How do you decide what your company requires from its finance system?
With hybrid working becoming commonplace over the last few years, companies are continuing to invest in technology to facilitate flexible working. Last year a Gartner report revealed that 92% of CFOs plan to increase their investment in finance technology,to increase adaptability and efficiency in this new working environment.
But while many CFOs have decided to invest in new technology, it can be harder to know what features and services to keep an eye on when choosing your finance system. Here we set out some essentials to help you evaluate your priorities and how different finance and accounting systems fit into today’s business landscape.
Identify and prioritise your needs
The first step on the hunt for a new finance system is to identify the needs of your finance function. This is where you pinpoint your key pain points and what areas of your finance function are in most need of improvement. For instance, have you highlighted a need to improve the ease of using your system? Do you currently have to manually rekey data from one system into another? Do you have issues accessing real-time data for different departments, locations and entities?
Not only does this evaluation need to determine your finance team’s requirements but also establishes how the new system needs to connect with your existing application infrastructure and platforms – this is vital for achieving a successful and seamless implementation. If you can outline a detailed needs analysis from the outset, with a specific list of key factors and requirements, then you can focus your search on the best solutions for you.
While not investing in new finance systems can cost you more in the longer term, the same consequence applies to opting for the ‘wrong’ one due to an unfocussed search strategy.
What’s the size and complexity of your business?
The size of your business can determine what accounting system you opt for; different systems are designed for different-sized companies. As a result, you need to try and avoid mixing up small business software with mid-tier software or with ERP systems designed for larger enterprises.
If you’re expecting to grow and expand rapidly in the coming years, for instance, you need to pick a solution that can scale with your plans; can you find an adaptable solution that meets your needs both now and in a few years’ time?
Look at the system’s features and ask yourself if it can evolve to process greater transaction volumes as your business grows.
And it’s not just about the size of your business, but also its complexity and processes. Not only might you have to consolidate accounts across many subsidiaries, but some subsidiaries may operate in different regions and use different currencies. In this instance, you will need to consider whether the software can deliver multi-entity accounting and support and whether it can negotiate the tricky task of managing multiple currencies as your company moves into new geographies.
In addition to handling complexities related to multiple entities or currencies, the level of detail in reporting and analysis also increases as your business grows. Tracking and categorising granular elements associated with departments, cost centres, service/product lines, and team structures is required to give a true picture of business performance. Real-time, multi-dimensional reporting is required to accurately inform business decisions as easily and quickly as possible.
More expensive doesn’t equate to the best solution
Another decision that can sway what option you go for is budget. While you may wish to have software that can do ‘everything’, these solutions can be more expensive. And although larger ERP systems might seem like the answer to your problems, in many instances they are not.
Mid-sized organisations, for example, will not need all the capabilities that an ERP system offers, which is money going down the drain. Then there’s the ERP implementation nightmare – which can be slow and complicated.
Analyse which solutions are affordable to you – and then see which best fits your criteria from this list and gives you the best return on investment.
Benchmark
After examining all of the above criteria, it’s time to benchmark your potential options. Much like Apple does with its products, it’s worth writing out all of the different product features and seeing how they compare to each other. You can then score each factor and rank the solutions based on the total score. This creates a data-driven approach which makes choosing your software provider a more hassle-free and seamless process.
For example, you could assess:
- What is the level and quality of customer support on offer?
- What is the ongoing cost to support and maintain the system?
- How easy is the system to use and how does your team rate the overall user experience (if you have trialled the product)?
It’s also imperative to do your due diligence and assess each platform’s security offerings and disaster recovery capabilities. Cyberattacks and ransomware, in particular, are on the rise, so having greater confidence you’ll be able to regain access to systems or encrypt data to protect it from breaches is a key consideration.
Prioritising your accounting software requirements
Attempting to find finance software that caters for all of your accounting needs is no easy feat. If the above steps have still failed to pick out a winner, it might come down to having to prioritise the requirements and features most vital for your finance team and business operations.
From automating manual data entry tasks to accessing real-time finance reporting, there is a whole range of finance systems on the market that offer different capabilities and that suit businesses of different sizes, in different markets, and with different growth ambitions. Choosing the right one is a critical investment that can directly influence how well your business performs and how quickly it will grow.
