A successful business must be able to move and adapt at speed, and in today’s highly digital business environment, this means making up-to-date, shareable, analysable data instantly accessible through systems and tools that all talk to each other.
But the fact of the matter is that often, with so much else going on day-to-day, business owners and managers can struggle to put the financial technology and processes in place that enable the organisation to keep on top of the mounting digital tide.
The outcome is that functions and departments all too often work, financially speaking, in relative isolation from each other, opportunities are overlooked, and – more seriously – critical financial and accounting deadlines can be missed.
Here are just a few examples of how effective data and systems can give your business greater control over both its financial health and its finance procedures.
Trustworthy insight, more efficient outputs
Let’s start with the financial health piece, as it is this that determines the continuing viability of your business.
The challenge here is that there are many different financial tasks involved in your business’s daily operations, often powered by different apps and software solutions, and although you may understand the overlap between them, each of these sources is updated at different speeds.
So, at any one point, it is highly probable you are making decisions based on a source’s information that is incomplete, incorrect or out of date.
But by putting in place systems and data that are integrated – or, as we describe it above, that “talk to each other” – it is possible to keep data constantly up to date and reuse the same authoritative data for multiple financial insights and processes.
An expenses submission system, for example, can flow financial data on claims and receipts automatically through to the business’s book-keeping and accounting system for approval, from where it then automatically flows into the business’s Customer Relationship Management (CRM) and invoicing systems, against the appropriate customer.
One smooth, quick manoeuvre, reusing one accurate source of data, with no manual intervention necessary once the expense claim has been uploaded – so it’s a win on the productivity front.
But the other outcome, of course, is that no matter which application or system within the chain you consult, and for what specific finance process purpose, the data is consistent, accurate, and a trustworthy basis on which to make decisions. Every time data is generated or updated, it is up-to-date everywhere. This is critical, because data within one department is often relevant to another, and by sharing it and analysing it systematically, it enables the business to ask and answer
key financial questions across the wider business, such as:
- Is the business profitable?
- Which areas of the business bring the most profit?
- Is investment in a planned area a good idea?
- Where are budgets being exceeded?
- Which customers are costing us the most?
- Where are our expenses high?
- How do I know I have captured all out of pocket costs to bill to customers?
From this, the business can then make truly informed decisions that maximise profits and reduce costs.
As industry analysts Ernst & Young put it, “New data capabilities can transform finance functions to deliver greater insight and support smarter decision-making…”
Keeping finance (and others) on track
Of course, the ability not only to reuse data but accelerate and automate that reuse ultimately means not only that data is more reliable, but that far less manual effort is involved in managing it – and that, in turn, means less margin for error.
For time-critical finance processes like accounts preparation and filing, annual reporting, payroll, financial intelligence, and so forth, which, if delivered late or inaccurately, can have serious knock-on effects on the business, integrated systems and data are a risk-reduction no-brainer. This is also true when you consider that these processes, if delivered early, can have a positive impact, demonstrating to funders that you are on top of your numbers, boosting your credit score, and raising your chance of success of obtaining new credit from suppliers.
But at the same time, the combination of the right finance systems and data can exert a powerful reduction on costs, greatly simplifying the compilation of finance data and the accompanying labour costs.
As industry giant PWC puts it, effective systems and data enable the business to “devote time to analysis rather than data reconciliation and manipulation.”
Systems and data: what’s your next move?
However, that’s not to say that getting the right data and systems in place is easy. Neither is it always straightforward to interpret the data they provide correctly. Indeed, PWC’s definition of the challenges talks about “realigning processes with the people who perform them, retraining people to fully leverage current technology and fully optimize existing systems, and integrating systems to deliver accurate, reliable, auditable information”.
If that sounds like a big ask, this is where EFM comes in. With our Business Advisors and part-time Finance Directors, we’ll support you in getting the right systems and processes in place, optimising them, and interpreting the data so you can make sound financial decisions based on the most useful and helpful information available.
To find out more about how we can help, book your one-to-one consultation here.