The ‘new normal’ has presented uncertainty for the finance function – it’s been a department hit hard by the unpredictability of the pandemic and forced financial directors (FDs), and their teams, to work differently forever.
Our commercial director, Paul Sparkes, delves into five key reasons as to why cloud accounting software should be top of every FD’s wish-list in 2022…
While the pressure for greater efficiency is a constant throughout the industry, the Covid-19 crisis forced many organisations to respond by adopting cloud-native solutions in order to work smarter, navigate lockdown rules, as well as help them survive further economic flux should another global crisis occur.
Ironically, vast improvements in efficiency have been achieved as a result, even though the impetus for change was driven more out of necessity and reaction, rather than a pragmatic plan to upgrade systems for the better.
Today, however, FDs are starting to realise that a comprehensive finance function is no longer centred around a physical process which is used by staff who are based in an office, on a full-time basis. Instead, they must have a system with an entirely digital process, and secure access available from any location.
However, there are still tens of thousands of businesses that are ‘making do’ with the technology they have, applying ‘sticking plasters’ to their on-premise systems in the hope this helps them achieve the same results.
So, is now the time for finance departments to completely move away from their legacy, server-based systems for good and, instead, adopt cloud-native accounting software solutions to improve efficiency? Here are five reasons why that might be their best investment in 2022…
- Becoming a hybrid working department
Hybrid working is something of a buzzword today, yet still a relatively new concept for finance departments who have, for years, relied on filing cabinets to store purchase orders, invoices, contracts and more, or respond to post-it notes reminding them to approve certain documents.
For decades, they’ve been used to travelling to the office too. That was until the Covid-19 pandemic forced many organisations to close their offices temporarily and have employees work remotely.
Over the past two years, workforces have had to adapt to their own ‘new normal’, which, for some departments would’ve been far simpler than others. For example, sales and marketing teams used to being on the road visiting clients have likely found it much easier to work remotely compared to their traditionally office-based finance counterparts – especially when many of their existing systems already supported a hybrid way of working.
The global crisis has presented the chance for FDs to review their on-premise technology and consider how they can utilise modern-day software in a way that means they don’t have to be physically in the office, but where they can still have full visibility of their entire organisation’s financial situation – in real-time, and at the touch of a button.
While software innovations – such as Adobe Sign and DocuSign – now offer greater flexibility for the FD’s approvals processes, if they’re not prepared to say goodbye to their filing cabinets and post-it notes, they’ll fall behind. A digital approvals workflow is only effective if the systems supporting it can serve up the requisite digital documentation in order to be able to make effective decisions.
Organisations that don’t adopt a digital process will find that their competitors will be operating from a significantly reduced cost base – by having everything in one platform – and enjoying a highly flexible, paperless, and commute-free hybrid way of working.
- Improving efficiency and reducing server costs
Throughout the pandemic, FDs have had to carry out their day-to-day responsibilities via remote access through a VPN or spend a day in the office to gather paperwork when no-one else is there. It’s made many leaders rethink how they can effectively manage their duties when they’re part of a disparate workforce and still be efficient. The impact of Covid-19 has been a ‘baptism by fire’ for many to say the least.
And yet, for too long now, many FDs have been coping with what they have – applying Excel-based, short-term fixes and manual workarounds to maintain their legacy systems. Although cost management is always a driver for FDs, many professionals are being forced to spend thousands of pounds to keep outdated, on-premise tech running their email, payroll, CRM, finance, file storage requirements and more. It’s often a direct result of the fear of change, and the perceived upheaval and disruption that would occur during the transition process.
It’s becoming increasingly apparent that CFOs and FDs seeking to be more efficient and use budgeted expenditure more effectively, must decrease their dependency on server-based software. The realisation is becoming far more widespread that, although server-based finance systems aren’t exactly dead, they’re a ‘dead end’.
Many millions of organisations, globally, have adopted cloud technology solutions which offer greater functionality, uptime capability and better security. At the entry level, the rise of Xero and QuickBooks shows no signs of slowing down, with larger enterprises investing in the likes of Dynamics and NetSuite to help manage their day-to-day.
Though for tens of thousands of mid-market organisations, that costly, outdated on-premise tech that’s sat in the corner of the office is becoming something of an anomaly. Finally, there is a cloud-native proposition that makes sense for the finance departments whose requirements are beyond entry level systems and who don’t have budgets for tools that have been designed for enterprises with 500 staff or more.
- Interrogating data to deliver actionable insights
For decades, FDs have had to live with what they’ve got when it comes to insight. They’ve ‘made do’ with limited reporting and a lack of timely information. Such a reliance on intuition and unmanageable spreadsheets means they have only ever had a ‘gut feel’ for what they should be doing – and it’s ultimately based on ‘half-baked’ information.
However, the emergence of comprehensive cloud-native technology has equipped FDs with fully integrated tools and unlimited reporting capabilities using real-time, data-driven information. They no longer have to double-check their data’s accuracy because they’re presented with one version of the truth. And, in turn, they’re armed with actionable insights that can be used across any division, in any format – providing true flexibility and accessibility.
Additionally, FDs aren’t the only employees who can interpret the insight. Intuitive true cloud accounting tools can provide insight that’s available for all department heads to contextualise in their own way via simple-to-use dashboards.
As well as empowering all corners of an organisation to have a global view of the entire business, FDs who invest in the right cloud-native solutions are one step ahead of their server-based competitors through unrivalled access to automated, accurate data that reduces spreadsheet dependency, decreases human error and manual workarounds, and increases efficiency.
- Integrating with other systems seamlessly
Cloud-native technology is built with the ability to integrate with other systems to provide information seamlessly across the board. Whether between the company’s CRM, CMS, payroll, finance, projects, donor management, fundraising and more, FDs need these systems to talk to one another.
While integration between on-premise systems was commonplace for many years, trying to connect on-premise technology with other cloud-native applications is practically impossible by virtue of the architectural challenges and the security threats posed.
Throughout 2022, there will be increasing pressure on IT teams to decommission old technology. FDs will see even more software providers announcing the discontinuation of existing desktop versions of their products as they continue to recognise the value of moving everything to the cloud. This will likely leave vast numbers of organisations ‘orphaned’ from a tech standpoint, with no affordable migration path offered via their existing vendor.
For the FDs that continue to depend on legacy infrastructure, and who are ultimately unable to integrate their systems seamlessly, they’ll fast become laggards in the industry as competitors stride ahead.
- Automating processes to reduce human error and save time
While automation is nothing new, it’s really starting to impact the finance sector. More FDs are trusting how such solutions can liberate their day-to-day roles and are utilising smart technology – such as non-invasive tech like Robotic Process Automation – to better prioritise projects, alleviate overwhelming workloads and automate labour-intensive tasks.
For many leaders, that means the likes of repetitive and time-consuming tasks such as bank reconciliation, payroll and auditing, are no longer the responsibility of a person but a ‘bot’. In turn, this reduces human error, liberates workloads and gives back weeks in every month to prioritise customer relationships and other critical organisational matters.
As deadlines become tighter and pressures increase in today’s fast-paced world, FDs must be open to embracing innovative solutions that help them retrieve and interrogate accurate information in real-time, provide ultimate efficiency and remove manual processes for good.
For the FD still reliant on on-premise or ‘fake cloud’ systems, there’s never been a better time to make the shift to cloud-native technology. When they do, they’ll be able to serve their organisations in a way that their competitors are already doing – all without concern for security and speed or needing to be in the office 24/7.
Our dedicated team can explain all the benefits and walk you through the functionality. Book a demo today by calling 020 7729 3260, emailing: firstname.lastname@example.org or complete our contact form for a call back.