Task:
A needs assessment provides a deep analysis of the present and future viability of your current system. The insights gained through an assessment will help identify system weaknesses or potential threats that are critical to maintaining a competitive position and financial stability. A systematic approach can then be developed, aimed at continual improvement and system utilization, and in alignment with your business goals and objectives. An assessment should include the following:
Create a selection committee
Form a committee that provides representation from all areas of your institution. These individuals will help establish a clear and consistent understanding of the objectives you will focus on when selecting a new system. Ensure all committee members have the knowledge, skills, and time available to carry out the selection tasks.
Form a committee that provides representation from all areas of your institution. These individuals will help establish a clear and consistent understanding of the objectives you will focus on when selecting a new system. Ensure all committee members have the knowledge, skills, and time available to carry out the selection tasks.
Hold a kickoff meeting
Conduct a project kickoff meeting to provide an overview of the selection approach, including strategy and anticipated timelines. Timelines should allow selection tasks to be completed without being too short and rushed, or too long and confusing.
Conduct a project kickoff meeting to provide an overview of the selection approach, including strategy and anticipated timelines. Timelines should allow selection tasks to be completed without being too short and rushed, or too long and confusing.
Gather your data
Review your current contracts and supporting documents, including invoices and related information such as monthly transaction reports. Track your key business initiatives and critical success factors.
Review your current contracts and supporting documents, including invoices and related information such as monthly transaction reports. Track your key business initiatives and critical success factors.
Analyze strategic drivers
Perform a strengths, weaknesses, opportunities, and threats (SWOT) analysis of your current system. Afterwards,consider how a system change will allow your institution to address system weaknesses or potential threats. Set the stage for future actions and form the foundation for selecting the right system and implementing and achieving your desired strategic initiatives.
Perform a strengths, weaknesses, opportunities, and threats (SWOT) analysis of your current system. Afterwards,consider how a system change will allow your institution to address system weaknesses or potential threats. Set the stage for future actions and form the foundation for selecting the right system and implementing and achieving your desired strategic initiatives.
Identify key objectives
Assess the data gathered. Then hold team conference calls to define the ideals of a new system and the key objectives to be achieved through the selection process, and identify the products to be included in the review. Include an evaluation of integration/interface needs or opportunities in existence, concerns and limitations with your current vendor, and
additional opportunities.
Assess the data gathered. Then hold team conference calls to define the ideals of a new system and the key objectives to be achieved through the selection process, and identify the products to be included in the review. Include an evaluation of integration/interface needs or opportunities in existence, concerns and limitations with your current vendor, and
additional opportunities.
Define functional requirements
Identify the functional requirements your institution needs in a system, such as simplified reporting, real-time processing, seamless integration, or single sign-on access. Your requirements should be defined through a process that identifies the
business functions and applications that support strategic initiatives such as improving operational efficiency, reducing technology costs, and streamlining workflows.
Identify the functional requirements your institution needs in a system, such as simplified reporting, real-time processing, seamless integration, or single sign-on access. Your requirements should be defined through a process that identifies the
business functions and applications that support strategic initiatives such as improving operational efficiency, reducing technology costs, and streamlining workflows.
Conduct a cost-benefit analysis
Assess the benefits and drawbacks of an in-house versus an outsourced system by developing a systematic cost-benefit analysis to assure decisions are based on a clear-cut picture of all options, costs, and benefits.
Assess the benefits and drawbacks of an in-house versus an outsourced system by developing a systematic cost-benefit analysis to assure decisions are based on a clear-cut picture of all options, costs, and benefits.
Set expectations
Pinpoint your most critical issues and areas for improvement. Take into account how a system change could affect other strategic initiatives, such as large technology projects, organizational changes, mergers and acquisitions, or divestitures.
Ensure expectations are clear and concise and that everyone remains focused on the defined functional requirements.
Pinpoint your most critical issues and areas for improvement. Take into account how a system change could affect other strategic initiatives, such as large technology projects, organizational changes, mergers and acquisitions, or divestitures.
Ensure expectations are clear and concise and that everyone remains focused on the defined functional requirements.
Contact your current vendor
Issue a letter of non-renewal to your current vendor for the system you are looking to replace, and request a quote for deconversion costs and early termination fees, if applicable. Review data storage on your current system, determine whether any can be purged based upon your data retention policy, and request a quote for conversion of the data to a new system.
Issue a letter of non-renewal to your current vendor for the system you are looking to replace, and request a quote for deconversion costs and early termination fees, if applicable. Review data storage on your current system, determine whether any can be purged based upon your data retention policy, and request a quote for conversion of the data to a new system.
2. Complete a system analysis
After an assessment has been completed, the system analysis can begin. Data gathered during the assessment can be used in the analysis to determine the best system – both functionally and financially – for the future. A thorough analysis also aligns the vendor relationship with your business strategy. An analysis should include the following:
After an assessment has been completed, the system analysis can begin. Data gathered during the assessment can be used in the analysis to determine the best system – both functionally and financially – for the future. A thorough analysis also aligns the vendor relationship with your business strategy. An analysis should include the following:
Conduct vendor pre-selection
Initiate contact with vendors that best fit with your defined requirements and expectations to gather preliminary information, such as timeline and conversion dates. Following your conversations, identify the systems that most closely align with your requirements and finalize the vendor participant list.
Initiate contact with vendors that best fit with your defined requirements and expectations to gather preliminary information, such as timeline and conversion dates. Following your conversations, identify the systems that most closely align with your requirements and finalize the vendor participant list.
Develop a Request for Proposal
Issue a Request for Proposal (RFP) to the selected vendors. An RFP is a critical communication tool that outlines the requirements and expectations identified in the assessment phase. Unless there have been significant issues with an existing vendor, you will want to give them the opportunity to submit a proposal. The best proposals will be received when your RFP clearly defines your selection criteria and expectations.
Issue a Request for Proposal (RFP) to the selected vendors. An RFP is a critical communication tool that outlines the requirements and expectations identified in the assessment phase. Unless there have been significant issues with an existing vendor, you will want to give them the opportunity to submit a proposal. The best proposals will be received when your RFP clearly defines your selection criteria and expectations.
Establish vendor requirements
Determine specific criteria to discuss with participating vendors and host conference calls with them to go over requirements and expectations. Gather any follow-up questions from participating vendors and provide any requested background materials. Then send a follow-up document to each participating vendor containing responses to all of the questions you received.
Determine specific criteria to discuss with participating vendors and host conference calls with them to go over requirements and expectations. Gather any follow-up questions from participating vendors and provide any requested background materials. Then send a follow-up document to each participating vendor containing responses to all of the questions you received.
Evaluate proposals
Analyze responses to your RFP carefully to determine whether they meet your business objectives, pricing expectations, and functional requirements. Assess the viability and stated functionality, determine system flexibility, evaluate operational performance, and review program management. Then, as a committee, come to an agreement on vendor finalists.
Analyze responses to your RFP carefully to determine whether they meet your business objectives, pricing expectations, and functional requirements. Assess the viability and stated functionality, determine system flexibility, evaluate operational performance, and review program management. Then, as a committee, come to an agreement on vendor finalists.
Conduct on-site presentations
Hold vendor presentations on site and evaluate demonstrated functionality. Complete an evaluation of each vendor’s demonstrated system and prepare a list of follow-up questions, items for further discussion, and additional demonstrations to review. Provide the list of requests to the respective vendors and resolve all inquiries.
Hold vendor presentations on site and evaluate demonstrated functionality. Complete an evaluation of each vendor’s demonstrated system and prepare a list of follow-up questions, items for further discussion, and additional demonstrations to review. Provide the list of requests to the respective vendors and resolve all inquiries.
3. Perform due diligence
Once the analysis has been completed, vendor due diligence should be performed. Due diligence serves as a verification and analysis tool, providing assurance that the selected vendor finalists meet the needs of your institution and that you understand any risks posed by the relationship. Due diligence should include the following:
Once the analysis has been completed, vendor due diligence should be performed. Due diligence serves as a verification and analysis tool, providing assurance that the selected vendor finalists meet the needs of your institution and that you understand any risks posed by the relationship. Due diligence should include the following:
Conduct reference calls
Complete reference checks with external organizations and agencies and conduct calls with clients of the vendor to evaluate the vendor’s depth of resources and previous experience. Use your findings to assess the vendor’s reputation, including history of client complaints or litigation, and to learn the experiences of clients who are utilizing the same system.
Complete reference checks with external organizations and agencies and conduct calls with clients of the vendor to evaluate the vendor’s depth of resources and previous experience. Use your findings to assess the vendor’s reputation, including history of client complaints or litigation, and to learn the experiences of clients who are utilizing the same system.
Perform site visits
Conduct client site visits and data center visits, if applicable. Review the vendor’s website and other marketing materials to ensure that statements align with your expectations and do not overstate or misrepresent activities and capabilities.
Perform other research that verifies the quality of service, response time, financial information, and history of the vendor.
Conduct client site visits and data center visits, if applicable. Review the vendor’s website and other marketing materials to ensure that statements align with your expectations and do not overstate or misrepresent activities and capabilities.
Perform other research that verifies the quality of service, response time, financial information, and history of the vendor.
4. Select a system
After vendor due diligence has been completed, selection of the system can be finalized. A thorough selection gives you the opportunity to invest in and/or improve the critical issues identified during your assessment. This helps you avoid any negative impact or adverse conditions that would hinder achieving your strategic initiatives. System selection should include the following:
After vendor due diligence has been completed, selection of the system can be finalized. A thorough selection gives you the opportunity to invest in and/or improve the critical issues identified during your assessment. This helps you avoid any negative impact or adverse conditions that would hinder achieving your strategic initiatives. System selection should include the following:
Select vendor finalist
Review the results of your vendor due diligence and determine your preferred system. Keep in mind that you want to position your institution to be able to reach an agreement that best meets your requirements and provides a solid foundation for a long-lasting relationship.
Review the results of your vendor due diligence and determine your preferred system. Keep in mind that you want to position your institution to be able to reach an agreement that best meets your requirements and provides a solid foundation for a long-lasting relationship.
Finalize any questions
Discuss any questions, concerns, and required changes with the current vendor proposal and request an updated proposal. Then develop a list of key points for negotiation.
Discuss any questions, concerns, and required changes with the current vendor proposal and request an updated proposal. Then develop a list of key points for negotiation.
5. Negotiate
Negotiation can begin after the system has been selected and an updated vendor proposal has been provided. A wellnegotiated vendor contract is an important tool for ensuring a long-lasting relationship with a vendor. With the aid of market data, your technology advisor, and legal counsel, you can position your institution to obtain a comprehensive package, with acceptable contract terms and conditions, at a fair price for the short and long term. Negotiations should include the following:
Negotiation can begin after the system has been selected and an updated vendor proposal has been provided. A wellnegotiated vendor contract is an important tool for ensuring a long-lasting relationship with a vendor. With the aid of market data, your technology advisor, and legal counsel, you can position your institution to obtain a comprehensive package, with acceptable contract terms and conditions, at a fair price for the short and long term. Negotiations should include the following:
Review package and price
Evaluate the vendor’s proposal and appraise the price as it relates to market value, growth, strategy, and potential future expenses. Based upon your evaluation, prepare a price request list. Review questions and expectations, and hold a meeting with the vendor to review your pricing requests. Afterwards, assess the updated proposal and finalize pricing.
Evaluate the vendor’s proposal and appraise the price as it relates to market value, growth, strategy, and potential future expenses. Based upon your evaluation, prepare a price request list. Review questions and expectations, and hold a meeting with the vendor to review your pricing requests. Afterwards, assess the updated proposal and finalize pricing.
Appraise terms and conditions
Review the contract language carefully. Pay attention to security and risk management issues and make sure you understand service level agreements. Also consider backup and recovery services and technical support. Once you have prepared a contract request list, set up a meeting with the vendor to discuss. Work with your trusted technology advisor and legal counsel to discuss contract language considerations related to required services, strategic considerations,
performance and functionality, and overall relationship expectations.
Review the contract language carefully. Pay attention to security and risk management issues and make sure you understand service level agreements. Also consider backup and recovery services and technical support. Once you have prepared a contract request list, set up a meeting with the vendor to discuss. Work with your trusted technology advisor and legal counsel to discuss contract language considerations related to required services, strategic considerations,
performance and functionality, and overall relationship expectations.
Address training and implementation
Confirm you have a clear understanding of training and implementation requirements for resources, timing, and expectations before finalizing the contract. Developing a communications plan can help set your institution up for a successful implementation. Review personnel and technology requirements and request a training and implementation plan from the vendor.
Confirm you have a clear understanding of training and implementation requirements for resources, timing, and expectations before finalizing the contract. Developing a communications plan can help set your institution up for a successful implementation. Review personnel and technology requirements and request a training and implementation plan from the vendor.
Finalize the agreement
Continue to meet until an agreement is reached between your institution and the vendor on price, contract terms, and service levels. Developing a contract that clearly defines expectations and responsibilities of the vendor helps ensure the contract’s enforceability, limit your institution’s liability, and mitigate performance disputes.
Continue to meet until an agreement is reached between your institution and the vendor on price, contract terms, and service levels. Developing a contract that clearly defines expectations and responsibilities of the vendor helps ensure the contract’s enforceability, limit your institution’s liability, and mitigate performance disputes.
Manage the contract
Begin implementation of the new system upon completion and signing of final contracts. Allow six to nine months from start to finish for the implementation process. After the implementation process is complete, conduct periodic performance reviews and service level agreement tracking to determine whether the existing contract is meeting your needs and should be renewed. If not, you may need to begin the process again to select a different system.
Begin implementation of the new system upon completion and signing of final contracts. Allow six to nine months from start to finish for the implementation process. After the implementation process is complete, conduct periodic performance reviews and service level agreement tracking to determine whether the existing contract is meeting your needs and should be renewed. If not, you may need to begin the process again to select a different system.
List any problems with your current system or processes that you want to fix with the new system e.g. “automate invoicing”, “automate debtor reminders”, “get better reports” etc. Keep it simple and specific;
Prioritise and define what you want from the new system, separate the ‘must haves’, from the ‘would be greats’ to the ‘looks cool’ bonus features;
Decide who needs to access the new system (eg owner, bookkeeper, accountant, manager) and what level of access they need, do staff require training? & how welcoming are staff to change?
Prepare a list of your current processes – what don’t you need to do anymore, what could be improved, where are the wasted efforts occurring;
Decide on a changeover date, give yourself plenty of time as changing your accounting system can be a complex process;
What information do you want to bring across into the new system – do you need all (or any) historical data, would it be better to just start afresh;
List out the reports you want from the new system – what information do you need to make your business work better;
Set a specific date for closing off the old system;
Provide details of new system
Cost
Features
Benefits
IT Support & Training
Cost
Features
Benefits
IT Support & Training
To ensure a smooth and efficient transition, don’t skip any of these steps.
Now you’re ready to start doing the work so here’s our checklist of what to do:
Step 1 – Your chart of accounts
This is potentially one of the most important steps. Your chart of accounts determines how your profit & loss and balance sheet will be categorized and presented. If your business doesn’t have the right layout to suit your needs, you won’t get a clear picture of how your business is performing.
Start by mapping out what income, costs, assets and liabilities you want to see on your profit & loss, balance sheet and sales reports. If you want to get your numbers right, it all starts with your chart of accounts. If you are unsure about what this might look like for you, discuss this with your bookkeeper, accountant or other financial advisor.
Now you’re ready to start doing the work so here’s our checklist of what to do:
Step 1 – Your chart of accounts
This is potentially one of the most important steps. Your chart of accounts determines how your profit & loss and balance sheet will be categorized and presented. If your business doesn’t have the right layout to suit your needs, you won’t get a clear picture of how your business is performing.
Start by mapping out what income, costs, assets and liabilities you want to see on your profit & loss, balance sheet and sales reports. If you want to get your numbers right, it all starts with your chart of accounts. If you are unsure about what this might look like for you, discuss this with your bookkeeper, accountant or other financial advisor.
Step 2 – Define a cut-off date
Choose a suitable date – ideally at the end of an accounting quarter or financial year – as the change over date. Make sure you allow enough time for the software transition. Depending on the size of your business, the training and full transition can take several weeks or months so make sure you allow enough time.
Step 3 – Clean up your records
Bad, inaccurate or useless data is one of the biggest causes of problems when transitioning to a new system. If you know there are inaccuracies in your books, wrong transaction coding or irrelevant information, fix this before moving over to the new system. As they say “garbage in, garbage out”. This is the perfect time to start afresh and make sure that the information you bring into your new system is clean, accurate and relevant.
You can either fix it yourself or get an accounting professional (accountant or bookkeeper) to do it for you.
Step 4 – Close off your old system
Once you’ve decided on your cut off date and cleaned up your records, close everything off. Get all your invoicing and bank reconciliations completed and only migrate once you are happy this has all been done.
Step 5 – Match your old system to your tax return
Run a trial balance in your old system as at your last financial year-end and compare the figures to your tax return for the same year. If there are differences fix them. If you cannot manage this yourself you may need to speak to your accounting advisor.
Step 6 – Decide what data you’re importing
Now that all your data is looking good, it’s time to transfer it to the new system but make sure you know what data you are bringing in first. Start with your chart of accounts, followed by contacts (clients and suppliers), staff and payroll information and any inventory lists.
The best accounting systems have good tools for migrating or importing data. Use them but most importantly understand what the format needs to be before importing. Test that it works by importing a few rows of data first to check your format works.
Make sure your aged sales and purchases agree to the old system and that you’ve brought in the correct staff leave and entitlements.
Step 7 – Decide between importing historical data or entering trial balances
One of the biggest decisions will be to decide whether to bring in historical data or to start afresh with opening balances. This can get complicated so if in any doubt, ask your accounting professional to manage it. Don’t attempt to do this by yourself or you could just create a bigger mess for them to fix.
If you’re opting to enter opening balances, add them in this step. To ensure the accuracy of this information get your accounting professional involved.
Step 8 – Final check
Check that your trial balance, balance sheet, profit & loss, unpaid sales and purchase reports all match between the old and the new systems. If you find any discrepancies or accounts that don’t match you need to fix them. When everything matches you are ready to go live.
Step 9 – Connect your bank feeds
When you’re ready to go, turn on your bank feeds to bring your bank transactions from the migration date onwards. If you don’t know what bank feeds are, ask your bookkeeper. They’re one of the biggest time savers in online accounting and all the best accounting software packages offer this feature.
Step 10 – Final check
Run in parallel – Run both systems in parallel for a period of time. Depending on the size and complexity of your business, this could be a day, week, month or quarter. Running the two systems in parallel will highlight any differences in workflow and results.
Once you’re ready, roll it out to your team – Ensure you are at least 90% there before letting your team, contractors or other stakeholders use the new system. If things are still being finalized don’t allow anybody else to use the new system as it could jeopardise the changes and data quality you’re implementing.
Schedule plenty of learn & test time – Schedule learning slots in your diary. The more you know, the more you and your business will get from the new system. You’ll also learn tips and tools that will make a massive difference to your cashflow, processes and overall profitability.
Good accounting systems are super-intuitive and easy to learn. They offer good on-demand tools for learning and also access to a support team.
Choose a suitable date – ideally at the end of an accounting quarter or financial year – as the change over date. Make sure you allow enough time for the software transition. Depending on the size of your business, the training and full transition can take several weeks or months so make sure you allow enough time.
Step 3 – Clean up your records
Bad, inaccurate or useless data is one of the biggest causes of problems when transitioning to a new system. If you know there are inaccuracies in your books, wrong transaction coding or irrelevant information, fix this before moving over to the new system. As they say “garbage in, garbage out”. This is the perfect time to start afresh and make sure that the information you bring into your new system is clean, accurate and relevant.
You can either fix it yourself or get an accounting professional (accountant or bookkeeper) to do it for you.
Step 4 – Close off your old system
Once you’ve decided on your cut off date and cleaned up your records, close everything off. Get all your invoicing and bank reconciliations completed and only migrate once you are happy this has all been done.
Step 5 – Match your old system to your tax return
Run a trial balance in your old system as at your last financial year-end and compare the figures to your tax return for the same year. If there are differences fix them. If you cannot manage this yourself you may need to speak to your accounting advisor.
Step 6 – Decide what data you’re importing
Now that all your data is looking good, it’s time to transfer it to the new system but make sure you know what data you are bringing in first. Start with your chart of accounts, followed by contacts (clients and suppliers), staff and payroll information and any inventory lists.
The best accounting systems have good tools for migrating or importing data. Use them but most importantly understand what the format needs to be before importing. Test that it works by importing a few rows of data first to check your format works.
Make sure your aged sales and purchases agree to the old system and that you’ve brought in the correct staff leave and entitlements.
Step 7 – Decide between importing historical data or entering trial balances
One of the biggest decisions will be to decide whether to bring in historical data or to start afresh with opening balances. This can get complicated so if in any doubt, ask your accounting professional to manage it. Don’t attempt to do this by yourself or you could just create a bigger mess for them to fix.
If you’re opting to enter opening balances, add them in this step. To ensure the accuracy of this information get your accounting professional involved.
Step 8 – Final check
Check that your trial balance, balance sheet, profit & loss, unpaid sales and purchase reports all match between the old and the new systems. If you find any discrepancies or accounts that don’t match you need to fix them. When everything matches you are ready to go live.
Step 9 – Connect your bank feeds
When you’re ready to go, turn on your bank feeds to bring your bank transactions from the migration date onwards. If you don’t know what bank feeds are, ask your bookkeeper. They’re one of the biggest time savers in online accounting and all the best accounting software packages offer this feature.
Step 10 – Final check
Run in parallel – Run both systems in parallel for a period of time. Depending on the size and complexity of your business, this could be a day, week, month or quarter. Running the two systems in parallel will highlight any differences in workflow and results.
Once you’re ready, roll it out to your team – Ensure you are at least 90% there before letting your team, contractors or other stakeholders use the new system. If things are still being finalized don’t allow anybody else to use the new system as it could jeopardise the changes and data quality you’re implementing.
Schedule plenty of learn & test time – Schedule learning slots in your diary. The more you know, the more you and your business will get from the new system. You’ll also learn tips and tools that will make a massive difference to your cashflow, processes and overall profitability.
Good accounting systems are super-intuitive and easy to learn. They offer good on-demand tools for learning and also access to a support team.
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