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Financial accounting software is a curious mix of old and new. The double-entry bookkeeping principles it follows were formulated in medieval Europe, and some of the ERP and financial accounting software still in use goes back decades. Yet finance departments are also striding resolutely into the future as more companies do their budgeting, planning and forecasting in the cloud; experiment with predictive analytics; and outfit executives with mobile dashboards that distill real-time numbers in colorful charts.
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Financial accounting software touches every department, ultimately determining the fate of them all, so it's essential to appoint the right people to manage the selection process. Financial accounting software purchases are best spearheaded by a steering committee that is well stocked with people from procurement, payroll, manufacturing and other departments that touch, or are most affected by, the organization's financial systems. They'll lead a process of self-examination, identifying the questions the organization must ask itself to get a clear picture of its needs before approaching the market. Senior IT people should also be involved in the early stages, but not drive the process, lest they drift into the common mistake of putting technology above business needs.
Ultimately, the CFO or other senior finance executives will make the final call, but they will have done so after a long period of due diligence. And oversight doesn't end there: Some consultants advise keeping a committee in place to stay abreast of developments in financial accounting software.
Product selection can't proceed without every member of the team having a clear understanding of the main types of financial applications, their critical role in any organization and why updating them can bring competitive advantages. But much of this preliminary work will be for naught unless savvy negotiators are sent to negotiate the best deal with the selected vendor.
Having the right financial accounting software in place to automate finance functions, especially the core ones of accounting, budgeting, forecasting and reporting, not only saves time and money in the CFO office, it can boost overall revenue, as shown in studies by the Houston-based benchmarking organization APQC.
It's like good hygiene for the body corporate.
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