When replacing your legacy finance and accounting system with something automated and cloud-based, first understand what both you and your non-finance business users need out of the system, and organize implementation around that, Brian Schmidt, CFO of Indianapolis-based nonprofit Purposeful Design, advises.

If you begin implementation before you’ve laid the groundwork, you won’t get the best use of the system, Schmidt said in an Accounting Today webcast. 

“What are those three to five most important things you want to be able to report out of there?” he asked. “Do [those] well, and [don't] get distracted by one-offs and exceptions.”

It took six months for his organization to implement the automated, cloud-based system it uses today, but the long lead time was worth it. He now has a system that automatically generates the reports both his team and non-finance business users want, and it’s integrated into the organization’s other systems. 

“It took me several long phone calls with [our third-party implementation partner] to get my head around how the [system] would work, and how that affected reporting,” he said. “Knowing financial reporting needs of all of our stakeholders was really important, then designing the accounting system in a way that can meet a diverse set of needs.”

Also key was optimizing the legacy system he was using before implementing the new system, because only by doing that can you understand what’s needed to make all users happy, he said. 

“That reveals your pain points,” he said. “You need to know the pain points before your new system can solve for them.”

Faster closes

Controllers and other accounting professionals across the board see automated, cloud-based systems as integral to speeding the financial close process and improving reports, both in their usefulness and the work needed to produce them.

Automated systems speed the close process by two days on average, according to a survey of 1,600 accounting staff conducted earlier this year by Sage Intacct, a finance and accounting software provider.  

The main reasons for the faster close is non-financial business users entering their own data into the system, eliminating the need for redundant entries by accounting staff and increasing the accuracy of the data before it integrates with data in other systems. The automated systems also speed bank and balance sheet reconciliations. 

“It’s getting [us closer] to that state of constant close we’d all like to be in,” Schmidt said.

Frisco First Church, a Texas nonprofit, was able to redeploy data entry staff to more productive tasks after automating its finance and accounting system, said Janet Bresson, its director of finance. "It saved us both time and money," she said. 

Upfront agreement

Maximizing a new system’s benefits requires early buy-in from both accounting staff and non-finance business users, because how data is organized into reports and made available on dashboards determines its usefulness.

Ideally, each business user will have their own dashboards and self-generated reports, which saves the accounting team time, since they don’t have to manage and generate reports for others.

But this type of system requires the CFO or controller to work out ahead of time how the data is to be organized to give each set of users what they need. 

These business users “may think they know what they want, but they also might be thinking in terms of a box,” Schmidt said. “Try to help them think outside the box. As they start to think of that differently, we’re able to determine, how can we build the dashboard and set of reports to help fulfill that need? Not only are we getting better information to them, we’re not having to spend time preparing it every single time they want it. So, we can divert that time to more value-add activities.”

At nonprofit Children’s Hunger Fund, controller Roger Bayramian has designed a set of dashboards and reports solely for his meetings with the CFO. 

“He’s able to go back into the accounting system and review details, if he wants to,” Bayramian said. “He can do that before coming to me to ask questions. So, it’s helped to improve that process. We can look at data in the system together, dashboards and reports. That provides more transparency, and doesn’t cost him getting lost in the details.”

View-only access can also be given to external auditors, greatly increasing the efficiency of the annual audit process, because it reduces the need for auditors to rely on accounting staff to answer queries and generate reports. 

Schmidt’s organization, which contracts with a Big-Four firm to conduct its annual audit, gives external auditors the same status as non-finance employees, so they can get unfettered, read-only access to the data they need.

“We were joking, are they even auditing right now?” Schmidt said. “They were able to do almost everything on their own, it seemed like. Getting details, pulling supporting documents — we saw a 15-20% reduction in our audit fee, for the time savings we got.”