What CFOs Want a New ERP to Prove

Raisin helps savers shop for better rates on savings accounts and CDs from banks and credit unions, but its own books are staying right where they are.

“We’re currently running NetSuite and aren’t actively looking to move away from it,” Jonathan Kim, Raisin’s US CFO, told CFO Upside. “I’ve been following some of the newer cloud-native platforms, and their native AI capabilities and connectivity are interesting.” For the system that keeps the books, he puts more weight on privacy, controls and reliability.

“Raisin handles people’s money, so we need to be confident that our core financial systems are established and work consistently,” Kim said. “I’m generally more comfortable adopting proven technology for those critical functions than taking a risk on a platform that hasn’t been fully established.”

Raisin already uses automation for invoice tagging and payment processing, and Kim sees room for AI in financial modeling. One of his top priorities in finance at the moment, he said, is finding “someone comfortable with both financial modeling and AI-driven analysis who can evaluate trends, model different scenarios and help inform business decisions.”

Test the Messy Stuff

Tom Hood, executive vice president of business growth and engagement at AICPA & CIMA, would bring actual jobs to a vendor demo. Hood, a former highway construction company CFO in the late 1990s, would ask the vendor to process change orders and retainage, then show how the job ledger ties to the general ledger and financial statements.

“Test against transactions we’ve already validated, including messy exceptions,” Hood told CFO Upside. He’d want to know how significant the errors were and when the software stopped to ask a person for help.

“Clearly distinguish what it can recommend from what it can execute,” Hood said. For an AI-prepared journal entry, he’d look for a record of what the system proposed, who approved it and what was posted. He’d also make the vendor show that AI couldn’t bypass an approval limit or post into a locked period.

Then comes the parallel close. “Before switching, run [a test] alongside the existing ERP through multiple closes, reconcile the differences and resolve material issues,” Hood said. Closing in both systems lets a controller see how the new one handles a full month of transactions on a reporting deadline.

Brian Aubuchon, a managing director at accounting advisory firm Riveron, would check which parts of the system an independent auditor tested. A SOC 2 Type 2 report covers security and any other trust services categories included in its scope.  A SOC 1 looks at a vendor’s controls relevant to its customers’ financial reporting. “For an ERP supporting significant accounting processes, a SOC 1 Type 2 is key because it includes testing of control effectiveness over a defined period,” Aubuchon told CFO Upside.

He’d also check whether the modules and AI features the company plans to use are in scope, which period the report covers and what exceptions the testing uncovered. He’d also check which controls the vendor expects the customer to perform. “A SOC report provides assurance over the vendor’s controls, but management still owns how the ERP is configured, who has access and how transactions are reviewed,” he said.

Aubuchon said CFOs should look at what the provider can show an auditor about an entry an AI agent prepared. “The evidence should identify the source data, the agent responsible, the relevant instructions or configuration and any subsequent changes or overrides,” he said.

With an IPO on the horizon, Aubuchon would be wary of a vendor without a SOC 1 Type 2 report because it can make it harder for auditors to rely on the vendor’s controls. PCAOB standards also allow auditors to gather evidence by testing controls at the vendor or by testing how the customer oversees the vendor’s work.

Debits Are in the Details

Kenneth Paqvalén, CFO of finance applications provider Aptitude Software, which makes the AI-native ERP Fynapse, would ask how much detail survives when a transaction reaches the ledger. He ran into that question at Matillion, a data integration software company that moved toward usage-based pricing during his tenure as CFO from 2020 to 2023.

Paqvalén said Matillion’s revenue came from millions of usage events across customers, products and regions. Leadership wanted to see unit economics and retention by cohort, but the company’s ERP was set up to receive a summarized journal entry at month-end.

“Aggregation is a one-way door: You can summarize detailed data later, but you can’t recover the detail from a summary,” he told CFO Upside. “Can finance trace a number back to the original event and the accounting rule that produced it?” He’d also ask whether finance could change that rule without turning it into a major IT project.

“I’d start with what Finance needs to achieve and whether its current architecture can support that,” Paqvalén said. A company could keep its existing ERP for payables, receivables and reporting, he said, while a separate system preserves transaction detail and applies the accounting rules. Aptitude sells software for that work.

If both systems report the same revenue in a parallel close, pick a figure the board is likely to ask about. Have the controller trace it back to the original transaction and show which accounting rule put it in the ledger.

Have You Tried Turning It Back On? Before the old ERP goes dark, Hood wants to know what happens if the new one does. He’d ask to see the results of a recovery test and get clear terms for exporting the company’s records. “Can my controller explain the numbers, can my auditor verify them, and can we recover when something goes wrong?” Hood said he’d ask a vendor.