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The Aptitude Blog

ERP upgrade? Look before you leap.

November 12, 2014
Posted by Sarah Werner

The global nature of our world and the increase in M&A activity across many industries has meant more opportunity for growth but also more headaches for financial teams.

The need to consolidate multiple sets of GL balances and roll them up to a parent or corporate level is time consuming and error prone. When spreadsheets and legacy ERP systems become too difficult to accommodate, many organizations turn to the promise of a General Ledger upgrade, replacement or consolidation project thinking that the latest technology will solve all issues.

Is a General Ledger upgrade the right move?

Even at the conservative cost of $20M, a shift to the newest General Ledger technology cannot accommodate the level of detail required by today’s business users and regulatory bodies. In order to use an ERP system for financial consolidation, all subsidiaries (and future subsidiaries) must be on the same system, all charts of accounts must match and the product must include consolidation functionality such as inter-company eliminations, segregation of adjustments and audit trails.

Consider a detailed sub-ledger instead of a new ERP

Rather than overhaul your existing ERP system, consider leaving your infrastructure intact and implement an Accounting Hub with a detailed sub-ledger that will sit in between source systems, data warehouses and the General Ledger. You’ll achieve richer financial reporting, quicker monthly close, centralized accounting policies and audit security.

The benefits of a using a sub-ledger approach

Here are some of the benefits of using the sub-ledger financial architecture approach:

  • Leaves the old GL and current statutory reporting as is – a significant cost savings of anywhere from $20-$40 Million.
  • Creates a new single point of financial and accounting control making it easier to respond to regulatory changes.
  • Delivers a single sourcing and standardization layer between transaction systems and the accounting hub, which removes hard coded and opaque accounting logic.
  • Can handle modern business transaction volumes and can store transaction level detail for drill down and audit trails.

General Ledgers were never built to manage the daily volume of data that is now present in all organizations. By implementing an Accounting Hub and sub-ledger, you can resume using the General Ledger as it was meant to be used – as a tool to capture aggregated credits and debits for high-level financial reporting capabilities.

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This blog post was written by:

Sarah Werner
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