Scrutinize details when buying accounting software systems

Know specific short- and long-term requirements

So how do CFOs and business owners know which accounting software will be best for their organizations? The first thing they should do is go through a structured selection process instead of just start using what they think might be a good fit, Furth said. That means looking at the big picture and selecting accounting software that will meet future needs and not just the immediate needs of the business.

"You have to think about where you're going to be one, two or three years down the road and buy for that," he said. "How is your business going to change? What is your plan? Are you still going to be selling the same products? Are you going to be expanding your services geographically? How is your volume going to increase over time? Those are some of the big-picture things that I think are very important."

CFOs and owners should also prioritize their key short- and long-term requirements in, for instance, order-to-cash or procure-to-pay processes, according to Furth.

You must first take a look at what the business requirements are and consider what software is available second.

Using this list of requirements as a foundation, organizations should ask each provider to supply a demonstration based on their typical transaction flows, for example, accounts payable, accounts receivable or monthly close. Then, they should map out their key use cases -- the flow of an order all the way through to payment, calculating revenue under the new Accounting Standards Codification 606 guidelines or the monthly close process; they should also ask each vendor to demonstrate these use cases and compare the demonstrations, Furth said. That's critical because if companies don't enter the selection process with a clear set of requirements and use cases, what they hear and see from each vendor could be very different, and it will be very difficult to make a good decision, he added.

Glenn Tyndall, a certified public accountant (CPA) in Jacksonville, Fla., concurred that, before selecting a particular accounting system, companies should conduct a needs assessment to determine the features and functions they’ll need. "The needs analysis is making a list of what they need the software to do," he explained. "They should take the time to think about what accounting transactions are significant to the business so they can choose a program that can handle those transactions efficiently. Do they need an Accounts payable module? Do they need an accounts receivable module? Do they need construction capabilities for job costing [or capabilities for] retail, inventory management?" In addition, companies should list the reports they'll need to generate and the integrations they'll need for third-party applications, he said.

Thomas Johnson, senior director of sales at DSD Business Systems, a reseller of accounting software for small and medium-size businesses, said it's also important for companies to make integration a high priority. When evaluating accounting software systems, companies should determine how easily they integrate with other systems. By integrating financial accounting software with their other business management systems, including CRM, payroll, supply chain and HR software, organizations can improve their bottom lines, Johnson noted.

Additionally, companies should look for accounting software that can easily adapt to their business needs. They should opt for software that's simple, intuitive and closely matches how they already do business. And the system should also quickly and easily incorporate industry-standard technology. "You must first take a look at what the business requirements are and consider what software is available second," Johnson said.

Scrutinize vendor stability, service reputation

It's also critical to investigate the vendor -- not just the software -- because an organization isn't just buying a product, it's also buying the vendor, Furth advised. "What's the company's track record around customer support and service? What's its track record around innovation? The key point to remember here is that you are buying software, and no software product is perfect," he said. "So you need to know that there is a great company with great people supporting the product."

Companies should go into the buying process with an understanding of what's important to them and not let the vendor tell them what's important. "Don't let the vendor lead you by showing you some bright, shiny object," Furth said. "You should be going into this having thought things through."

Johnson agreed that it's important to determine the technical support each software provider offers its customers. "You have to have a [software] publisher that has great support," he said, "and because most publishers do not sell direct, you have to have a competent value-added reseller to do business with. That reseller has to have the necessary infrastructure and certified staff with real-world experience to support the software, Johnson added.

Companies should also ask what days of the week and times during the day telephone technical support specialists are available as well as what costs, if any, are associated with various levels of support. Ease of use also needs to be considered when looking for accounting software systems. Organizations should select a system that's easy to learn, given the time and resources they can commit to training employees on how to use it, according to CPA Tyndall.

For a small business with few resources to get employees up and running on a new system, he explained, choosing simple, easy-to-use accounting software systems such as Quickbooks may be the way to go. While there may be better accounting software programs on the market, he said, a company won't see the benefits of these programs if their employees don't know how to use them.