Everyone is excited (or nervous) when word gets around that a new accounting system is being installed. Someone gets more nervous than others and decides to make a “shadow system” —a duplicate of the current accounting program. Perhaps they plan to keep the information on spreadsheets or in database files “just in case” the whole new system crashes. Or something like that.
The fear is real, and so is the problem. But let’s talk about a bigger problem: duplicate or shadow systems are just plain bad for accounting departments, and here’s why.
Don’t fear a new accounting system. Fear the repercussions of shadow accounting systems. Duplication is a bad thing when it comes to accounting and can lead to data inconsistencies, wasted resources, and accounting mistakes.
What Exactly Is Duplicate Data Entry and Why Does It Happen?
Duplicate data entry occurs when employees record the same financial transactions or information in both the new accounting system and an unofficial secondary source. They may keep a spreadsheet or continue to maintain the old system if it’s not sunsetted.
The problem is that it is maintaining a parallel financial universe. This parallel universe does not have the same controls or oversights as the new system. And it increases the risk that people may refer to this shady, parallel universe as the source of accounting truth rather than the new platform.
People create secondary systems for many reasons. Mostly, it’s fear of the unknown. Sure, a new accounting system sounds good, but it’s always a big leap of faith to try something new. To protect themselves against this fear of the unknown, they keep duplicate records. Poor change management, a rushed implementation of the new accounting system, inadequate training, and a lack of leadership buy-in also contribute to the fear of change, which inspires people to create duplicate systems and backups.
Why It’s a Problem You Can’t Ignore
It would be great if you could just chalk up the secondary system to so-and-so, who is always a worrywart, and go on with your day. But you can’t ignore it. Duplicate systems are problematic in many ways.
They create:
- Data inconsistencies and errors, which can lead to misclassifications
- Mistakes that compound over time because they aren’t corrected
- No single, authoritative source of financial truth, which leads to more mistakes
- Wasted time and resources—after all, the time spent updating the second system is wasted time!
- Security and compliance risks—sensitive data may be stored in ways that anyone can access, leading to security nightmares
- Poor decision-making because financial records are inconsistent
Duplicate Systems Are a Warning Sign
Duplicate or shadow systems are actually a warning sign of a deeper problem. They are a sign that the team is nervous about the new system implementation. To address the root of the problem, you must take a step back from “We need to get rid of the shadow system” and focus on “How did we get to this point in the first place?”
First, focus on the new system. Have you emphasized proper training so that everyone feels confident they can use the system and get the information that they need? Greater familiarity with the new accounting system may be more persuasive than anything else when it comes to getting staff to relinquish duplicate systems.
Ensure that the company’s leadership is part of the process. They must not only buy into the new system, but they must take the lead in using it. When the team sees that leadership is fully onboard, they will be more likely to use the new system too.
Lastly, be clear that you do not duplicate systems. No exceptions. Allowing exceptions weakens and undermines your position that the new system will be better than the old one.
Eliminate Duplicate Systems and Move on to the New
Duplicate systems can feel like a safety net during times of transition. Any transition to a new computer system, whether it’s the accounting system or a new storage system, can feel uncertain. But allowing shadow systems just sets up problems and reduces adoption of the new system. Get rid of the fear first, then ensure understanding and executive buy-in. These steps will go a long way to keep shadow systems away.
Welter Consulting
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.
Recent Comments