Today's finance teams are responsible for huge amounts of data and procedures. They are being forced to move at break-neck speeds, but usually lack the resources to provide their true value and insight into the business. The seven reasons below are all key factors, but there are a few ways to overcome them.
1. They are still using Excel
Spreadsheets are to cloud-accounting what bikes are to Lamborghini's. There are vague similarities (they’ll both take you somewhere), but good luck racing the Lamborghini on your pedal bike!Problem: Exporting reports from Excel is riddled with issues. You’ll have to spend a lot of time cleansing and then manipulating the data manually to create actionable insights. There’s a lot of effort, and it’s not the most effective use of your time. You often can’t tie it back to the original data so end up with discrepancies.Answer: With cloud-accounting, you apply fields to transactions and journals, allowing you to segment the data in the program and then report on it. Easily customisable reports, multi-dimensional reporting, powerful reports and dashboards which provide you with clear business insights
2. They don’t have operating metrics
It’s 2020. No reporting across your system? You may as well revert to storing important information in filing cabinets, documents retrievable following half an hour of half-hearted searching from the apprentice.Problem: Manually entered data between systems is time-consuming and the risk of human error is unavoidable.Answer: By merging Sales and Finance systems on one platform, or merge financial and operating metric by integrating data from 3rd party systems to ensure one source of truth.
3. They are unable to implement robust governance procedures
If your current system is as lawless as the wild west, you risk inaccurate data, fraudulent transactions and missing information.Problem: The current system does not have approvals for transactions and journals, they’re not able to customise processing rules and validation meaning paper-based system are used and data integrity is at risk.Answer: Have a system that is capable of approval processes, ranging from Purchase Orders to Supplier bank details. Configure validation so that tasks like posting to certain ledger accounts requires mandatory data.
4. Closing the books takes too long
Didn’t your granny tell you to tidy up as you go along? It’s no wonder that closing monthly books can take up to 60 days, let a big mess build up and it’ll become a bigger problem to tackle. Automation serves as a ‘little and often’ way of keeping on top of things.Problem: Due to lack of governance, manual re-keying of information and disparate systems closing the monthly books can take weeks, by which time the problems found have already happened. Creating meaningful reports then drags out the time due to the lack of segmenting and reporting options.Answer: Introduce processing rules, automated data entry to reduce time and errors and segmented data to allow the books to be closed in days
5. They don’t know where they are losing money
You should be making a hefty profit each month due to the margin on your products and services, but the P&L is telling you differently. Unfortunately, you’re not sure where the money drain is. You’ve ran the limited reports you’re able to get from the system, spent hours in Excel and gone through all the paper approvals and documents, but you’re still at a loss.Problem: As the reporting and lack of controls in their system is not good enough, they’re unable to spot where they are losing money.Answer: Introduce governance and more thorough analysis options to allow them to find where they are losing money – this could potentially be an instant ROI.
6. They have too many manual journals during the closing period
Month and Year End can be a laborious and risky time, especially with people manually entering journals under the pressure of trying to get the books closed. Risk + Pressure = MistakesProblem: They haven’t, or can’t automate the posting of the long list of journals, including; depreciation, accruals, prepayments, revenue recognition, opening and close stock, revaluations and bad debtAnswer: Configure the new system to reduce the requirement of human interaction to process the manual tasks currently carried out. These can be set up on the originating transactions and journals and then be automated in the background.
7. They don’t have a good knowledge of technology solutions
If you’ve worked with solutions that do half the job for years, you may be desensitised. The good news is, there are much easier ways to do things, you just need someone to help you put them in place.Problem: They know they have issues with their systems, but they’re not aware of which new solutions are available, how they work or how powerful they can be.Answer: ION can listen to their issues and pains, suggest options, provide case studies and demos to showcase how powerful systems can push their business forward.