As the business grows, many companies come to understanding that their accounting systems are unable to ensure the effective functioning of the company's management system, which results in a desire to combine numerous business processes in a single system.
Currently, companies use the following approaches to IFRS and management accounting:
- Transformation of local accounting data. A method in which adjustments are applied to local accounting data in order to comply with IFRS or management accounting methodology;
- Parallel accounting. A method in which both local and management accounting is carried out in the same database, while each document is processed differently according to the accounting, tax, management and IFRS accounting registers;
- Combined approach. A method in which, for instance, local accounting data is loaded from segregated databases into a general database, where adjustments are applied to the downloaded data with varying degrees of automation.
An important stage in the deployment of an ERP system is the development of functional specifications considering the requirements imposed by management and IFRS accounting.
Regardless of the approach chosen, if there is a need to organize management accounting, IFRS accounting and budgeting in a single ERP system, then before drawing up a ToR for a potential vendor it is essential to envisage key points to be taken into account during the implementation of an ERP system (outline the main objectives of its implementation; describe the methodology that should underpin the ERP system; describe the available data sources; structure the formats of the required reports etc.).
This is justified by the fact that the implementation of an integrated IT-system requires significant resources and changing its configuration during or after the implementation might eventually prove too costly, if ever possible.
FIN.by in this case can serve as an advocate interpreting and protecting the client’s interests during interaction with ERP vendors, including services of Business Analysis (compilation the functional specifications for the future ERP system, compilation AS IS and TO BE), covering the following requirements of the management and financial accounting:
- accounting data drill-down (detailed itemization provides the data dimensions necessary for management purposes);
- development of methodologies that underpin processes/procedures/scripts (which will eventually be implemented by the vendor in the ERP system);
- revision of business processes to meet the desired depth of automation.
Support service for ERP system deployment and testing from FIN.by may involve:
- Development of functional specifications for the ERP system to be implemented:
- description of the system required functionality;
- collecting and structuring the information about the available necessary data sources;
- description of the preferred format for presenting analytical data from the ERP system;
- determining the required drill-down level.
- Preparation of the input data and reference directories for uploading to the ERP system
- collecting and reconciling the data from disparate old systems for uploading to the target system;
- filling in the directories of the target system to meet the functional specifications.
- Testing of the implemented ERP system
- assessment of compliance of the implemented ERP system with the initial provisions of ToR regarding the general business logic, as well as the completeness and quality of the implemented functions;
- preparation of detailed test cases in Excel based on real data, covering all the basic logics behind the complex calculations, that can be used when accepting work from an ERP vendor.