8 Rules for Successful Global ERP Finance Deployments


Over the course of my career, I have managed Global ERP deployments in China, India, Romania, Italy, Poland, and 10 other countries around the world. During my tenure I have yet to encounter a deployment in which finance configuration or testing was not somehow on the critical path to implementation.  Although I am not a finance expert, I have come to understand that one needs to learn the finance vocabulary to have a true shot at implementing on schedule.

In pondering the question of why finance is always on the critical path, it occurred to me that one really needs to be able to communicate in about 7 languages:

  • US GAAP – Generally Accepted Accounting Practices: These are the rules by which your US accounting team and auditors review your accounting practices.
  • Local Country GAAP – accounting is not accounting: The rules change for countries that have experienced high inflationary periods or historically had political corruption that resulted in an increased burden of financial reporting.
  • Local Country Tax Regulations and Import / Export Regulations:  These are different from accounting practices.   Did you know that you can buy and sell your import credits in India?
  • ERP configuration language
  • Legacy configuration language
  • Local language for communications (e.g. French, German, Chinese, etc.)
  • And of course English

My experience has been that a lot of the local country finance complexity often gets swept under the rug during the design phase of your global ERP blueprints. System Integrators usually declare that getting the finance portion right in each country is a part of “Localization”. They explain that you should wait to deal with these technical blueprint issues as you are getting ready to deploy your global design into each of the countries on your roadmap.

There is some validity in waiting to deal with these issues until it is time to deploy, however not all finance problems are alike and for some issues, you are far better off dealing with them right from the point of initial configuration.  These problems typically include:

  • Inventory valuation accounting – some countries allow valuation at standard while others require valuation at actual
  • Electronic banking protocols – not as easy as getting your Quicken set up
  • Compliance with corporate policy – the further you get away from corporate headquarters, the looser that adoption of the corporate policy in deference to local GAAP practices
  • Ability to generate all of the reports that are required to be in compliance with local tax and regulatory reporting – this can involve modifications to the chart of accounts which often times are considered Taboo
  • Local accounting practices with regard to accounts payable / receivable / and advances

Given all of this complexity and the absolute requirement to get finance right as a component of deployment, follow these 8 rules to give your implementation the best shot at success:

1. Follow the Close – One of the most valuable exercises you can utilize to feather out all of the local requirements is to document the local closing and financial reporting procedures. You want to capture every report that is produced and sent to the regulatory bodies at each site. Trying to accumulate these reports in a survey or Q&A session will get you about 80% of the way there. Unfortunately, the last 20% will require modifications in configurations. These will drive up costs and probably be identified as a scope change later in the process.

2. Challenge the “requirements” – 9 times out of 10 your local controller will convey requirements for reporting that are believed to be necessary to meet statutory regulations. However, this is not always the case. My experience shows that reporting is often done for the convenience of management or simply because they have always done it that way. I have found it very effective to have the local controller produce the regulations that require the report. Having the regulations at hand often allows alternative methods of meeting the requirement that the local controller may not have otherwise considered.

3. Dual responsibility for accounting problems–I have heard the words “this is an accounting problem” too many times during product testing. All accounting problems are produced as a result of the execution of a transaction. With this in mind, any problem that gets logged as an accounting problem should also get logged as a functional problem on another team. Both teams are then charged with solving the problem.

4. Work toward accounting compliance before you go-live – Having to explain inventory valuation changes as a result of a go-live is not a trivial matter. Often times the valuation change is a direct result of simply adhering to the current corporate accounting practices. When sites can migrate to the local accounting practices before go-live, it is easier to explain the deltas of valuation at cut-over.

5. Configure banking early – As crazy as it sounds, getting bank masters loaded correctly can be a challenge. Many of the ERP transactions depend on the banking configuration, get it right early and take it off the table.

6. Put your Accounting Policy Change Review Process on steroids – Accounting processes and policies are not supposed to change on a frequent basis.  As a result, the corporate processes to adjust them are typically highly bureaucratic. Many of the deviations from corporate policy that you will find in the local country’s accounting are due to the reluctance of the corporate policy owners to adopt what is necessary to comply with local regulatory requirements. If you are implementing a global ERP configuration it will be necessary to deal with these issues in an expedient manner.

7. Pay the Premium – No company can afford to have unsatisfactory financial audits. In some countries the local CFO can even be held criminally liable if the books are not kept accurately.  Two practices that I would highly recommend are: A) Only hire consultants that have personally implemented the ERP system in the country you are deploying. This might involve utilizing resources not provided by your SI. And, B) have either your current internal auditor or another 3rd party auditor sign-off on the compliance of the design with local reporting requirements.

8. Provide your ERP Leadership Team with a lesson in accounting because it is always about the money!

For more advice regarding ERP deployments, check out Don’t Let Your ERP Program Go “Into Thin Air” and The Prisoner’s ERP Dilemma.

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