Changing to a new enterprise resource planning (ERP) solution is a major transition for any organization. Impacts of a system change can be far-reaching and often unexpected. If your organization is considering a change or currently in the process of an implementation, here are a few tips to help you avoid surprises during the first audit after go-live.
- Don’t forget about capitalizing certain implementation costs.
- Certain ERP implementation costs—including those related to cloud-based ERPs—are required to be capitalized and amortized. These implementation costs can be significant and often require management’s judgment on whether they should be capitalized or expensed. Your auditors will likely scrutinize the handling of these amounts for proper accounting treatment, so it’s important positions are documented and defendable.
- Use this as an opportunity to update your control documentation ahead of the audit.
- A new ERP means your processes and controls have changed—hopefully for the better! Use the time prior to or immediately after implementation to leverage the work you’ve already done and update your existing control documentation while the changes are fresh in your mind. The benefits of this are twofold. First, updating the documentation may help identify potential process or control deficiencies that would likely be easier to correct prior to or immediately after implementation than if they were discovered later. Second, your auditors will ask you to do this anyway. Giving your audit team additional time to review the changes may help it be more efficient while planning its audit procedures.
- Have a plan for accessing historical information.
- Auditors request information and documentation related to past events. While this may seem obvious, it can be easy to forget while your company is going through such a forward-looking process that detailed historical information may eventually be needed. Make sure there is a plan for retaining, and perhaps more importantly, easily accessing the information. You don’t want your team spending more valuable time than necessary searching for requested information.
- Use your auditors as a resource.
- ERP implementations can be extremely stressful. From the significant cost overall to the time required of employees, changing systems is an enormous undertaking. Don’t go at it alone. Professional advisors can provide excellent assistance during this transformative time. Consider bringing them in during set points in the process rather than waiting until audit time to discuss all changes made.
Whether you are in the early stages of considering an implementation or deep in the process, FORVIS can assist at any point. For additional information, please reach out to a professional at FORVIS or submit the Contact Us form below.