The fiscal year can be changed after implementation with the prior fiscal year configuration staying intact for historical purposes

Description

The ability to change the fiscal year post-implementation in Corporate Performance Management (CPM) software may come up for organizations at some point. This function allows organizations to adjust their financial reporting periods in line with new financial or business strategies without discarding or altering the configuration of prior fiscal years, ensuring that historical data remains accurate and intact for comparative and long-term strategic analyses.

Example Use Case

Scenario: A SaaS business started their company as a small seed funded operation in Quickbooks. It made sense at the time to run the business according to a standard Jan - Dec fiscal calendar to make reporting and taxes easier. Their business grew and they realized that ending the year in December was challenging for their end of year sales push, as most customers disappeared in the middle of December for the holiday season.

Solution: With the feature of changing fiscal year while preserving historical data, the company can transition to their new fiscal year without disrupting past records. The CPM software keeps the prior fiscal year configuration intact, enabling them to keep track of performance trends over the years despite the change.

Considerations

The majority of systems on the market will require a re-implementation if this occurs. In some cases the system with the original fiscal year will remain intact, and a new instance will be implemented with the new fiscal year. If prior data is imported into the new instance, it usually will be transformed into the new fiscal year formal. This makes reporting incredibly challenging over the long term.

That said, sometimes organizations need to rip off the band-aid and push through on this requirement. If there is a possibility of this occurring in the future, we recommend that this shift takes place before investing in a CPM system. This will allow the implementation team of the selected product to plan for this when doing the initial implementation. It is always more expensive to make major structural changes after implementation than it is to do it in the first place.

Questions to Ask a Vendor

• Cost Impact: Will we need to purchase a new instance of your software to accommodate this issue?
• Post-Implementation Fiscal Year Changes: How easy is it to change the fiscal year in your software?
• Historical Data Impact: Will changing the fiscal year configuration impact our historical data? How do you ensure its accuracy thereafter?
• Transition Support: What support do you provide during the fiscal year transition? How will this affect our ability to use the software during the transition period?
• Analysis Capabilities: How does your software handle comparisons or trend analysis over the years when there's been a change in the fiscal year?