Sit down and get a good grip on your chair as you read this because I am about to suggest a radical idea. The next time you implement a new ERP or financial control system, consider scheduling your go live for mid-month. “But…we must have a clean cut-off!”, you say. “You have to schedule a Go Live for the first day of a new month! Everyone knows that!!!” I’m reminded of my mother and something about a bridge from which other people are jumping. I invite you to suspend judgment on this “Go Live on the first day of the month” question, put down those rocks you gathered to stone me, and let me tell you why.
Traditional Logic of Going Live
It makes sense that you’d want to launch your shiny new system on the first day of the month. You will have correct opening balances for the GL in the new system, and closing balances from the old system to which you can tie back. Sounds perfectly reasonable. But, if we think about it, no one has the month closed on the first day of a new month. And, unless you are running a batch system on a mainframe circa the 1980s, your GL balances can be pulled anytime, even on older, legacy, mid-range software.
As long as all of your data has been entered and posted, the GL will be just as correct on March 15 as it will be on March 31. In many companies, things are more correct on March 15 because they have had fewer new transactions entered, and, therefore, fewer opportunities for something to go wrong. If, at month end, you tie out your AP and AR subsystems to the corresponding control accounts in the GL (you ARE tying out your subsystems every month, aren’t you?), tie out inventory valuation, and reconcile your bank statements, your beginning balances should be correct. Granted, you may have some expenses that need to be reclassed. But that is almost always the case, and can be done in the new system just as easily as in the old one.
“But, why go live mid-month?”
Good question. First, there is nothing sacred about the 15th of the month. It’s a self-imposed, artificial ‘best practice’. I recommended you pick a Monday after you have closed the prior month as your go-live date. This mid-month date will help your team in a variety of ways, including:
- No double-duty: You avoid trying to close the month in the old system while processing work for the new month in the new system. In most companies, month end close brings the additional work of the close, and there is usually a close deadline to meet. Adding the pressure of bringing a new ERP system live to the month end close process just increases the probability of mistakes, and generally makes life more difficult for the accounting group, Controller, VP of Finance, et al.
- Focus: A mid-month close means that your accounting group has completed last month’s close, issued financial statements, and can now focus on getting the new software into production with a minimum of distractions, mistakes, problems, and heavy drinking.
- Time for Data Work: You also have less current-month data to analyze if there are any data conversion or data validation issues to work through. If we have made multiple trial data migration runs in the time leading up to the final data conversion, we should not have any problems with the final data migration. But, if Murphy shows up with his law, having 12 -15 days of data to work through instead of 30 may be a big help.
- Less Data to Sift Through: Another advantage to a mid-month go-live date is that our first month end close on the new system is done with only half a month’s data. Again, this should not be an issue. But, if there are close issues, having less data to analyze can sometimes make life easier.
- Fresh Mind: One other advantage to a mid-month go-live is that both the accounting staff, and the reseller or consultant who assisted with go-live, are only a few days removed from that first week on the new system by the time we start the month end close process. All of us are more likely to remember the details of a problem in AP if it happened 10 days ago, as opposed to 30 days ago.
At this point, you are, no doubt, shouting “Hallelujah, brother!!! I have seen the light!” or, you might be saying “Hmmm. I’ll consider this.” Either way, the sample go-live calendar should help illustrate what the mid-month Go Live could mean to you.
Mid-month Go-live Sample Timeline:
Let’s assume we are bringing a new ERP, or financial control software live in March of 2021. March 15th, 2021, is on a Monday (amazing how that worked out so well…). Here is a potential timeline.
- Wednesday, March 10: February close in the old system is complete, and financial statements are issued.
- Friday, March 12, 12:00 PM,
- All processing in the old system is halted.
- The old system is set to “Read Only” for all users.
- Data validation reports and file dumps for use on Monday are run in the old system. These are reports such as AP and AR Agings, GL Trial Balance, vendor and customer record counts, etc.
- Final back-up copies of the old system data are made.
- Friday, March 12, 3:00 PM; A copy of your data, and copies of your validation reports, are turned over to the implementation consultants. Over the weekend, they will migrate the data into the new system, conduct data validation checks, and have the new system ready for work by Monday morning, 03/15/2021.
- Friday, March 12, 4:30 PM; The CEO comes into the accounting office and says “My husband’s charity is selling tequila as a fund raiser. I need a check for $250.00 right now.” The accounting staff stares in disbelief at the CEO. Then, she adds “Oh, did I mention that 6 bottles of the tequila are coming to the accounting office for all of your hard work.” The accounting staff is all smiles. The assistant controller says “No problem. We have a procedure in place for this. I’ll fill out this check request form for you, you can sign it, and we will cut the check. We will then segregate these source documents so that we can enter them into the new system Monday morning, and enter the amounts as reconciling items for our data validation.”
The Following Week:
- Monday, March 15, 8:00 AM; The new system is ready and the migrated data is in place. The accounting staff runs the same validation reports (AP and AR Aging, Trial Balance, record counts from vendor and customer master files, etc.) from the new system and compares them with the old system. Reconciling items, such as the $250.00 check for the “charity”, are factored into the data validation, and the two systems are tied out to each other.
- Monday, March 15, 10:00 AM; Processing in the new system starts.
- Friday, March 19, 4:00 PM; The tequila is delivered to the accounting office, the doors are locked, and the celebration begins.
The Moral of the Story
Over the last 30 years, we have run many implementations with a beginning of the month go-live. It can certainly work. With the exception of the tequila, we have also run this mid-month go live scenario many times. It just works better. From our perspective, the mid-month go-live is easier on everyone, especially your staff. Just some heresy for you to consider.
And as always, GDS21 is here to answer any questions you have. You can reach us at firstname.lastname@example.org or 770-497-2368.