3. Work out a realistic budget
Having worked out what you want from your new accounting system, the next issue to consider is how much you want to spend. While there will be costs involved in purchasing software and user licenses, it is important to consider the following additional costs which you may need to budget for:
- System upgrades
Is your computer system suitable for running a new accounting package that will meet your identified needs? Bear in mind that hardware which is more than three years old may make even the best new system slow or unreliable, and an out-of-date operating system may be incompatible with the latest applications. In addition, if there will be more than four people using your accounting system, you should think about installing it on a network with a dedicated server to ensure maximum efficiency and reliability.
If your computer system does not make the grade, think about what costs will be involved in bringing it up to scratch – New or additional workstations? Operating system upgrade? Addition of a network or enhancement of an existing network?
- Getting the new system operational
This should include staff training and data conversion as well as installation and set-up costs. Remember to include staff time in your budget in addition to any outside consultants’ or trainers’ fees. Budget additional staff time if you will be entering your records from scratch (as opposed to converting data from an existing system).
- Security
Hopefully you already have good backup systems in place. However if you do not, you may need to add extra to your budget for backup hardware, software and media. You may also need to install an Uninterrupted Power Supply (UPS) and develop a Disaster Recovery Plan to ensure that your data is safe even if your system (or an operator) fails.
- Customisation
If you think you will require any customisation of your system – e.g., documents, reports, links to other systems – allow for staff time and/or outside consultants’ fees to develop these.
- Ongoing costs
If you do not already have a maintenance budget for your accounting software, set aside a portion of your annual operating budget to cover the cost of regular updates to the system in the future. This should help you to avoid large one-off expenses when you come to upgrade, as well as allowing you to enjoy the benefits of using up-to-date software which is compatible with the latest hardware and operating systems. You should also allow a certain amount in your annual budget for training new staff on the system, and for any costs associated with obtaining help and/or support for the software.