The controller may have a difficult time justifying the purchase of new accounting systems, since the accounting area does not generate a profit, and therefore has a strong focus on cost reduction. In this situation, it is necessary to focus on other factors to decide whether to acquire new systems.
The following issues should be considered when justifying the acquisition of new systems:
- Error reduction. One of the great burdens of any company is the amount of work required to track down and correct the effects of transaction errors. This typically requires the time of more senior personnel, who are the only ones with sufficient knowledge to make error corrections. Any system that prevents errors from occurring requires serious consideration.
- Seamless systems. Transactional errors most frequently occur at the points where manual systems interface with computerized systems, since a manual transfer of information is required. For example, employees may be required to fill out purchase requisition forms, which the purchasing department then manually transfers into their purchasing software. A typo during data entry could result in the purchase of the wrong items. The acquisition of a fully integrated and seamless system can eliminate these types of errors.
These issues make it more likely that a company will acquire enterprise resource planning (ERP) systems when they are sufficiently large enough to justify the cost, since ERP is designed to computerize all essential systems throughout a business. If an ERP system is not cost-effective, then at least install new systems at any points where doing so will eliminate clusters of errors. This may result in the creation of several customized interfaces with other systems in order to eliminate manual data entry.