When Accounting Software Firms Merge

The Wall Street Journal had an interesting article about how expected synergies are not always achieved when accounting software firms merge. The authors use Oracle and Peoplesoft as an example of a situation where promised benefits have yet to emerge.

I'm surprised the authors ignored Microsoft. Maybe it's because Microsoft is actually slowly gaining the synergies of its accounting software portfolio. In successive versions of Microsoft Dynamics NAV (Navision) and GP (Great Plains), the two packages I know well, Microsoft has moved the user interface closer and closer. Behind the scenes, they are acutely aware of the strengths and weaknesses of their packages and work with the partner channel to achieve the best fit between software and client. This isn't official, but my own view is that when Microsoft eventually releases one new package to replace all the former ones, it will LOOK like the user interface that people will have come to expect from Microsoft. But the programming will be 100% new. Personally, I don't believe that you can actually merge the programming code of two different packages. You have to build a new product from the ground up that takes advantage of the logic and features of its predecessors and the experience of the development teams.

Microsoft is rarely the first to market with software, but when they arrive, look out!

Self Implementing Software

A few years ago I was at a boat show where there was a little catamaran (one of those fast, two hulled sail boats) with a big sign reading, "Self Righting". Well, I know that when catamarans tip, they tend to go completely upside down. There's no way they will right themselves. So I walked up to the salesman and asked him about the sign. "Simple," he says, "You can right it yourself."

I was reminded of that salesman when I saw the press release by Technology Group International proclaiming Self Implementing Software.

Designed to hedge against project delays, budget overruns, and overall failures, TGI's new Self Implementing Software is an ideal solution for small to mid-market companies.

How did they accomplish this amazing feat? They created project templates, tools for tracking costs and online training resources. While I applaud them for their ingenuity, these are hardly new tools. I also fail to see how this software will tackle the major challenges of software implementation, such as:

1. Designing an effective accounting structure that meets current reporting requirements and allows for future growth,
2. Addressing the inevitable gap between client expectations and what the software actually does, and
   
3. Scheduling the resources so that the implementation is accomplished on top of the accounting staff's other commitments.

It looks like I still might have a job after all.

Charitable Receipt Software

The question was simple: does anyone know of a software package to do tax receipts for a small charity, but it got me going. To me, the receipt is only part of the process. There are other questions to consider as well, such as:

1. Is a personalized, well worded thank you / request for ongoing support included with each receipt?
2. Is the donor given the choice of receiving the receipt right away or at year end?
3. Is there a procedure for issuing replacement receipts?
4. If the donor gives multiple donations are they summarized on one receipt, ideally with an accompanying remittance summary?
5. Is the donor reminded of other outstanding pledges or the balance on his/her multi-year pledge?
6. Does the fundraising staff have access to the historical donation information in a searchable way?
7. Do the fundraising and accounting systems reconcile (i.e. do they agree on the amount of money raised in each month/year)?
   

The accounting procedures need to be part of the overall fundraising strategy or you are missing a golden opportunity to build goodwill with your donors.

Turnarounds: 2. Technology Triage

The first article in this series talked about the initial things to do in an accounting turnaround. This one is about the accounting system itself. The first step is triage: determining if the system is good to go, walking wounded or a dead man standing.

The brutal reality is that in a turnaround situation there may not be a budget available to upgrade the technology. In addition, the existing technology may be old. Here are a few ideas about how to make the best of what you have:

1. A better chart of accounts - If the staff is spending time analyzing accounts to separate different kinds of transactions, then create new accounts and define what kinds of transaction go in each.
2. One-size-fits-all financial statements - Talk to the managers about what they need. The sales manager needs different detail than the production manager, for example.
3. Inflexible Reporting - Older systems did not come with flexible report writers that let you create custom reports, but you can often retrofit a report writer to an older system, even if all it does is copy the contents of a file into a spreadsheet.
4. Version 1.0 - Check with the software developer whether you are on the current version. You might even be eligible for a free upgrade. If there is a user group, talk to them about what to do to bring the system up to date.

Giving management and other stakeholders (e.g. the bank) better, faster financial reporting goes a long way towards re-establishing trust in the accounting system. Your time spent on technology triage will be well spent.

Next installment: Finding a New System