A new ERP or accounting system promises better data, less manual work and faster reporting. But the finance module is where small configuration mistakes turn into large accounting errors, and those errors often surface months after go live, when they are hardest to unpick.
The best protection is testing by people who understand both the system and the accounting. Here is what finance should check before signing off.
1. Chart of accounts and dimensions
Everything else depends on the structure of your ledger.
- Does the chart of accounts support the reports you need, including statutory, management and tax?
- Are dimensions, such as department, location, project or class, set up consistently and made mandatory where needed?
- Are control accounts (receivables, payables, inventory, bank) locked against direct manual posting?
2. Opening balances and data migration
Migration is where many implementations go wrong quietly.
- Does the opening trial balance in the new system agree exactly to the closing trial balance in the old one?
- Do open customer and supplier items agree, invoice by invoice, to the aged reports from the old system?
- Have master data records (customers, vendors, items, fixed assets) been migrated completely, with correct tax and payment settings?
Keep a signed migration reconciliation. Auditors will ask for it.
3. End to end process tests
Test full processes, not individual screens. For each one, follow a transaction from start to finish and check the accounting entries it creates.
- Purchase to pay: purchase order, goods receipt, supplier invoice, approval, payment, bank reconciliation.
- Order to cash: sales order, delivery, invoice, customer payment, credit note, write off.
- Record to report: journals, accruals, prepayments, depreciation, month end close, financial statements.
- Inventory, if applicable: receipts, transfers, adjustments and costing.
For each step, write down the expected journal entry before you run the test, then compare it with what the system produced.
4. Tax configuration
Check that the right tax codes apply automatically to the right transactions and that tax reports agree to the ledger. Tax errors are expensive and repeated on every transaction until they are found.
5. Reports
Run the reports you will rely on every month: trial balance, profit and loss, balance sheet, aged receivables and payables, and any management reports. Check that they agree with each other and with the ledger.
6. Permissions and approvals
Confirm that users can do what their role requires and nothing more. Test approval workflows, including what happens when an approver is absent. Check that no single user can create a supplier, enter a bill and release its payment.
7. A parallel run
If you can, run the old and new systems side by side for at least one month end and reconcile the results. It is extra work, but it is the most reliable way to prove the new system is producing the right numbers.
8. Defects and sign off
Log every issue with steps to reproduce, the expected result and the actual result. Retest every fix. Sign off only when critical and high priority defects are closed and the workarounds for anything remaining are documented.
Why accountants should test
Implementation partners know the software deeply, but they are not always the people who will close the books on it. Accountants test differently: they look at the journals behind each screen and ask whether the numbers make sense.
Our team has experience testing and implementing ERP and accounting systems from the finance side. Read about our ERP testing and implementation service or book a free call to discuss your project.
This article is general information, not advice for your specific situation.
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