While it may be too early to think about ‘Spring Cleaning’, the time for ‘Winter Cleaning’ is NOW!
If you’re asking yourself what’s Winter Cleaning, think of it as the ‘cleaning’ every organization needs to do in their ERP software at the end/beginning of the year. Just like Spring Cleaning, its purpose is to get rid of, or put into storage (aka archive) things you no longer use, but are not ready to part ways with entirely.
We can apply this idea to our ERP systems to ‘clean them up’ so they are optimized for day-to-day use. You will be surprised how much more efficiently your business runs when your software system is clutter-free. As you might with Spring Cleaning, if this task seems overwhelming or too time consuming, taking a room-by-room (module-by-module) approach can make it more manageable.
In General Ledger, look for accounts and subaccounts no longer in use. Setting them to inactive allows historical data to be retained and prevents them from being accidentally selected during transaction entry in the future.
Remember, the system runs faster when it only needs to look through active records during searches and queries. Update or enter new budgets to reflect projections for the new year. There is no need to purge data. With your new budgets in place, you can rest assured you are measuring results against the new projections.
In Accounts Payable, it’s a good time to make sure all of the bills are paid that can be paid. Then, review the list of vendors and set those you no longer plan to do business with to a status of Inactive. If you plan to use new vendors for orders and services, now is a good time to add them in the system, including W-9 information, if applicable.
Having new vendors ready for selection when you need to make the next purchase or contract for their services, allows the accounts payable staff to focus their energy on getting the best prices and rates rather than worrying about system setup. In the case of large orders or contracts, the savings can add up.
Companies that take responsibility for payroll internally should remember to update employees, deduction withholdings, and tax rates periodically. Keeping deduction withholding amounts and tax rates up to date ensures accurate payroll processing. Specifically at the end of the year, after W-2s are finalized, it’s even more important to make sure that terminated employees are set to inactive.
This will eliminate them being accidentally included in the first payroll of the new year. Payroll calculations process more quickly when terminated employees (set to inactive) are no longer included in the calculation. Winter cleaning is also a good time to make sure you have up to date address information for your employees. This will be beneficial when you need to send W-2’s.
If you keep track of inventory items, set those you no longer plan to track to inactive status and set up new ids for any new items you plan to use in the coming year. Before setting the status to inactive though, remember to make sure the quantity (qty) on hand is zero and the inventory item has no remaining value.
When the inventory items, with zero quantity on hand, are marked inactive, your ability to find the active items will improve. Reports will be shorter as they will no longer include the now inactive items. Organizations that carry a large volume of different items will particularly benefit from this clean up task. Queries run faster when data optimization is complete. Remember also to deactivate sites, warehouse locations/bins, and lot serial numbers no longer needed.
Project focused organizations should review projects, tasks, and labor accounts no longer needed and set to inactive. Review budgets and update them to reflect the predictions for the future year. Accurate analysis of projects can make the difference in meeting a deadline or staying within budget.
Removing clutter allows project managers to make quick decisions, which often are needed to secure additional funding for projects. Now is also a good time to review your resources (employees and subcontractors). Set those no longer providing project services to inactive status, this will make resource assignment more efficient.
Winter cleaning can often go undone when the business is running at full speed. Left untouched, they create clutter in your ERP system and slow down day-to-day processes, with users giving little thought to what might improve processing. As the clutter increases, your employees may eventually feel the same level of stress and frustration as a homeowner who neglects ‘Spring Cleaning’ for multiple years and whose drawers and closets are pushed to overflowing. Prevent frustration and stress by performing your “Winter Cleaning” today.
If you have additional ‘Winter Cleaning’ tips or questions, please send them to firstname.lastname@example.org for inclusion in future articles.