CFOs and Controllers—or anyone responsible for accounting operations, maintenance of the accounting system and financial reporting—must establish clear and unambiguous policies and procedures for data migration in a software implementation.
As a former controller on the client side, and now a financial systems analyst on the implementation side, I’ve gained a lot of perspective on the factors that contribute to a successful ERP implementation. In this blog post, I am going to lean on my experience and will take a look at policies and procedures surrounding control accounts that need to be established in order to ensure data migration is performed seamlessly with no adverse consequences.
Some of the questions a CFO or Controller might pose after migration are:
- Is my data reconciled?
- Do the various components sync up?
- Why are there differences between the converted data and my source data?
- Where are these differences coming from?
Many issues can be prevented by establishing clear procedures and policies pertaining to the following control accounts prior to data migration: Cash, Accounts Receivables, Accounts Payables, Inventory and Fixed Assets.
Before data migration, the main objective with respect to Cash is to make sure that the following tasks are performed:
- Bank is reconciled and cash reconciliation module balance agrees with the General Ledger Trial Balance Cash account as of the cutoff date
- Outstanding check list (if any) is compiled
- Deposit in transit list (if any) is compiled
The policy here is to make sure the appropriate Accounts Receivable personnel have reconciled the Receivable sub-ledger and the following steps have been taken:
- Post any unposted receivable transactions and cash receipts
- Though not required, applying unapplied documents will make your data cleaner
- Print Aged Receivable as of the cutoff date
- Reconcile the Receivable Sub-Ledger to the General Ledger Receivable Trial Balance control account
The strategy here is similar to Accounts Receivable above:
- Post any unposted Accounts Payable transactions and cash Payments
- Though not required, applying unapplied documents will make you data cleaner.
- Print Aged Payables as of the cut-off date
- Reconcile your Payables Sub-Ledger to the General Ledger Trial Balance Payable Control account.
Inventory Sub-Ledger must be reconciled and tie to the General Ledger:
- Post any unposted Inventory transactions
- Perform physical inventory count and make necessary adjustments
- Print Inventory Item Valuation Report
- Reconcile your Inventory valuation report to the General Ledger Trial Balance
Your Fixed Assets module must be reconciled to GL Property Plant and Equipment Accounts:
- Enter and post all Fixed Assets related items
- Perform depreciation calculation as of the cutoff date
- Print Fixed Asset, Depreciation and Net Book Value Report
- Reconcile asset balance and accumulated depreciation balance to the General Ledger Trial Balance
Once the Sub-Ledger has been reconciled in the source data, migration to a new system should be seamless.
If you’re looking for support on your ERP financial system implementation, please get in touch with our team – we’re happy to help!