If you recently purchased a business or took over the accounting responsibility at a small business, it might be time to think about the future of the accounting software. Many new owners or office managers opt to keep the business’s existing accounting software, but some decide the existing accounting software doesn’t work for their needs. For those that decide a change in accounting software is necessary, here are some factors to consider when choosing the timing of the switch.
Contract end dates can provide a hard deadline to change your accounting software. Questions to help you evaluate this timing include:
- Does the business have an annual software license with an accounting software vendor?
- Has the business pre-paid for support or services from the accounting software vendor?
- Are there hidden penalties or fees for contract termination?
If you’re not certain, check the software license, business purchase records, or service contracts. If you don’t have any records, contact the accounting software vendor. If you know the contract terminates at the end of the year, you can plan your change before it expires. Remember to factor in extra time for delays and training when working towards a specific cutoff and new software implementation date.
If you’ve done the research before taking over the business or accounting responsibility, you should already know if the business experiences predictable financial fluctuations. If you’re not sure, check the financial records going back several years and a pattern might emerge. The activity at many businesses is influenced by outside factors, such as seasonal patterns. For example, a company located in the northeast United States that installs in-ground swimming pools won’t have much business in winter when the ground is frozen. These slower periods are an ideal time to roll out a new accounting software system with a minimal impact on the business’s cash flow and revenue.
Minimal Revenue Disruption
If your business doesn’t experience regular or seasonal revenue downswings, ask yourself when a disruption would least affect the business. A good practical choice is the beginning of a quarter or month. Switching at one of these points will make it as easy as possible on your financial recordkeeping.
Many businesses opt to change at the end of the fiscal year, but this isn’t always the best choice. The fiscal year changeover is often a period of frantic activity as you gather information for taxes, prepare sales reports, expense reports and inventory reports, and perform other tasks related to wrapping up financial matters and preparing for the year ahead. If your business’s fiscal year falls at the end of the calendar year and you rely on an outside accounting team, you might want to ensure they have the time to devote to your software change.
Least Impact on External Business Partners
The last thing you want to do is surprise important clients or suppliers, so get them on board before you make your decision. If your accounting software must integrate with their systems, they might have valuable input that will save both companies time, money, and frustration. Keep them informed of your progress and let them know when the changeover will take place. They will appreciate your consideration of their business needs.
Changing accounting software can be a daunting task and requires detailed planning and execution. If you decide your business needs new accounting software, Cougar Mountain Software’s Business and Accounting Experts can help you plan and execute your changeover with the least possible disruption to your business.