As a business manager trying to operate within the confines of an outdated accounting system, you struggle to efficiently perform the tasks required of you, your department, and the organization. Countless hours are wasted, and you know there’s a strong case for acquiring a replacement system, but convincing the CEO seems daunting. How can you raise the issue? What evidence is most compelling? How do you prove the intangible benefits? These are all legitimate questions.
This post will help you persuade your CEO you need a new accounting system.
Take Your Time and Prepare
Don’t prepare your case simply by noting inefficiencies and problems you experience. Take time to collect solid data regarding resources wasted, additional time spent, and interdepartmental issues arising from the current accounting system’s lack of features and functions.
If you can legitimately claim catastrophic consequences of NOT making a system change, spell it out.
For example, rather than stating that a new system will “make us faster,” quantify the number of additional hours employees dedicate to a specific inefficient process, calculate their pay for those hours, and present the total as a monthly or yearly cost (in dollars). Let’s say you and a coworker each spend three hours developing critical reports each week. That’s $45 per hour time three hours per week, totaling $135 weekly, $505 monthly, or more than $6,000 annually. Present this cost data concerning multiple inefficient processes, and you have a definite cost justification for a new system.
Focus on Critical Areas
Accurate Financials
Consider areas that present substantial upsides when improved and drastic downsides when faulty and account for them from the CEO’s viewpoint. Accurate financials are critical because they allow the CEO to avoid government audits; penalties for inaccurate financials can cost thousands of dollars, and your CEO could be pushed out by the Board or be criminally charged. State the upside to accurate financials as less time the CEO must spend analyzing reports and preparing for audits; the CEO will also have more confidence regarding cash flow, reporting to the Board/investors, and have extra time to focus on strategic initiatives.
Faster Closings
Quantify how much faster the company could close the books each month, quarter, and year; fast closings are necessary for the CEO to see where the business stands. Faster closings also give CEOs more time to evaluate the next steps for the company and report to key constituents, like investors.
Executives must balance competing investments, and your new accounting system idea will be one of several on your CEO’s mind; therefore, you need concrete numbers so they can objectively weigh its value against others.
Investment Quality
The right modern accounting system is more than a data capture and reporting tool. Quality accounting systems transform data into operational insights that drive business growth and profitability improvements. Explain a new system’s capabilities for creating and tracking KPIs specific to your business as well as creating budgets, plans, and forecasts. Then, request case studies from vendor websites and salespeople and present the cases most relevant to your industry, company size, and market situation – and don’t forget to include the ROI! Nothing eases a CEO’s concerns regarding a new investment more than seeing peer companies succeed from the same investment.
Present a Complete Strategy
Prepare a brief report that includes a summary of the need, the investment, the payoff, and the approach to quickly inform the CEO of what you’re proposing, why, and how it will happen successfully. You don’t want to get stopped by the question, “Great idea, but who has time to pull that off?”
Present how you could introduce a new system and how you recommend mitigating the risks of implementation, which means you must address, at least minimally, how to define new business processes and how organizational change management will occur to support those new processes.
For more information about an updated accounting system, contact us today.
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