At its core, business is all about supply and demand, but as financial practices and professional services look to bring value to market, today they are finding that industry has changed dramatically.
That’s according to Ashley Ellington, Director at Times 3 Technologies, a local IT company that helps people and businesses using cloud software through its partner, Sage. “Automation and understanding the role that technology, data, software and the cloud can play in today’s business processes is central to scale and innovation — the very features of a business, that together with human capital, create a distinctive and strategic advantage,” Ellington said.
He cited research from Sage that found businesses can shorten close process times by 36%, simply by switching from spreadsheets to integrated cloud financial management.
“The Close the Books survey is a fascinating study of 1,600 finance and accounting professionals which reveals that closing the books is a key pain point for many organisations. 60% of entrepreneurs who responded say that this financial process takes over a week to close monthly. They also say that the processes they use are often delayed because information vital to business direction isn’t accessible.”
The survey also shows appetite for cloud financial systems has increased because businesses using cloud software have adapted more easily to a digital close with sales professionals who are more comfortable working remotely than those using on-premises software.
“Having the right technology in place enables finance and accounting teams to speed the close and gain faster insights as they evolve from being historians to visionary business leaders,” said Ellington.
The survey found the top obstacles impacting the close process were data manipulation in spreadsheets and data imports/exports. These manual tasks have a significant impact on the time to close – slowing the process and leading to businesses making decisions based on stale information. In fact, those businesses most impacted by spreadsheet manipulation have a close process that is 36% longer than those only slightly impacted.
Similarly, the time spent on each manual data import or export adds up and contributes to a slower close. Respondents who were most impacted by manual data imports and exports on average had a close process that is 25% longer than those who were only slightly impacted.
Cloud financial management systems provide users with opportunities to eliminate or reduce these manual tasks. They are designed to enable companies to complete key tasks like consolidations, accruals, and allocations directly in the system – as opposed to maintaining a separate spreadsheet for these tasks. Cloud-based systems also offer application programming interfaces (APIs) that make it easier to connect with other business systems to automate more of their data imports/exports.
“Today’s finance leaders are being called on to not only report the numbers, but to provide strategic guidance for their businesses,” said Ellington. “Long, onerous close processes not only dampen team morale, but impede an organisation’s decision-making when it can’t get current, accurate information at critical times.”
A key trend seen in this year’s research was an increase in companies planning to move financials to the cloud. 58% of respondents currently use a cloud or hybrid accounting system. Of those still using on-premises solutions, 70% were planning to move to the cloud – up 27% relative to last year’s survey. This increase was likely driven by opportunities to shorten the close process and lessons from the global pandemic.
“By eliminating legacy systems, paper-based systems and spreadsheets, businesses can make more effective use of valuable resources, including time. At the same time, Sage Intacct reduces errors introduced through data capture or data transfer,” Ellington said.