As fractional CFOs and Controllers our team engages with organizations in either a short-term or part-time capacity. One area where we often lend our expertise is in ERP (Enterprise Resource Planning) and MRP (Material Requirements Planning) installations. Properly implementing and managing the accounting and finance elements of these systems requires a depth of financial acumen that is best suited for an experienced CFO to handle because there are wide reaching business implications to consider with this type of strategic execution.

In the many years that we have been helping clients with accounting systems conversions, we have noticed the same pitfalls tend to trip up organizations time and again. We are sharing those with you today in the hopes that calling them out can serve as cautionary lessons to help you avoid moving forward with an accounting system conversion that you will end up regretting later.

Top Accounting System Conversion Mistakes to Avoid

Find out more about the systems conversion mistakes that our consultants see far too many organizations make, and how to avoid them!

1. Using What’s Familiar

It might sound odd to say that a key problem we see is an organization using what is most familiar to them. However, too often we see a new Finance Director, Business Owner, Executive Director, or Treasurer decide to implement the accounting system that they used in their last role simply because they already know how to use it regardless of whether it fits the organization’s needs. Doing this may make the person feel more comfortable in the role, but it does not necessarily align the system with the organization’s needs and objectives. The better solution is to take the time to evaluate all possible options and select the system that is going to be the best fit even if the learning curve might be steeper at the start.

2. Seeking Perfection

Other times we will see organizations toss out a decent system that does perhaps 90% of what it needs to do because they want a system that will offer 100% of what they are looking for upfront. However, no system is perfect, which means that no matter what you choose, there will be some tradeoffs that you will need to consider, and you will likely need to be prepared to create some Excel workarounds or integrations with other tools to achieve your objectives.

3. Going Too Fast

Building on the last mistake, going too fast when looking for a fix can be an accounting conversion killer. When the system that you are using is falling short of your expectations in some areas but isn’t a total loss, be deliberate and methodical with your response. There are likely steps that can be taken to address some of the issues that you are experiencing without throwing it out entirely. To modify the old saying, “If it ain’t broke, slow down and step carefully.”

4. Chasing Trendiness

Don’t just use the accounting software system that “everyone else” is using to keep up with the industry. Just because an accounting system is popular doesn’t mean that it’s the right choice for your organization’s needs. Choose the platform that will check the most boxes for how your organization works and what you need to accomplish.

5. Appeasing Personal Preferences

Conversely, you do not want to pick the system that no one is using. If a third-party consultant comes in and recommends an obscure system that virtually no one is using, you will be tied to their expertise. You may also find it difficult to hire full-time employees once the consultant’s engagement has ended because some applicants will likely be scared off by the notion of needing to learn an entirely new system to do the job. Again, choose the system that is best for your entire organization, not a specific person within it (especially if that person isn’t going to be around very long).

6. Going to the Cloud

Cloud-based accounting has many benefits, but going to cloud will not magically solve all your accounting system problems on its own. If your organization decides to use cloud-based accounting software, make sure it’s because that’s the best fit for your needs, not simply because it’s popular.

> Compare Traditional Accounting Software & Cloud Accounting Software <

7. Competing Priorities

Do not undertake an accounting system conversion if you don’t have the resources to devote to doing it right. If you have other priorities competing for your time that are more important, it’s okay to hold off on migrating your systems for now. Otherwise, the implementation will become a distraction that could end up hamstringing both projects.

8. A Lack of Experience

One of the most important resources that an organization has is its human talent. When you are undertaking an accounting systems conversion you need to consider whether you have the right talent to support it during and after the conversion.

If you implement a shiny new system but don’t have the expertise in-house to take advantage of it properly once it’s in place, you will need to use a contract accounting service to make it work. There is certainly nothing wrong with utilizing an accounting consultant to train your team, but you should be aware of that requirement before getting started so you can accurately assess the cost and timeframe associated with the implementation.

9. Failing to Support the Conversion Holistically

In the same way that you need to ensure that you will have the right people in place after the conversion is finished, you need to also have the right accounting pieces in place to support the conversion as well.

If you’re not going to reinvent your accounting structure at the same time also, you simply aren’t going to maximize the benefits. Time and again we see organizations jump from one system to another expecting that move will solve their overall accounting problems, when the system was just one component that needed to be fixed. Use an accounting system conversion as the impetus to reevaluate your accounting policies, procedures, staffing, budgeting, internal controls, and reporting to maximize performance.

10. Trying to Save Money

Sometimes we see organizations decide to migrate to a new accounting system as a cost-saving measure exclusively, which is a mistake. Cost alone should never be your sole motivation for implementing a new accounting system, although it can certainly factor into the decision if you have a clear view of the cost horizons involved. When you consider the cost of growth, headcount, extended support, and other on-going system costs over the long run, it may make a great deal of sense to convert. However, there are better ways to cut short-term costs because a systems conversion will be more expensive and time-consuming in the short run.

A Better Approach

If these ten mistakes are the most common accounting conversion errors that we see, how can organizations take a better approach? The best advice that we can give is: Only consider a switch when your accounting system no longer serves your needs in terms of complexity, reporting capabilities, available integrations, or how your staff works today.

If your accounting system is falling short and there is no workaround or add-on available to bridge the gap between your organization’s needs and what it can offer, then (and only then!) should you start thinking about converting to a new system.

When you need someone to oversee your accounting system conversion, we can help! Our team has extensive experience with implementing and managing the financial systems that accompany ERP or MRP installations. As consulting CFOs and fractional Controllers we understand how to take both the 30,000-foot view as well as the ground-level view to get your company set up with the accounting system that is best for its unique needs and goals at all business levels. Let us help guide your financial systems upgrade or migration – find out more about our executive financial consulting services today!