With a new season, summer, quickly approaching one may start thinking about other changes, such as an accounting software change. When we begin talking with a customer that is interested in Abila MIP Fund Accounting, the conversation always includes when should we implement or “go live?” Further questions arise, “should we make the change at the start of a fiscal year or in the middle?”
Many nonprofits immediately jump to making the change at the start of the new fiscal year but is that really best? There are pros to making the change then. These benefits include a clean cut off with year-end information. Or, a complete year of detailed financial data in the regular reporting package. But, there are also plenty of cons.
Year-end, for most nonprofits, is one of the busiest times for accounting departments, especially for calendar fiscal year ends. Tasks occupy a large sum of time, thus making it a con. Some of these tasks include finalization of financial information for auditors, preparation of 1099s and W-2s. Others are entering budgets and holiday schedules in addition to the department’s regular duties.
When should your nonprofit switch accounting systems?
If a customer asks our advice for when to make the change, our recommendation is almost always to implement after the craziness of year-end subsides. There is so much additional work that goes into implementing a new system. Some of this work includes the establishment of chart of accounts and conversion of data. Not to mention, learning how to use the new software.
Making the change during the busiest time of the year can easily lead to a slip in the implementation timeline. Our approach to a mid-year implementation is to import all transactions up to the determined “go live” date. n this case, a complete year of financial data is in the new system. Year-to-date financial reporting is complete. Also, audit preparation at the end of the year will be accomplished through the new system. Because of such, the result is the same as if the implementation occurred at the start of the fiscal year but with a few less gray hairs.
So, what season will you choose to change your accounting system?