by Joe Gleinser
20. July 2009 22:49
In this final installment on this round of M&A, I'll focus on preparing for the transition. These tasks can simplify the integration process while reducing your organization's risk. Click to read Part I and Part II.
User Security: Internal employee abuse is a major risk. Many unknown new employees will have access to your network and data. An aggressive computer monitoring solution can mitigate those risks. Logging all user activity tends to improve behavior on network systems. Improved behavior minimizes employment risks, such as sexual and racial harassment. Logging also deters intentional damage to your systems. Security cameras and door access control installations can add an element of protection to inventory and company assets. Door control systems allow you the ability to terminate an employee's access to buildings or areas instantly and completely.
User Limits on Technology: It is likely that your existing technology infrastructure has a user limit near your current utilization. Most technology vendors offer heavy discounts to small and mid-sized businesses. These discounts are removed at fixed employee increments. For instance, Microsoft no longer considers a business "small" after 50 employees. You may find that as you grow employee count, the per-user technology expenses increase substantially and suddenly. Investigate technology costs of the combined organization prior to the acquisition.
Accounting Security/Auditing: Quickbooks and other basic accounting packages offer limited user security within the application. Transactions such as invoices and purchase orders may be deleted. This leads to two of the most common forms of employee fraud. In the first, the employee erases invoices to steal the payment. In the second, fraudulent POs can be erased allowing the criminal to steal the ordered goods. Advanced accounting systems prevent this abuse and allow more granular security in user rights.
Accounting Transaction Limits: Every accounting system has transaction limits after which performance and reliability erode. There is a dramatic difference in the transaction limit and overall price of the first tier of accounting applications from the second tier.
Chart of Accounts Organization: As the complexity of your chart of accounts increases, you should consider a more advanced accounting package. One benefit of high-end solutions is advanced chart of accounts capabilities. Many can also manage multiple, independent organizations in a single database. This has been the mainstay of the oil and gas industry as well as other investment management organizations for years.
IT should have a prominent role throughout the M&A process. Not engaging them early enough presents significant financial risk.