After more than 30 years of experience within the I.T., accounting and change-management industries, I often speak to finance directors who are looking to smoothly transition from their existing legacy accounting software.

My experience of many financial directors is that while they understand the importance of cloud accounting, the number of options on the market can be confusing.

I have supported a number of recruitment companies to transition away from legacy software solutions such as Sage 50 and Advanced Exchequer, so in this article, I am going to highlight the top six points that financial directors should consider when reviewing any options for cloud accounting.

1) The size of your organisation:

When it comes to cloud accounting solutions, size does matter. The first thing you should be thinking about is what size are you now, and what size your company is planning to be.

An organisation with a number of staff, perhaps covering different regions, is clearly different when compared to a two-person partnership.

Small is beautiful and there is beautiful accounting software available for small businesses, but if you are an FD with a Finance Team up to their necks in work, you’re going to need to carefully consider your options.

2) Speed and robustness:

With remote working high on the agenda these days, be careful of ‘Cloud Washing’. This is where certain providers advertise their solution as being cloud software, but in reality it is not a ‘true’ browser-based solution (i.e. specifically designed and intentionally written for the cloud).

The impact of having to connect in using ‘remote desktop’ software often means being limited to the pc that has the remote desktop configured on it.

It is like taking a longer route to work, going from A to B via C. Not only that, but latency is greater, and if you are used to working quickly with your keyboard and number pad you may find that your fingers are working much faster than the system. Not to mention the downtime for upgrades and maintenance.

We take things for granted now like being able to click on a hyperlink or drop information into Excel or Word and do it quickly without having to login to different systems, transfer data between them and risk forgetting which has the latest version.

So to avoid the above and the not-to-be-mentioned ‘corrupted transactions’, test the speed and get a feel for the robustness of a piece of accounting software.

3) CRM capability:

Historically, companies have had separate accounting and database/CRM software applications that are not linked. This means that if some information about a contact changes, the details must be amended in both systems.

If you store a number of pieces of information against an account, along with their positions, e-mail address and other useful information, it is then easily accessible to others in your company that need it.

You might also consider an option to enter notes, set reminders, see all documentation relating to one account, and help with GDPR compliance.

4) Third-party integration:

There are APIs that allow systems to connect in real-time and there are also other ways of importing data that allow more control over what goes into the system. Sometimes a simple import routine from a CSV/Excel file is enough. I would definitely recommend checking out the options, their ease-of-use and flexibility.

A lot may also be dependent on cost. Solution providers are keen to sell more programming and consultancy time as well as creating a form of ‘tie-in’, so be careful. A ‘seamless’ integration may not be that ‘seamless’ and may not be financially justifiable. Step one could be to test it in a simple way to start with, to allow you to see how much you can automate yourself.

There is nothing wrong with a level of human interaction, understanding and validating what is going on - automate completely and people forget what is happening behind the scenes.

5) Transaction volumes:

Accounting systems are databases and, as with any database, consideration needs to be given to the volume of transaction lines being entered. Is it 200, 2,000, 20,000 or 200,000 a month?

The system will need to cope with the anticipated volume, and selecting an inappropriate solution will lead to speed issues both in terms of inputting data and extracting/reporting. If it is slow, it will take time, cause frustration and ultimately cost money.

6) Analysing by dimension:

Analysis by a ‘dimension’ (a cost centre/department/region/office etc.) means a system can cope with multiple divisions in a structured way, making coding, controlling and reporting easier.

Don’t forget, aside from the actuals that need to be reported on you will need the ability to easily input or upload a budget split by the various dimensions.

It is also useful to have dimension validation so that transactions do not get inadvertently posted to the wrong code which we all know is time-consuming to correct.

With more than three decades supporting businesses with I.T, accounting software and change-management, I have helped lots of financial directors to smoothly transition from their legacy accounting software to a cloud accounting solution that best suits their needs.