How To Write an Accounting Software RFP
You’ve been asked to send out a Request For Proposal (RFP) for accounting software. No biggie, right? Well, kinda — it’s a small biggie (mediumie?) if you haven’t done it before. But don’t worry, follow along, and you’ll be writing an amazing accounting software RFP in no time.
What is an Accounting Software RFP?
An accounting software RFP as a public “call” for different vendors to solicit your business, explaining why they’re the best option for your specific needs.
RFPs are comprehensive documents used to request vendor quotes and learn details about a vendor’s accounting software. It assists in decision-making and ensures your company chooses the best accounting software to meet its needs.
Do You Need an Accounting Software RFP?
Well, it depends. If you’re a large and complicated business, it can help your team save many hours sifting through options; if you’re a small and simple business, it’s likely more effort than it’s worth — you could just go look for small business accounting software and call it a day.
If you’re in one of those large companies, an accounting software RFP could help you by:
- Clearly defining what’s needed from accounting software — helping align stakeholders.
- Ensuring vendors understand all detailed requirements.
- Providing a structured way to accurately and easily compare different software.
- Establishing clear, objective, and transparent criteria for evaluation.
- Helping make informed decisions about which accounting software to choose.
- Negotiating pricing and contract terms to get the best value for your investment.
If an RFP is Overkill...
Then don’t worry — you’re still in the right place. Our team has evaluated the best accounting software on the market, with these vendors at the top of the list:
If an RFP is still the right option for you, keep reading.
RFP vs. RFI vs. RFQ
RFIs, RFQs, and RFPs are related, but distinct. Some or all of these documents may form part of your accounting software procurement process. Distinguishing the differences and when to use them can be confusing, so I put together a table to help.
Here’s what you need to know about each and when to use it in relation to different types of accounting software.
| Request for Information (RFI) | Request for Quote (RFQ) | Request for Proposal (RFP) | |
| What is it? | RFIs are used to get general information about a vendor’s software. | RFQs solicit a general quote from vendors based on your company's requirements. | RFPs are the most comprehensive document, used to request detailed vendor quotes about their software’s offerings. |
| When is it used? | This is the first step in procurement. It’s exploratory and high-level, and it determines whether a vendor’s software should be considered. | This is sent out after an RFI, typically seeking more information about a vendor’s software pricing. | This is the final document sent out once companies are serious about moving forward with implementing software. |
| Typical information to include | - A brief background about your company - General software, delivery, and timeline information from vendors | - Required software details - Request for pricing and payment terms - Evaluation criteria your company will use - Submission requirements and deadlines for submitting responses or amendments | - An overview of your company and project requirements - The scope of work - A list of questions for the vendor - Details about evaluation criteria, timelines for submissions, and how the process works |
Common RFP Mistakes
The RFP process can be riddled with challenges, which make it difficult to get the right results. Here are some of the most common ones:
- Insufficient background information or context is provided to vendors.
- There is a lack of clarity about what your company needs or wants. This creates guesswork proposals that deliver little or no value.
- No visible budget is shared, limiting the information a vendor can provide to meet goals.
- Essential information is missing or lost behind legal jargon.
- Vague guidelines or specifications.
A mistake I see all the time is companies not including the main terms and conditions.
A supplier might be awarded the RFP based on solution and pricing, but not reach an agreement in the contract review stage because of lingering details. Major terms can include items such as limitation of liability, insurance, and indemnity, among others.
One way to mitigate this risk is to include a company’s standards when it comes to these terms, and request a supplier to provide their markups as part of the RFP submission.
Accounting Software RFP Requirements
Before you can write the RFP, you’ll need to gather all relevant information and documents relating to your company’s accounting requirements. This provides the foundation you need to create a complete RFP. Requirements should include the following:
- Your company’s budget for the project.
- The business case justifying the need for the project.
- Cost benefit analysis or other types of relevant analysis.
- The full scope of the project.
- Any risks, assumptions, or barriers to success.
- Project sponsors and other key personnel, their roles, and contact information.
- Details about your existing systems, processes, gaps, strengths, and weaknesses.
- Details about the types of features and functionality required.
- Expected deliverables.
Key RFP Elements
With all the requirements and documentation in hand, you’re ready to start crafting your RFP. Include these key elements to ensure your RFP is comprehensive, informative, accurate, and complete.
1. Company Introduction, Purpose, and Scope
This sets the stage for what’s needed, why, when, by whom, and what to expect from all involved parties. You should include:
- Background about your organization
- Why you are issuing the RFP
- The scope of the project
- What you hope to achieve
2. The Details
Detail all elements or components to be included in vendor responses. This structured approach will help your company evaluate each vendor solution fairly to make an informed, data-driven decision.
- Specific functionalities: How modules in the accounting system should work.
- Integrations: How information will flow to and from other software applications or systems.
- Scalability: How long your accounting software will support company growth.
- Features that are important to your business, such as permission tiers, approvals, and dashboards.
- Evaluation criteria: How your company will evaluate vendor solutions.
- Request for pricing: The all-in cost for the solution and support.
- Request for vendor experience: Details about how long the vendor solution has been around and how many successful implementations they have under their belt.
- Request for customer support information: Service Level Agreements (SLAs) and what’s included in the initial price.
- Implementation plan timeline: Information on the project milestones and deadlines.
- Submission guidelines: Detailing how and when vendor RFPs need to be completed.
Who’s Involved in the Accounting Software RFP Process?
Implementing accounting software is a complex undertaking. It should involve all relevant stakeholders, such as:
Project Sponsor
Typically, the CFO or CIO is responsible for spearheading the accounting software project and supporting the project manager during implementation.
Project Manager
This is the person who will lead the accounting software implementation project.
RFP Proposal Writer
These writers typically work in procurement and specialize in writing documents like RFIs, RFQs, and RFPs. They work with other key stakeholders to gather information for writing and assist with evaluation.
Accountants
Accountants and other finance team members will provide documentation and input about requirements, processes, and other relevant information.
Other Functional Area Stakeholders
These may be end users, IT team members who work on the system implementation, or others from different teams working alongside accounting.
Change Management Specialist
When software systems change, so do processes. This requires specialized knowledge about how to address change effectively — aka, where change management specialists become essential.
Software Vendors
The selected software vendor will work with project leaders and all other stakeholders to successfully implement and support accounting software.
How To Write an Accounting Software RFP
Some companies and vendors choose to go the route of RFP presentations to replace formal, lengthy RFP documents. Whether you choose a presentation or RFP template, you’ll need to provide the same information and ask the right questions.
Step 1. Write Your Company Intro
Start by using an industry specific RFP template to clearly define what your company is about, and the objectives for the RFP.
Step 2. Outline Scope and Budget
Outlining the scope of work for the chosen accounting software project ensures all vendors understand what should or should not be included in their proposal. Remember to include any built-in assumptions.
Make sure to solicit information from vendors about these types of elements:
- Pre-existing requirements
- The implementation timeline
- A list of deliverables
- Pricing
- Vendor submission guidelines
- Who will be involved in the process
Including a pricing template that caters to the industry of the solution being RFP’d brings significant value to the process. Here are some of the benefits.
Standardization – This ensures that all supplier submissions follow the same format, ensuring consistency and enabling procurement to evaluate proposals objectively.
Efficiency – Allows suppliers to complete the requested information easily and avoids follow-up meetings to clarify information submitted.
Transparency – This allows for pricing breakdown and visibility to a level sufficient to cover all cost variables and components.
For example, a technology professional services pricing template can include sections to capture important variables that affect pricing, such as onshore/offshore mix, seniority, and responsibilities.
Step 3. Write Targeted Details
Provide targeted details about what the software will need to help you and your accounting team achieve. Make sure to ask precise systems questions from vendors about these elements:
- Specific functionalities required
- Accounting features that are important to your business
Some of the most common details include:
- Role based dashboards
- Necessary integrations
- Scalability
- User interface
- Accounting modules and workflow
- Project accounting
- Data entry features
- Requisitions and purchase orders
- Accounting for fixed assets
- Collaboration
- Routing approvals
- Accounting standards
- Sales tax and compliance
- Budgeting and forecasting
- Real time reporting capabilities
- Bank reconciliations
- Internal controls and audit trails
- Role based security
- Contract management
Additional information to request from vendors:
- Vendor experience like case studies
- Customer support information or sample agreements
- Recent referrals
Step 4. Send RFPs to Vendors
It’s essential that you identify the right RFP contacts or account executives to send your company’s RFP to — ideally, simultaneously. The delivery method should be the same, too — preferably digitally.
Remember to provide structured response guidelines to allow all vendors a fair playing field to review and respond on time. All details about contact persons, evaluation, and deadlines should be clearly marked.
Step 5. Evaluate Responses
Once vendors submit their responses, it’s time to evaluate them carefully and fairly. This step is just as important as crafting the RFP. Why? If either is done incorrectly or haphazardly, it can be inaccurate, frustrating, and costly.
Defining your evaluation criteria and variables at an early stage in the RFP process — and mapping them to your business and technical requirements — will help rationalize and provide structure to your evaluation process.
One way to do this is to categorize the requirements in the supplier response section to map to your evaluation variables. This also advocates a seamless process for all stakeholders taking part in the evaluation.
Your company should also create a scoring system and use a matrix-style template for evaluating RFPs. This will make isolating differences and similarities easier and help you make the best decision quickly.
Step 6. Confirm and Clarify
During the RFP evaluation process, there’s a good chance you’ll have additional questions for vendors. Why? Not all vendors will provide the level of detail you’re looking for, while other responses will raise additional questions or concerns that need to be addressed.
You may need to ask for clarification on responses to compare apples to apples, before shortlisting vendors and finalizing your selection.
As the adage goes: “Measure Twice, Cut Once.”
Step 7. Select the Best Accounting Software
Once you’ve decided which vendor accounting software system to use, don’t just notify that vendor of the successful bid. Respondents put an immense amount of time and energy into RFP responses, so be courteous and notify unsuccessful bids, too.
Expect other vendors to have questions about why their solution wasn’t chosen. Take the time to answer them. It helps them with continuous improvement. You never know, you may cross paths down the road and select their accounting solution next time.
The Best Way to Structure Your RFP
Structure your accounting software RFP in a clear and logical manner, so that vendors can easily understand and respond to your requirements. Well-structured, organized RFPs help you receive relevant, detailed proposals that effectively address your system needs and business goals.
You’ll want to include:
- Cover page that tells vendors it’s an RFP for an accounting system for your company.
- A table of contents that outlines the sections of your RFP and makes it easy for vendors to navigate the document.
- An executive summary that provides a high-level overview of your requirements and goals.
- Pages with detailed sections that include:
- Your organization's background
- Scope of work
- Requirements
- Evaluation criteria
- Submission instructions
- Addendum for sample or supplementary data
Each section should be clearly labeled and structured in a logical order to guide vendors through the document seamlessly.
RFP Issuance Timeline
Establish a clear RFP issuance timeline to ensure a smooth and efficient software selection process. On average, RFP creation and issue time takes between one and three weeks. Then there’s vendor response time, evaluation time, and follow-up and selection.
While response time will vary depending on the complexity of the RFP, on average, vendor response times range from 27 to 38 hours, depending on company size.
- Small and mid-sized companies: 27 hours
- Mid-market organizations: 31 hours
- Enterprise teams: 38 hours
Building the case for accounting software and selecting the right solution can take two months or more.
Leverage RFP software and templates, develop standardized processes, and clearly communicate realistic response due dates to vendors to reduce the end-to-end RFP timeline. This will allow vendors ample time to review the RFP, ask questions, and prepare their responses.
Getting Your RFP in Front of the Right People
You want to get your RFP to the right person, right? This means developing a targeted distribution strategy. Start with these tips:
- Identify potential vendors offering accounting software in your industry.
- Reach out to vendors directly and use RFP software to distribute your requests.
- If you’re not sure where to start, partner with a procurement specialist or consultant to help you identify and contact reputable vendors.
- Consider attending industry or networking events with RFP professionals to discuss your RFP and attract qualified vendors.
Evaluating Accounting Software RFP Responses
Once you’ve received and reviewed all accounting software RFP responses, it's time to evaluate and compare the proposals to determine the best fit for your business. Here are some best practices to cut through this sometimes overwhelming task.
- Create a scoring matrix: Based on your evaluation criteria, objectively assess each proposal against your requirements.
- Score each vendor on key criteria: Factor in functionality, integrations, scalability, vendor experience, pricing, and customer support.
- Weight criteria based on importance: Understanding your business challenges is important to ensure that you prioritize the features that matter most to you.
- Shortlist top vendors: Identify the top three vendors that best meet your needs, then schedule follow-up meetings or demonstrations to evaluate their offerings further.
- Ask detailed and clarifying questions: Clarify any uncertainties and negotiate pricing and contract terms to finalize your decision.
Key Considerations When Evaluating RFP Responses
Here are some additional considerations to consider when evaluating RFP responses.
- Look for vendors that demonstrate they clearly understand your business needs and offer innovative solutions to address your challenges.
- Consider the vendor's experience in the accounting software industry, customer references, and implementation track record to gauge their credibility and reliability.
- Evaluate the vendor's pricing structure, licensing model, and ongoing support services to ensure that the software aligns with your budget and long-term needs.
- Consider conducting vendor demonstrations or site visits to see the software in action and interact with the vendor's team.
How well you write your accounting software RFP is pivotal to selecting the right software solution for your business. By sharing your company goals and purpose for the software, clearly defining your requirements, structuring your RFP effectively, and evaluating vendor responses thoroughly, you can make the best decision that aligns with your business goals and budget.
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