero implementation
- Discuss the requirements with the client and then document the project plan to deliver in the time-frame and budget. Understand which team members are accountable for what deliverables.
- Define the chart of accounts and tracking codes so that the right level of analysis can be obtained for tax, accounting and management control purposes.
- Ensure that the final trial balance from the legacy system is accurate and balances before you load into Xero. Get all the invoices that make up the accounts receivable and accounts payable balances and load them into Xero via invoice import.
- Get bank feeds working for all bank accounts – don’t import CSV file bank statements – this is where productivity is improved.
- Define your record keeping system – how do you find the payable invoice to match that in Xero – you can scan it and attach the image to the Xero transaction or keep a hardcopy or softcopy outside Xero. You want a system that is robust if it is inspected.
- Setup up your sales invoicing templates in word for invoices, statements and credit notes and upload into Xero. Use repeating invoices where possible to get the productivity. Set up inventory items for the things you sell and you can analyse volumes and margins by item for goods or services.
- Define when you will reconcile the bank statement – continuously, weekly etc. Setup bank rules to improve the speed and consistency of matching and coding. Understand the reconcile and cash coding screens. Understand how the reconciliation report works. Understand accounting transactions and how Xero presents a bank account.
- Decide if you need to use Accounts payable or can you code expenses after you have paid them.
- Review the report suite and get the reports you want into your favourites list.
david@graceaccountants.co.uk
What happens when you buy an ERP system?
I am often asked about ERP systems, so I have written this blog from my own experience, I am not saying Dynamics is better than any other system its just that it’s the only one I have worked with.
Enterprise Resource Planning systems such as Microsoft Dynamics NAV can be configured in many ways.
Prior to Order, you will probably have issued an RFP (Request for Proposal) and had a bid process. Typically a Dynamics system might start from £200k with probably half the cost or more being for consultancy.
Once you have selected your supplier, the first stage is Systems Design, I have worked on many of these, basically, you gather information on how the business works now, right down to fine detail such as how control accounts are used and what reports are currently used, then you consider what is possible with the new ERP system, what is the best way to perform tasks, how are results reported, some of the information will be flowcharted and a route map drawn up to get from where the business is now to the new ERP system. It is a highly detailed process, my reports were typically 200 pages long and the supplier and client sign off the report before configuration work starts.
Next the system experts get to work and make a mock up of the system and then workshops are done with senior management and directors to makesure the clients instructions have been correctly intrepreted, this process is then signed off.
The next stage is Training, normally immediately before the system goes live.
I hope this is helpful.
steve@bicknells.net
Business Accountant 