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  • Mindy Viteri

Pitfalls to Avoid when Implementing an Accounting System

Either you are starting up a new business, need to take that old hand-written or Excel finance tracking system out to pasture, or have outgrown your old ERP, it is time for a system implementation. If you have never gone through this before, you can fall into the trap of listening to the sales person for the ERP tell you how very easy it will be. I have implemented many systems over the years and can tell you, it rarely goes without any problems or near as quickly as you were promised. Not to say that things can't go really well, but just like a bride preparing for that perfect wedding day, you have to plan for the worst and pray for the best.

To help you along your way, I want to give you some areas to watch out and plan for to help it to be a much more smooth transition. (Of course, you can always shoot me a note if you can use my help.)

I am a huge advocate for system integrations so I will touch on this here and there. The less manual keying of data, the more quality data you will have. Before you choose any program to go along with your ERP, see if it will integrate. All ERPs have lists of partner programs that integrate with their system and the costs of such integrations (these are not always free.) Note that these integrations can change the way your ERP runs so it is good to talk to all during the implementation process if possible.

Let's start with your Chart of Accounts. Be sure that you are ready to import where you want to be in the future. If you miss the following, long-term issues can ensue.

  • Use account numbers if at all possible. It helps to keep things clear and makes data entry quicker.

  • Don't use 2 or 3-digit numbers. Go with 5 or 6 to leave room for growth. Use a standard layout (10000's - assets, 20000's - liabilities, 30000's - equity, 40000's revenue, 50000's - cost of good sold, 60000-80000 - operating expenses and 90000's as other income or expenses.)

  • Assign accounts at the 100 level (IE Operating Cash Account = 10100). This leaves room for additional accounts as you grow and expand either in size or complexity.

  • Get rid of unused or unnecessary accounts

  • Include descriptions if possible to clarify for your accounting staff later when they need to enter data

  • If possible, have your accountant review the accounts to be sure everything is included, coded properly and assigned to the correct account types (IE Current Assets, Long-term liabilities, etc.) This makes a big difference in pulling reports later and if they are created incorrectly this can cause large long-term problems.

If you are a manufacturer or reseller, be sure your Items are ready for import. You don't want to have to change these later as they will impact the flow of data from one section of your programs to others... including connecting systems and programs.

  • Have a complete and detailed item list

  • Assign item numbers if you have not done so but be sure you think ahead 5-10 years for growth and complexity

  • If you are a manufacturer, be sure to have a Build of Materials (BoM) list ready for import

  • Resellers, be sure all item lists correlate with your vendor item numbers or you have a mapping from one to the other

  • If your ERP includes a connector to an online sales program, be sure to have good images ready. Many ERPs allow images to post to the items for clarification and good data flow.

Let me start this next section by saying that some ERPs have a lot of bells and whistles that incorporate all-in-one packages. Be careful here. Just because they include a payroll, inventory, CRM, etc. system doesn't mean you should use it. My preference is to go with systems that specialize. Meaning, if a system is all about payroll, you will probably run across far fewer issues than if you use a payroll add-on that is there just because they want to be able to say they have it.

So, Payroll. Many people forget about this section until the last minute and then have to scramble to get HR and payroll setup.

  • Decide on whether you are going to go with the ERP's payroll service or another program - do they integrate? What is the process?

  • If you use an outside program that integrates with your ERP, find out which program is the "master" so you know when they sync up (normally overnight) which system will override the other. This can get annoying if you are not prepared.

Clarity. Be thorough and transparent with your implementation team. They have to know all ways you want to use your ERP including growth ideas, pain points and customizations. Most ERP implementations are delayed because of lack of communication so be sure you do all you can to help them to see your needs and vision.

Use your team members effectively. Be sure that all team members (leaders) are involved in the ERP implementation. Normally all departments are affected so each should have input. Listen to your team... if you do not, you will be setting yourself up for some disgruntled users of the system later.

Train, train, train. Business leaders know the value of training but many times we fail to plan for this training. Build training dates and strategies into your implementation calendar. Think through who will be your super users and be sure to cross-train in case that amazing Accounts Payable team member wins the lottery.

Limit admins and set roles appropriately. Most ERPs are setup for various "roles." This is different than a user. Joe is a user but he can have many roles. One of these roles is always the "Admin;" however, you want to limit those with this role. Admin's have way too much freedom in an ERP including deletions that can cause huge waterfall errors within a system. Think through each position on your team and what their needs are. Limit access to confidential information but be sure they have all the tools they need to do their job. This is where the training I mentioned comes in. Have your team test the system and work through regular processes so you can bring up issues and problems to your implementation team.

These are just some of the issues that come up during an implementation. Best advice I can give is to have both a systems and finance expert on your side to watch the process and help you walk through step by step... even if it is just for the length of the implementation... it's worth it.

If you would like our assistance, feel free to complete the pricing questionnaire. Thanks!

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