There are plenty of new products around if you are thinking of replacing your accounting system, advises John Tate.
As we get towards the end of the year, is it time to consider replacing your accounting system? In previous columns I have talked about the pros and cons of making a change.
If your year-end is December, and you have a relatively straightforward requirement, three months is probably long enough to select a product, research and design the project plan and start the implementation. If your year-end is March 2014, and your requirements are more complex, you may have enough time. If your requirements are really challenging – typical of most large charities – you might like to start thinking about the selection and implementation process a year or more in advance of going live.
Year-end switchover
Of course you don’t have to start with a new system at the beginning of any given financial year. However, a year-end switchover has a number of advantages.
If you can close off your accounts quickly you can start the new system with a clean opening balance sheet, meaning you can then enter and hold a full year’s detailed accounts. This makes reporting and dealing with enquiries for the first year easier, as you can just use the new system.
Also, in year two, comparisons are easier – again because you will be holding all the prior-year data on the new application.
There are workarounds if you change mid-year – for example by entering summary information for the months you missed. Or you could go the whole hog and rekey all the data for the gap period, but this can be excessively time consuming.
Those who argue against a year-end switch will point out that this is likely to be the busiest time of year. However, if you have a well-run system, staff keying in transactions will have completed their work early in the new financial year and will then be able to devote time to the new system.
As you weigh up the best timing option, it is worthwhile noting some interesting product announcements which have been made over the last few months.
For the smaller charity, QuickBooks is making a big push into the cloud market. There are now nearly half a million users of QuickBooks online and the number is growing rapidly.
The main rival to QuickBooks online is probably Xero, a New Zealand-based software developer. While QuickBooks has a larger presence in North America it is claimed that Xero is the faster growing of the two internationally.
With around 200,000 customers, Xero is being taken very seriously by the analyst community, and it has been successfully implemented by a number of charities.
Market leader
Sage 50 Accounts continues as the UK market leader and in August announced ‘Sage 50 Accounts 2014’. The main feature of this release is a new ‘Manage VAT’ module, while the system can also record and track donations under the gift aid small donations scheme, and will generate a gift aid report that can be filed electronically with HMRC.
However, critics of Sage argue that its lack of focus on genuine cloud offerings is limiting the growth of the company.
For larger charities there are a host of new product announcements. Many of these involve the cloud or mobile technology. For example, Microsoft Dynamics, NAV and Dynamics GP are now available hosted on the Microsoft Windows Azure platform. Meanwhile Oracle has extended its business-intelligence capability with a self-service mobile analytical application design tool.
The number of new or updated products on sale is likely to make the selection process for a new system difficult, as there is so much choice. So my advice is always to make sure you pilot a product before you actually buy it.
Enter a typical sample of transactions, make sure they are processed as you expect and that you then get the right reports from the system. This will give you the chance to make sure the product really does what you want – before you sign the contract.
John Tate is a business consultant, IT adviser to civilsociety.co.uk and a visiting lecturer at Cass Business School
