Accounting for Growth
Arvind Arwalla and Michael Mahoney
Arvind Arwalla, CEO of FACT Software International, is an EO Singapore member who has served as chapter president for two terms during his 8-year membership. FACT Accounting for Windows is an integrated, multi-currency, real-time business accounting program that effectively integrates all of a company’s sales, expenses, inventory and financial accounting systems into one comprehensive package. Michael Mahoney, aka “The How to Buy Guy,” is a CPA and CEO of Brittenford Systems, a Microsoft Gold Certified reseller of accounting systems. He has been an EO member for four years and serves on the DC chapter board.
The Need
The leaders of companies invest substantial sums of money into frontline operations to improve sales performance and impact the bottom line, but most CEOs pay scant attention to their company’s accounting software. They prefer to have a staff person handle the mundane back office stuff. But the reality is that accounting affects the entire operations of a company in more ways than one, and it deserves your attention.
If you’ve attended any EO learning events or sessions on growth, you know that most businesses outgrow their infrastructure. The systems that worked for you when you got started will not continue to work as you grow. This includes your accounting software. And although it may not excite you, if you haven’t evaluated your company’s software recently, now is the time.
Like your business, the accounting software market has made strides to grow and improve. That means that not only are there options other than
Quicken and Oracle, but there are accounting packages available that meet the needs of high-growth and mid-market firms for nominal costs.
I have been helping CEOs migrate to real-time accounting for the past 17 years. This “promised land” helps them tighten operations, increase efficiency, raise productivity and improve profitability. An integrated, multi-currency, business accounting program that effectively integrates all of a company's sales, purchases, inventory and financial accounting systems into one comprehensive package will actually save you money. It will operate on a continuous basis, whereby each transaction is immediately posted to all relevant areas of a company's financial management system. Best of all, it reduces the audit cycle tremendously.
Though my software of choice is FACT, there are several programs on the market that can fill this need. For example, in recent years, Microsoft launched Dynamics, a suite of four accounting systems for the mid-market. They’ve lowered prices and spent millions on research and development. Sage MAS Products launched a comparable suite of accounting programs, a system that is also affordable. What’s more, these programs are integrated with the technology that most of us already use, so there is no need to learn a new operating program.
And, since everyone in the company is entering transactions in the same system, employees are able to generate reports on a real-time basis. These reports are absolutely up to date, allowing you to make decisions based on current performance, not on stale data that may be weeks old. Everything you need to know about the financial health of your company is available to you with the click of your mouse.
The Choice
But with the 10,000 accounting programs on the market, how do you know which is the best fit for your business? This takes some thought as, in my experience, at least 50% of implementations in the industry are either “substandard” or “failed.”
To understand the devastating impact of a failed implementation, consider BearingPoint, a respected, multi-billion dollar consulting firm in the United States. Their failed accounting system implementation in 2004 resulted in an inability to release earnings for nearly a year, significant revenue restatements, a U.S. Securities and Exchange Commission (SEC) investigation and the loss of more than 25% of the firm’s 17,000 employees. Ouch.
So many companies make the same mistakes as BearingPoint, but with a little information, you don’t have to.
Plan
The first mistake begins with a failure to follow a rational evaluation plan. Most prospects are stumbling blindly through the process. They expect vendor sales representatives to educate them, fail to involve the right stakeholders, have no vision for success, no timeline, no budget and little understanding of user needs. They often consider an absurdly broad range of solutions with decisions that are too easily influenced by the biases of those involved— the CEO wants the safe solution, the CFO wants the cheap solution, users want the familiar solution and the IT team wants the expensive, technologically exotic solution.
My experience with successful buyers is that they begin with the end in mind. They convene a balanced group of stakeholders and create a written project plan that includes a mission, success criteria, timeline and budget. They review their business’ processes and needs, research solutions and quickly develop a short list of candidates. They invite vendors into the process only when they are prepared to control the discussion, ask relevant questions and judge answers.
Understand
The second mistake I see is the one BearingPoint’s CEO blamed for their embarrassing debacle— a lack of proper training on the new system. Today’s accounting systems are rich in functionality and highly flexible. Asking a staff accountant to start work based on a few hours of mentoring from an implementation consultant is begging for trouble.
The prospects I’ve worked with who get it right empower their staff to take control of the new system. This means they invest in hands-on classroom training led by certified instructors at a bona fide training center. This not only dramatically raises their chances of success, but it also saves them money. One day of certified classroom training generally costs less than four hours of a support consultant’s time, meaning the training often pays for itself within the first month.
Choose
Even if you manage to make the first two mistakes, there is still hope if you avoid the third and most lethal mistake— selecting the wrong implementation partner. If there is only one decision you absolutely, positively must get right, it’s this one.
The harsh reality is that, although accounting system technology has advanced dramatically during the past 10 years, the community of implementation partners has not. More than 90% of all implementation firms have fewer than five employees, and many operate as home-based businesses. Trusting your mission-critical applications to a firm that can’t afford office space doesn’t make sense.
A good partner will be straight with you during the buying process, safely guide you through the inevitable surprises that crop up during implementations and provide proactive support and value-added services long after the system goes live. Look for a partner with expertise in your industry, an experienced management team and resources deep enough to support you. Don’t worry about hourly rates: in the big picture, expertise and the ability to deliver will keep the costs in line.
