Being asked to decide how often to update your accounting system can make you feel like being asked to choose one of three doors on the American television game show, Let’s Make a Deal, hosted by Monty Hall. Pick the right door and you get several years of bliss with your new system. Pick anything else and you get second or third choice.

In actuality, the correct answer is not how often should you change your system but the process you use to do it. Here are seven key questions to answer. After that, we’ll address the frequency.

1. What is the business case for updating your current system?  

System updates can be as painful as pulling teeth. Are you sure you want to do this? What are the reasons and the business case for doing so? If you are not the decision-maker, you will need to have this information to justify the cost in dollars and effort.

In many cases the needs of an organization will have changed significantly from the time of the last system implementation. It may be you have outgrown the capabilities of the existing system, either because the organization has grown significantly, it has added new business units, there are new regulatory requirements, or customer requirements are necessitating change.

2. What does the future look like for your current software vendor? 

Your current software vendor may already be out of business or has abandoned the product. In that case, the answer is simple. Updating your current system to a newer version is not an option and you need to find a replacement as soon as practically possible.

In other cases, the vendor may only be milking as much out of the product before letting it fade into the sunset. Finding out the level of research and development and number of new customer adds over the past few years is a key indicator of the vendor’s commitment. Some companies, such as Sage or Epicor, have done well for themselves by accumulating a number of disparate accounting systems while committing limited funds for updating them. To be fair, each company has a few stars they concentrate on and you probably wouldn’t go wrong with any of them, assuming they fit your requirements.

The final point to consider here is the financial viability of the software vendor. Some, like Microsoft, are in no danger of going out of business. The greater risk with a company like Microsoft is whether they are committed to the product line or even business unit. While Microsoft does seem focused on growing their accounting and ERP product division, they are not equally committed to all of their products.

3. Do you like your current accounting system and where it seems to be headed? 

You might like it now, but major updates in software often involve a change in vision by the developer. Less than 50% of the DOS-based accounting system successfully made the transition to Windows. Many of them did not execute as well in Windows and lost their customer base. A DOS product formerly supported by our company had 40,000 customers before trying to make the move to Windows. After several years of banging their head against the wall, the developer eventually sold the Windows product along with just 1,700 customers to Sage.

Make sure you are confident about the product’s future, not just the software vendor.

4. If you are using a software reseller or partner, are you happy with the service you are getting?  

Sometimes people change systems because they don’t like the organization providing the service. The answer may be as simple as changing the service partner. Microsoft Dynamics NAV, as an example, has nearly 3,000 partners world-wide. You can contact the software vendor to find another partner but most often this information can be found on the internet. What can be hard to discern from an internet search is how effective the partner is.  If you make the effort to contact the software vendor and carefully explain your concerns, you will likely get one or two recommendations of partners capable of helping you out.  The software vendor doesn’t want to lose a customer. Nor do they want you to phone them again. They’re motivated to recommend capable people.

5. Is this the time to take a different technology direction? 

The most pressing question these days is whether you should make the move to the cloud from an in-house system. Organizations are becoming less and less interested in maintaining an internal IT department. For some, that means outsourcing the personnel but for others, they are interested in outsourcing the entire cost center. Laptops, yes. Servers, not a chance. The advent of Microsoft Office 365 and powerful, secure data centers based on Microsoft Azure and Amazon servers has totally transformed the choices available. If you currently have a purchased software license, ask your software vendor if there is a transition plan to the cloud and whether there are any transition credits for the value of your existing software license. Make sure you don’t let your software enhancement lapse if you are considering a move to the cloud. Otherwise, you will not have much hope of getting any credit.

6. Do you have a realistic approved budget? 

As consumers we have become spoiled by consumer updates that are almost totally pain-free and definitely cost-free. While that scenario is on the horizon for business software, it hasn’t arrived yet. A software upgrade can cost more than the original implementation, depending on the level of customization and how many versions your current software is out-of-date. In some cases, it is cheaper to re-implement your existing system or implement a totally new system. You will need to dig into this a bit further if you are considering an upgrade and get at least a rough idea to include in your budget for next year.

Investigating either a system upgrade or the implementation of a new system can take significant effort from a number of internal and external resources. In order to minimize the disruption to your people and get the proper amount of respect from software partners, you need to have an approved budget before you start the detailed part of the search. The software partners will be happy to help you with the rough estimates you need and provide the product overviews needed to determine whether their offerings are viable solutions.

7. What time of the year works for an update? 

This can be tricky as different groups within your organization may have different busy cycles. A updated or new mid-market accounting system can take anywhere from four to eight months to complete. Map out the busy cycles for your departments and match this to a detailed timeline for the project. It is generally a good idea to dodge quarter or year-end’s for go-live dates as the admin people are generally quite busy already.


So how often should you upgrade? Unless you have one or more specific and important business needs met by a new software system, you shouldn’t upgrade more than once every three years. That interval is generally short enough to ensure your software version will still be supported by the vendor and long enough to dull your memory from the last update. Every update enacts a high cost in both time and dollars. Don’t do it more than necessary but don’t put it off too long, especially if the needs of your organization have changed.