Printer Friendly

A guideline to purchasing accounting-related software.

Deciding to purchase an automated Management Information System (M.I.S.) is an important step for any company. Whether the needs are for a small accounting package or for an integrated financial manufacturing system, the importance of making the right decision could be critical to the company's success.

The following is intended to be used as a guideline for companies in the market for accounting-related software:

Evaluate Your Needs

Prepare a list in order of importance of the desired features, inquiries and reports you would like to have in the new system. If necessary, break this list down into specific areas (i.e. inventory control, sales statistics, etc.)

Ensure that each and every staff level is involved in the needs analysis, from senior management to data entry clerks.

Cost/Benefit Analysis

Compare your needs against the present system to determine whether they can be addressed without changing systems.

If these needs cannot be met, determine the cost of acquiring software and hardware, the time spent to convert the data, the necessity for additional staff,and perform a quantitative and qualitative analysis to see if the benefits outweigh the costs. A general rule-of-thumb is to project for the next five years.

Get Involved!

Senior management - the CEO, president and/or owner - should all be involved in this project. Do not delegate your employees to do all the groundwork, without upper management being involved. The latter's needs are most critical to the success of the project.

Consultants

When looking for sophisticated software, most organizations will hire a consultant to determine the needs of the company and research the software that is available. Ensure that the consultant is independent of any software company and does not benefit by choosing one software company over another.

When hiring, make sure that that consultant is already familiar with your industry. Ask for and verify references and history of successful implementations.

Budget

Determine a realistic budget for the project. This will help you determine what level of software is available for the price you intend to pay. Looking for bargains while not respecting your most important needs will hurt the company in the long run.

Software Suppliers

Once the level of software is determined, select at least three software packages to evaluate. Try to use your data in a demonstration to ensure the system fulfills your requirements and objectives.

Make sure the software is supported by more than one vendor in your area. You do not want to put all your eggs in one basket!

Check the suppliers most recent references. No supplier can have only good references. If possible, ask for names of customers with whom they are no longer doing business. If they are not willing to supply this information, you must question their credibility.

Whenever possible, try to get the source code to the programs. If this is not possible, your proposal must ensure that the source code is available in the event that the supplier ceases to support the product.

Having the availability to customize software is very important. Make sure your supplier can provide these services.

When comparing one software package with another, determine the closest match between their features and achieving your most important needs. It is very unlikely that a standard package will contain 100% of your requirements. For an adequate comparison, do not look solely at the per module cost. You must include training, on-going support, software maintenance, and other qualitative features such as the size of the company, number of support staff, knowledge of staff, speed of response time, friendliness and professionalism.

Hardware Compatibility

Not all software runs on the same hardware. When choosing your software, carefully examine what hardware platform and operating system is required to run the software at an acceptable speed. Allow for expansion in the most cost effective manner. When researching software, do not assume hardware compatibility.

Be careful not to choose software which is proprietary to one specific operating system and one supplier of hardware. Support for this type of scenario will be limited and should be avoided.

Mr. Mitchell is a manager in the computer department of Appel & Partners Ltd. and has been with the company for approximately nine years.

Formed in 1980, Appel & Partners provides a broad range of comprehensive services and is a member of Horwath International, a national and international accounting organization.
COPYRIGHT 1993 Canadian Institute of Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Mitchell, Steven
Publication:Canadian Manager
Date:Sep 22, 1993
Words:723
Previous Article:Let's call it quality this time.
Next Article:Continuous improvement - managing the risk successfully.
Topics:


Related Articles
Investing excess cash: reducing speculation.
Accounting software helps religious organizations and other nonprofits.
Accounting for internal-use software.
New guidelines on tax accounting for software costs.
The compliance factor. (Financial Management).
Accounts payable and Sarbanes-Oxley; strengthening your internal controls.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters