In a world where the chief financial officer is expected to play an increasingly strategic role, the corporate finance function is more and more beset by the challenges – and opportunities – posed by the speed of advances in technology.
While finance chiefs are keen to contribute to the performance and growth of their organisation, they can be too mired in the complex demands of their operational, regulatory and tactical roles to create the impact on value expected of them.
Chief financial officers are at the forefront of strategic decision-making when assessing how their technology infrastructure, which is so crucial for business growth, is implemented. All too often, tactical decisions that met a specific pain point have led to implementing multiple applications which not only fail to talk to each other, but make the financial management process unnecessarily complex.
It’s time to overhaul the working relationship between finance and the rest of the business
Increasingly, the finance function is understood to operate most effectively when a “single source of truth” of relevant data is gathered, consolidated and shared across teams. This is a vital requirement for optimising organisational alignment, efficient planning and reporting, and driving the business forward based on data that all stakeholders can agree on. Instead too often departments are using different software solutions resulting in multiple sources of data, creating confusion and ultimately slowing productivity.
A key example is the purchasing process, usually still paper-based, slow to progress and with relevant financial information siloed between budget holder’s spreadsheets, and held within inaccessible accounting software, or filing cabinets, by the finance department. For most finance departments, it’s enough that purchasing orders are placed, however undisciplined that process may be, invoices paid, monthly management reports produced and the auditors kept satisfied.
In fact, for budget holders, the whole process is usually not fit for purpose with finance failing to provide information that tracks supplier relationships, manages budgets or helps to create and manage project-related budgets and spend. The only information they are likely to receive is a management report which is between five to fifteen days out of date by the time it’s delivered. Furthermore, as most budget holders are maintaining their own processes, with data held on spreadsheets, it is robbing the finance department of valuable real-time financial information.
An effective budget holder management accounting system provides “the truth” to all stakeholders by capturing a single, real-time view of the entire purchasing process. Budget holders are able to access all the information on their suppliers’ spend, the status of all current and past transactions, and capture budget information and future planned project spend to manage expenditure against project budgets.
The finance team gains a disciplined purchasing process that speeds up every facet of the process and allows access to future planned project expenditure. A 100 per cent browser-based application designed specifically to integrate with existing software can deliver startling benefits and value at a surprisingly affordable cost. This delivers:
Fast electronic approvals – a formal, disciplined and auditable approvals process, actioned from any connected device, with all the supporting information to hand, features automated reminders and personal “nudges” to make approvals swift and easy.
Comprehensive query management – with every invoice query captured and tracked in real time, finance and approvers can work together to keep suppliers on side.
Single unified overview of suppliers – budget holders and approvers have access to all the information on their suppliers, including turnover, every invoice awaiting approval or under query, plus approved invoices and payment statuses.
Fully automated order reconciliation – automatic two and three-way matches with the order and/or receipt, with successful matches are passed directly into the workflow; three-way matches are posted to accounting packages with zero touches.
Real-time budget management – budget holders have instant access to their available corporate and project-related budgets, helping them to manage their departmental spend proactively moment by moment, removing all the phone calls and e-mails every month.
Accounting and enterprise resource planning (ERP) integration – tight real-time integration extends the functionality of every accounting and ERP solution; users only ever see the suppliers’ and general ledger information that is relevant to them, and on final approval every invoice is automatically posted with a full audit trial.
PAPER INVOICES, YOUR TIME IS UP
With no legal requirement for paper invoices, their time is up. Most businesses have changed the way they deliver their sales invoices to be paid as soon as possible, generating sales invoices as PDFs that are e-mailed directly to the customers, incurring no expenditure or delays. The data from PDF invoices can be harvested with total accuracy, creating an invoice transaction that is immediately available for approval.
Unsurprisingly, the use of e-mail PDF invoices has grown from around 20 per cent two years ago to more than 65 per cent and is on track to reach 90 per cent of all invoices generated over the next 18 months.
AUTOMATED PURCHASE ORDERING
Simply automating purchasing ordering may benefit the finance department, but it fails to meet the needs of budget holders. An effective budget holder management system must replace their spreadsheets or it is simply duplicating their work. Budget holders already maintain their own spend analyses that reflect their departmental activities, so any effective purchasing automation process must replicate this capability, while also delivering the same information in the standard profit and loss format.
As important, the new purchasing process must enable the simple capture of planned projects and likely costs and cash-flow implications, benefiting both the budget holders and the finance department with a single view of “the truth”.
THE SOLUTION
It’s time to overhaul the working relationship between finance and the rest of the business with a 100 per cent browser-based application that extends the functionality of all existing ERP and accounting software using API connectors designed specifically for the purpose with seamless integration.
This delivers real efficiency, information and time-savings to budget holders that drive adoption, while the finance team gains disciplined purchasing and approval processes with a real-time view of commitments, accruals and budget availability.
Let your business make significant productivity gains, while providing your budget holders with the information that allows them to make the best use of their budget spend.
For more information please visit www.compleatsoftware.com
