The Top 5 Key Elements for a Successful Financial System Migration!

A seamless migration plan is essential for successfully transitioning to a new financial system. Otherwise, even if you invest in deploying advanced technology, without efficient and accurate data, these technologies cannot fully realize their value. So, how should you plan for this critical financial migration project?

For this question, you may find that most articles are cumbersome, lengthy, and overly emphasize technology, neglecting the seemingly simple but crucial issues in the financial migration process. This article aims to introduce the 5 key issues that financial and accounting stakeholders must consider when executing financial migrations. Only by properly resolving these 5 issues can you successfully implement a new financial system.

The Top 5 Key Elements for Successful Financial System Migration:

1. Rebuilding the Chart of Accounts (CoA)

 Migrating to a new financial system is often an excellent opportunity to reassess the existing Chart of Accounts. You can use this opportunity to clean up inactive old accounts, rebuild the CoA, and ensure full utilization of the new financial solution. For example, today's financial systems offer multiple dynamic sub-segmentation options, and you don't need to create unnecessary accounts for cross-analysis reporting. You can start rebuilding the CoA early in the migration process—even if you only have a basic understanding of the new platform.

Single Entity vs. Multiple Entities If you have multiple operating entities, you may also need to consider many other issues, such as existing settings.

o Are you currently using multiple financial systems (e.g., companies you acquired and the parent company use different systems)?

o Do your operating entities have separate CoAs or do they need to meet any regulatory requirements?

o Can your new system provide a single platform and consistent CoA to help you with financial consolidation and reporting?

2. Closed and Open Transactions

 To successfully operate the new financial system, a simple and effective migration method is to only introduce opening balances and open transaction data. By settling transactions in the old system as much as possible, you can effectively reduce the volume of open transactions that need to be migrated. In summary, the simpler the data, the easier the migration.

3. Historical Transactions and Trial Balances

The third key issue is determining how much historical data you need to migrate. Although the idea of importing all historical data into the new system is tempting, you need to carefully consider complexity, cost, and time issues.

o Is the new system's go-live timeline and budget tight?

o Can you still access the old financial system to obtain historical reports?

o Can you store historical data in a separate system or database?

4. Currency Conversion and Consolidation

If your business operates internationally, recording multiple foreign exchange rates in the financial system can raise various issues. Keep updating exchange rate information, which is crucial for maintaining books and closing finances based on accurate foreign tax rates.

5. Go-Live Timing

The last key issue in the financial migration plan is the go-live timing. Common sense dictates that you should go live with the new system on the first day of a month, quarter, or year (e.g., January 1), but this means closing the books in the old system on the last day (e.g., 31st), which is unrealistic. We recommend that you first assess your business, choose a go-live timing that is strategically significant for you, and then work with the project manager to develop a detailed project plan. For this, you need to understand your current closing processes and the significance of the migration project for business users and operations, and then fully consider these factors when making a plan to ensure a seamless migration.

A New Beginning for Financial Technology Transformation: Cost Reduction and Efficiency Improvement

Having addressed these 5 issues, you can confidently proceed with the financial migration. In fact, the vast majority of companies today lack well-tested financial migration best practices. An efficient and timely financial migration can not only reduce costs but also allow you to focus on other important business tasks. You can choose our Oracle NetSuite ERP, and based on your financial migration, we will act as a professional ERP implementation consultant to escort and ensure convenient enterprise management.