Why involve the finance team in your Association Management Software (AMS) project?

An association management software (AMS) selection and implementation project is a huge undertaking. The right people must be part of your project team, including finance or accounting department staff.

Representatives from the finance team must be involved from the project start and stay involved through the launch. If transactional data in your AMS is not set up correctly and going to the right places, your association’s books won’t balance—you can’t allow that to happen.

Why the finance team must be part of an association management software (AMS) project

Your colleagues in finance must ensure your new AMS accurately posts to their accounting software. They must have confidence in AMS data when preparing for your association’s annual audit.

A new AMS means changes to records, processes, and workflows—changes that affect financial operations. The finance team must be involved in discussions and decisions about requirements, selection, and implementation from the start.

Finance is at the core of the AMS’ purpose

Financial functions are central to the design of an AMS. AMS architecture is developed around an association’s need to track:

• Who paid money
• Who owes money
• Who is owed money

The AMS takes this information and translates it into subledger data for the accounting system.

• What account is the money credited to
• What account is the money debited from

The AMS also generates and tracks invoices, refunds, and transfers. Your colleagues on the finance team help you make sure the AMS gets it right.

Rely on the expertise of the finance team

The success of an AMS project depends on how well your team identifies and prioritizes requirements. Involve subject matter experts (SMEs) from the finance team—the ones who own different processes—in gathering system requirements, either in individual or group interviews and meetings.

Document the flow and details of accounting processes they follow on a daily, weekly, monthly, and annual basis, for example:

• Processing membership payments daily
• Reviewing and closing batches weekly
• Pushing subledger entries into finance system and reconciling the books monthly
• Preparing reports and documentation for the audit annually

Help your finance colleagues consider situations that don’t occur regularly, such as a check being returned for insufficient funds, a foundation donation included with a membership payment, or a member canceling mid-year and insisting on a refund. Find out how those transactions need to look in the new AMS.

The finance team are experts in the data required for crucial financial reports. In your request for proposals (RFP), provide a list of your standard financial reports so you can find out from each vendor whether their system provides the reports as standard functionality, or if the reports need to be created during implementation.

Project decision-makers must understand how AMS information is exchanged with the accounting software. Ask for the finance team’s assistance in drafting user scenarios for the RFP and vendor demos. By asking each vendor to go through a list of user scenarios, you can make apples-to-apples comparisons at selection time. For example, in demos, see how easy it is to create a financial report or disburse dues between accounts or affiliated organizations (like chapters).

By participating in demos, the finance team learns what the AMS can and can’t do, and whether a functionality can be configured or requires customization. This information is essential for the representative of the finance team who takes part in vendor selection discussions and scoring.

Gain the buy-in of the finance team

The finance team will become champions of the new AMS if they:

• Contribute to requirements
• Get answers to their questions
• Feel their concerns are addressed
• Participate in demos
• Take part in selection discussions

Ensure the finance team understands how the new association management software works

Get the finance team started on AMS training as soon in the project as possible because they need to know:

• What the data model looks like
• How items/products are set up for sale
• How revenue is/can be broken out
• How to run reports

When the finance team understands how AMS processes work and how data is connected, they’ll know what to do if something unusual comes up or if they make an error.

For example, if a payment towards accounts receivable is applied to the wrong company, it can feel stressful and time-consuming to fix the error. A responsible member of the finance team knows they can’t just delete it. They’ve already generated a ledger detail, which must be preserved for an audit trail. If they’ve had AMS training, they know exactly where and how to void the payment and show their work so auditors can see the transaction history.

Finance-related issues to anticipate during association management software selection

Every team is different, but we’ve identified a few common challenges we’ve identified from our experience with association clients and AMS transformation projects.

Change readiness of the finance team

Your co-workers in the finance department are not technophobes. They no longer write entries in physical ledger books, but instead use sophisticated accounting software. The technology they rely upon has changed over the years and continues to evolve, making their jobs easier.

But like every other human, they’re often resistant to change—and for understandable reasons. While procedures throughout your association have changed over the last decade, accounting procedures rarely do. The finance team must comply with standards that date back to the 1930s. Wes Trochlil, founder of Effective Database Management, explains why they seem that way:

“Unlike any other position in the association, finance people must work according to a set of rules (generally accepted accounting principles, or GAAP) that are imposed upon them by regulating bodies.” The finance team are also “held responsible for the financial health of the organization, ” which is assessed every year during the required annual audit by a third-party accounting firm.

Don’t try to protect your colleagues from the challenges of change by avoiding difficult conversations. They must be involved from the start because they can help you understand relevant accounting processes and standards, plus they need time to learn about the new software.

Access to historical transactions

If you don’t set limits, the finance team might want to migrate every transaction to the new system, which can be an unrealistic expense and use of time. The standard migration policy is to only export ledger entries for the current open fiscal year or one year back if you need that information for an audit. The rest are stored in an archived flat file that staff can access when they need older information.

Think about future data needs, for example, questions about membership tenure, purchases made, or revenue generated by sponsors and exhibitors. Create fields for that information so you can migrate that data over.

Desire for customization

Resistance to change often reveals itself in the least favorite phrase of every technology professional: “But we’ve always done it this way.” Sometimes, finance staff want to customize software to match their existing processes to the letter, rather than identifying crucial outcomes and remaining open to different ways of getting there.

Customization can be expensive, time-intensive, and often makes it more difficult to stay up to date with your vendor’s latest releases. You’ll likely need to hire developers to rewrite the code to make the upgrades compatible with your customized version of the code. Besides the additional costs and headaches, you’re still not on the same roadmap as the vendor’s other customers—the ones who didn’t customize and who can take advantage of regular software improvements.

When you hear “but this is how we do things,” ask why. Find out from the auditor if the existing process is truly necessary or if the AMS vendor’s way works as well. It’s entirely possible that your organization has uniquely specific needs that an existing AMS tool cannot support. A partner like Fíonta can help evaluate your requirements and recommend a scalable path forward for customizing your Salesforce instance.

Evaluating your AMS or starting a new AMS project can feel daunting, but involving the right teams from the beginning can save time and mitigate risk. If you or your finance colleagues have questions about the financial data and activities in an AMS, check out the Finance 101 series written by our Fíonta association finance expert.

Have any questions? Contact Fíonta today to schedule a call.