Digital Transformation for Medium-Sized Enterprises:A Finance Director’s Guide. Part 1

By Darren Cran UK Managing Director of AccountsIQ

In June 2017, an Accenture (NYSE: ACN) survey of nearly 800 financial services executives across Europe, Asia and North America revealed that more than half, plan to increase their investments in major corporate transformation initiatives over the next 12 months. Accenture cites that these “change programs” are driven by a number of factors including “cost pressures, new regulations, increased customer expectations and digital disruption.”

Image courtesy of Accenture

This isn’t just happening in financial services, this “digital revolution” is an opportunity for business leaders in every sector to significantly change the way in which they operate. With the finance team at the heart of strategic direction, who better to step up to lead the change than the Finance Director?

Part 1: Evaluating the Status Quo

Digital Transformation for Medium-Sized Enterprises: A Finance Director’s Guide 2

At the most fundamental level, the finance lead needs to ensure that day-to-day departmental processes are in place and that reporting packs are delivered while continuing to act as custodian of assets and resources. But the Finance Directors who really make an impact are those who have the confidence and know-how to tear up the processes of the past and implement new systems which will deliver management insights, not just reports, in record time.

Finance Directors of smaller enterprises have had affordable Cloud accounting options for some time; applications which are sold in the Software-as-a-Service (SaaS) model (subscribed to via a web portal for a low monthly subscription) perform brilliantly for basic accounting. The level of knowledge and confidence required to choose and use one of these software packages is low. However, FDs who need more advanced accounting or more flexibility in reporting have struggled to find an affordable Cloud solution to their problems. For them, migrating to a new system with new processes comes with a much higher level of risk and investment.

Is my finance system adding value or just adding up?

“FDs who need more advanced accounting or more flexibility in reporting have struggled to find an affordable Cloud solution to their problems.”

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Cloud accounting softwareThe great news is, advancement in Cloud accounting software for the middle market is making it not only more affordable and feature-rich but also easier to use.

There is now an established range of Cloud accounting applications which goes beyond the typical SaaS model to provide flexible set-up and tailored implementations (producing customised reports). For the well-prepared FD, these implementation projects can happen in days or weeks, not months or years. The benefits will quickly become evident as they turn the tide on cumbersome processes and release precious time for planning and control.

Is Your Finance System Adding Value or just adding up?

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If you’re using an on-premise finance system or an older legacy system, there’s a BIG surprise for you around the corner. If you aren’t already converts to the efficiencies, flexibility and cost advantages of Cloud accounting, it’s time to get out of your comfort zone.

By 2020, over 50% of the world’s workforce will be Millennials - tech natives who will expect things to be magically simple, intuitive and fast. Different systems will talk to each other, digitally that is. An entry-level job in your accounts department will no longer include keying in paper receipts; those staff will be able to take on more challenging tasks and advance more quickly through your organisation. For this, they will thank Artificial Intelligence (AI) and advanced scanning technologies such as Optical Character Recognition (OCR) for the efficiencies they will bring.

How will changing my accounting system improve the way we work?

“If you aren’t already converts to the efficiencies, flexibility and cost advantages of Cloud accounting, it’s time to get out of your comfort zone.”

For senior managers, reporting packs will contain relevant, up-to-the-minute, absolutely accurate management information which will be available to you at any time, dashboard-style, via a web browser. Excel will still have a place but it won’t be used for customising fiddly and error-prone reports.

Today, it is probably better to describe an accounting system as an extended transaction database rather than a finance or general ledger. With new cloud technology, the language of pure databases is starting to take hold. This is increasingly important as the world of integrating technologies and platforms gathers pace.

Integration Hosted in the Cloud, your accounting application will easily integrate with other business applications at this core level.

Information from applications such as sales software or industry-specific applications (a hotel’s reservation system or an online retailer’s shopping cart for instance), will create a coherent and efficient system which reaches far across the business to capture and join up data. You will produce more meaningful reports and gain smarter insights. Integration really means automation, and automation only ever means efficiency.

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“We process between 2,000 and 3,000 client invoices per month using AutoEntry integrated with AccountsIQ, freeing up the time of two of our members of staff. Because the system is so simple to use, we are able to bring in entry level staff to operate this process. It is a safe and affordable means for us to offer apprenticeships. It gives those junior members of the team a comprehensive understanding of how accounting processes work and allows them to progress really quickly.”IAN BREMNER DIRECTOR OF HOTEL ACCOUNTING FRENCH DUNCAN

To read Ian’s story, click here

If you have been running your business successfully on old technology, why should you change? After all, it works, doesn’t it?

Is your operation experiencing any of these symptoms? If so, you will see instant benefits from moving to a Cloud-accounting model.

• Tiresome manual approval processes and data entry

• A coding structure that doesn’t fit the needs of the business

• Frequent errors, re-working, slow or crashing systems

• Use of VPNs to log in

• Manual and repetitive routines for reporting – ‘playing’ with Spreadsheets

• No time to really talk about the numbers or plan

• One dimensional view of the P&L and Balance Sheet

• Lack of collaboration with other functions’ staff

• General madness at month end

So Let’s Take a Health Check

If you know that your finance function could be supporting the organisation better, then you will be open to making a positive change. With change in mind, there is a phrase which keeps recurring and I think it is particularly relevant - “Always on Transformation”. The idea is that instead of bringing systems and people to a point of failure, things are constantly changing to meet the requirements of the internal and external environment. Digital technologies allow us to do this so easily.

For change enthusiasts, Cloud accounting brings all sorts of benefits. In practice, implementation is relatively fast (compared to on-premise applications) so deployment within the accounts department happens very quickly. If your Cloud accounting application comes with an Open API you can start planning further automations across the organisation straight away and push your digital transformation project out across the business, with the core financials safely in place.

A Gradual Change or a Leap of Faith?

1. Get stakeholder buy-in. A vital initial step to ensure alignment of expectations and to secure the platform for a successful outcome. This means you set specific objectives that can be realised, agree a budget and set a timeline. With top level support, you can then pick your internal team with confidence, identifying the necessary skills to resource the project.

2. Break the project down. Ensure the core financials are implemented first. You can add integrations at the initial stage, but only if the design is well thought out and operational risk is managed. That might mean leaving any integrations or complex process changes for a number of months after the core financials are bedded down and the team experiences some early success. Most good accounting systems have on-boarding processes and tools that take care of a lot of the hard data migration work.

Beginning Your Critical Path to Digital Transformation

3. Define exactly what you want to see in your reports before you look at software. Going through the process of defining your reporting pack will ensure you stay on track, not only when evaluating systems but when you come to the implementation stage. Lots of products have quite flashy dashboards and reporting tools but it is crucial to make sure the system’s architecture can be configured in a way which will allow you to get the information out of it in a meaningful way.

4. Learn from others. In my experience, the most successful implementations are led by Finance Directors who know exactly what they want and are confident the system can do it. Look for evidence of previous successes in businesses which are similar to yours. Case studies and reference sites will be invaluable. Knowing what you want upfront will allow your vendor to introduce you to other FDs who have embarked on similar projects. Remember, if it has been done before and it worked, it is likely to work for you.

There are major benefits to be had from making a change in your accounting platform, not least quality and speed of business intelligence for smarter decision making. Hopefully we have helped you feel better-prepared to challenge the status quo and lead your organisation through a successful process of change.

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“Our decision to move away from Sage Line 50 was driven by inefficiencies which Sage couldn’t address; it took two people in my team one week each to update various schedules in Excel and then I would spend many hours compiling a reporting pack. AccountsIQ allows me to produce a custom reporting pack in just minutes.”LEE CAMPFINANCE DIRECTOR SALAMANCA GROUP

To read Lee’s story, click here

In our next guide we will talk about scoping your project and what you need to know about moving your finance system from one platform to another.

In the meantime, you can

Register for our webinar programme on ‘Digital Transformation for Finance Functions’ By visiting https://accountsIQ.com/webinars

or

Get in touch with us via www.accountsIQ.com and we will be happy to talk to you in more detail about your change programme.

Coming Soon in Part 2

Digital Transformation for Medium-Sized Enterprises: A Finance Director’s Guide 13

About AccountsIQ

AccountsIQ is a SaaS Cloud-based accountancy and consolidation system for fast-growing, mid-sized businesses. It offers advanced consolidation features, multi-currency accounting and enhanced business analytics. AccountsIQ is currently used by 20,000 users in 40+ countries.

For more information, speak to a product expert on 0203 598 7350 or email sales@accountsIQ.com www.accountsIQ.com

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Digital Transformation for Medium-Sized Enterprises: A Finance Director’s Guide 14