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CLOUD NINE: HOW CLOUD ACCOUNTANCY CAN LEVEL UP YOUR BUSINESS

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CLOUD NINE: HOW CLOUD ACCOUNTANCY CAN LEVEL UP YOUR BUSINESS

The pandemic helped to accelerate digital transformation, and that has included companies’ accounting systems. Haines Watts’ cloud accountancy expert Riaz Kala explains how cloud accounting can help businesses to ‘level up’ their processes and get better value from their accountants at the same time.

The days of hand-written ledgers and shoeboxes stuffed full of receipts are long gone for most companies – but you’d be surprised how many still prefer to deal with their accounts in an analogue way. Perhaps because it is closer to the way they were trained, or perhaps it feels more tangible to them.

But the digital age is upon us. Haines Watts has been advocating the switch to digital-first accountancy for many years, and one of the impacts of the pandemic has been to accelerate that digital transformation. Companies from every sector have been clamouring to find ways to reach and sell to new audiences, and technology has been at the forefront of that.

The same goes for accounting. With a reduction in face-to-face contact, it becomes harder to hand over paperwork and files in person, so more businesses have embraced digital solutions to help streamline and speed up the process.

It’s music to our ears: we still cherish our direct client contact but switching to digital platforms means we can do so much more with the time we do have available for clients.

 

Migrating to the cloud

My role at Haines Watts is overseeing our cloud strategy and integrating our use of tech at every level of the business. Even prior to the pandemic, we had worked with most of our businesses to migrate them to platforms such as Xero, which meant we were well placed to deal with the challenges of remote working that the lockdowns presented.

However, we constantly review our use of tech and the way our clients use the cloud, and we are in the process now of migrating our remaining non-cloud clients onto the cloud from Excel or paper-based systems.

Even once we’ve got clients onto the cloud, that reviewing process never stops: part of our change management strategy is monitoring developments and making sure that knowledge is passed on around the business. We have training plans in place to make sure that we are always on top of the latest updates, such as Xero HQ and the new generation of features that brings.

 

Levelling up your accounting

At the heart of everything, though, lies our strategy for improving the flow of information to Haines Watts: when we talk about our use of the cloud, we are typically looking at three key things: Firstly, bank Feeds, ie are they using a platform such as Xero/Sage? Then comes invoice automation, and finally monthly reconciliation: how often we do speak to clients, and how often are they reconciling their information and learning from it.

Based on those stages, we have three ‘levels’ that we apply to businesses to describe their progress along the digital transformation route.

Level 1

Migration onto a cloud platform such as Xero, Sage or Quickbooks.

Level 2

Using AI, machine learning and robotic process automation to automate processes with bank feeds and rules, invoice collection and processing and payment facilitation. As processing time decreases more regular maintenance of bookkeeping software is essential for accurate and real time information.

Level 3

Integrating apps to improve processes and cashflow and management forecasting, and industry-specific apps to help improve business operations.

A company operating at Level 3 will have fantastic integration, smooth processes and will be in a position to benefit from the insights that the available data can provide.

In addition, we are now offering clients digital health-checks and finance function reviews, and doing app research that can include more bespoke apps that could be implemented outside our standard app stack, such as electronic point-of-sale (EPOS) and stock systems.

 

Benefits: beyond time saving

Without complications, a ‘standard’ migration onto a digital platform can take around a day, plus the time taken to tidy up the information, but that can vary greatly from client to client depending on the complexity of their business. Once the set-up is completed, the time taken to doing so is quickly recovered.

The time-saving alone is a compelling reason to embrace cloud accountancy, but the benefits go way beyond getting rid of the physical paper trail and saving time.

That extensive stack of digital apps can offer huge strategic and analytical benefits if they are integrated in the right way.

One of Haines Watts’ core values is that we offer true insight to our clients, working with them to do far more than simply crunch the numbers. Moving to digital buys us the time to nurture that relationship and to offer far more added-value to clients.

We work with our clients as trusted advisors, peers, sounding boards and even friends, and the intel we now have access to on a ‘level 3’ client allows us to offer incredible insights to those clients.

 

Choosing apps? Stay focused!

Xero alone has an ecosystem that supports over 1,000 apps, so it can be pretty overwhelming and difficult to know where to start. We recommend being focused and very selective, so we work loosely with our clients to make sure they are only integrating the apps that really complement their business.

We are creating an app stack – outlined below – that forms the core of our cloud accountancy toolkit and we tend to recommend using these as a starting point. They cover what we feel are the key areas of a finance function with each app having a primary use but also other uses.

We decided to limit ourselves to one app per finance function area, choosing apps that can be used in different areas as to avoid ‘app overwhelm’ with clients. However, when scoping our clients’ app requirements it is important to understand how other apps, with similar purposes, assist with their chosen processes as they may be a better match than those within our app stack.

Again, though, the most important message here is that the apps are being used properly and that the data they give you is being interpreted correctly.

 

Business

TAKE THE NO-CODE LEAP TO DIGITAL INNOVATION WITH A FUSION TEAM

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Chris Obdam, CEO, Betty Blocks

 

In the last couple of years, a new sector has emerged alongside enterprise financial organisations—an ecosystem of fast-growing Fintech startups that develop innovative solutions for the banking sector. These small, flexible startups and scale-ups began filling a gap the ‘big boys’ left quite some time ago. Then, they gained even more ground during the pandemic. According to KPMG, Fintech investments worldwide amounted to $98 billion USD in the first half of 2021, compared to $121.5 billion over the whole of 2020[1].

 

The massive surge has financial regulatory bodies scrambling to balance the benefits of modernising the industry with the necessity of strong oversight. But, what if traditional financial enterprises could combine their durability, reliability and years of experience with the flexibility of a startup? They can! More and more enterprise organisations are becoming agile, empowering digital-savvy colleagues and improving competitive value.

 

Fusion teams

Their approach? They break through patterns and almost literally through walls in their organisation. The most successful organisations team up with genuine problem solvers. It’s a solution-oriented approach, which can be really successful if governed the right way. We like to call it a fusion team, a team that empowers digitally-skilled and solution-oriented employees to work side-by-side with the IT department while using a low-code and no-code development platform.

 

Citizen development

A fusion team brings together people with diverse professional backgrounds who use data and technology to achieve shared business outcomes. Ideally, a fusion team combines pro-developers with citizen developers. A citizen developer is a business person without coding experience that builds apps using a no-code or low-code platform.

The purpose of the professional developer, in a fusion team, is not to train the citizen developer to become a pro-developer but to bring guidance and governance to the project. Before building successful software, a fusion team will require knowledge and guidance through the software development life cycle (SDLC) phases. IT feedback is crucial to helping a fusion team understand what makes good software and how new platforms can (or cannot) integrate into an existing system. Citizen developers should receive coaching to make decisions that lead to architecturally sound, value-adding applications.

 

What are the challenges that a fusion team can tackle?

  • Modernisation of legacy systems. Many banks have been around for years, expanded their software, but regularly have to deal with legacy systems or even a vendor lock-in.
  • Regulations can change fast; that’s why financial organisations need to increase flexibility and improve adaptability. A flexible layer on top of core systems or legacy systems can profit the whole organisation.
  • Counter shadow IT. Thousands of employees means that a lot of solutions are single handedly-built. All these solutions can be beneficial for the employees and even for your customers, but the thing is that they are not checked and governed by IT. For example, you run the risk that they are not meeting all your security requirements.
  • Digitisation of processes, like the onboarding process for customers, is still a long paper process within financials. What if this could be 100% digital and automated? This could save you a lot of repetitive work, energy and money.

 

Create an environment for innovation

Banks tend to have difficulties setting up the right conditions to empower the workforce to innovate towards the future. Our first reaction to possible security risks is to impose more rules and restrictions, while the solution lies in a coaching attitude, independent of strict regulations. You can empower digital transformation by using a no-code or low-code platform.

A fusion approach encourages better software governance, allowing IT to help mitigate the risks of shadow IT projects. With a no-code or low-code platform, you can combine existing secure systems, extract data more efficiently, effectively communicate and convey between systems and thus better manage qualitative information. Governance is not a simple process or a task to check off and forget about; the essential governance feature for low-code or no-code development is a platform provider with the flexibility to adapt to specific needs of an enterprise. The provider should be a partner in expanding the role of citizen developers within the organisation.

Taking the leap into no-code software development with a fusion team will empower the entire organisation in digital transformation. It’s a strategic move that helps enterprises become more resilient against unexpected challenges – such as a pandemic or new consumer demands. Furthermore, you create a modern and innovative working environment with digitally-capable and engaged employees.

 

[1] Source: KPMG:

https://home.kpmg/nl/en/home/media/press-releases/2021/09/record-fintech-investeringen-in-eerste-helft-2021.html

 

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IDENTITY SECURITY IN THE ERA OF SOX

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By Steve Bradford, Senior Vice President, EMEA, SailPoint

 

The Sarbanes-Oxley Act (SOX) is a federal law that mandates practices in auditing and financial regulations for public companies. Its original intent being to restore trust in a corporate and financial system that had been rocked by major accounting scandals such as Enron, WorldCon and Tyco. Legislators believed if there was no trust in the major corporate institutions of America, then the whole fabric of capitalism could be brought into question.

Initially only applying to American companies, every major institution that dealt with America had to comply with SOX. It was a huge a success with the number of financial scandals emanating from the US dropping dramatically since compliance. But can The UK follow suit?

 

Preparing for “SOX UK”

The UK has had its own high profile business collapses – notably BHS and Carillion. So, the government has launched a consultation programme that mimics the US SOX rules. The consultation on reforms aims to ‘restore trust in audit and corporate governance’ and applies to auditors, companies, directors, audit committees, investors, other stakeholders, and the regulator.

A focus is on companies with a significant public interest, otherwise known as Public Interest Entities (PIEs). These include financial institutions, banks, insurance companies, underwriters, and alike – many of which are already familiar with a high degree of financial scrutiny. A noteworthy difference is the stated preference to expand the UK SOX controls beyond public interest companies, which could include large companies in retail, manufacturing, logistics and automotive.

UK SOX may seem like a massive undertaking if unfamiliar, but with the right technologies in place manual tasks can become automated, reducing time which can be then redirected to greater priorities or risks, and everyday operations will be guided by a strong set of well-defined controls.

 

A growing threat

The Sarbanes-Oxley Compliance 9-Step checklist provides a series of recommendations to protect the validity of all reported information and help businesses to ensure they are following the rules. This includes the need to establish controls to prevent data tampering, track data access, test the effectiveness of safeguards and detect security breaches – any of which need to be reported to SOX auditors on time.

As both physical and digital information are affected, accurate management is an integral part of compliance. Remote working, blockchain integration, and the emergence of cloud-based banking (Banking as a Service) have led to growing cyber threats, privacy concerns and compliance requirements through the complexities of connectivity.  For example,  multiple devices now connect to networks from different locations, accessing the vast amount of information in the cloud. There is now critical need to close security gaps outside the perimeter.

Some of the greatest threats lie within an organisation – either human error or more likely, the rise in risk facing the access today’s workforce has to technology. Complex corporate structures and departmental silos hinder management’s visibility into workforce roles, responsibilities, and data access. Traditional reliance on spreadsheets and manual processes for tracking data access and user identities leads to inaccuracies and inconsistencies.

Apart from being an auditing and reporting nightmare, the situation creates system gaps that are ripe for exploitation by threat actors.

 

Maintaining security through identity

To meet security and compliance regulations, companies and organisations must act smarter in how they protect their “perimeter”, which is centred on its people – the new threat vector of choice. Companies must prepare to automate business processes and embrace new security practices that fully protect the workforce and the tools they need to  do their job.

Staying in compliance with regulation is important for the safety of the company, but it is crucial that the right safety measures are in place. Identity access management can reduce the risk of insider threat, data breaches and human error for financial reporting – enabling automated logging and report generation for companies to make smart decisions whilst uncovering and remediating hidden or unknown issues that pose inherent risk.

 

The countdown to SOX

One commodity companies don’t have is an abundance of time. With less than 18 months to go until the SOX recommendations deadline, any form of automated access system is an essential first step in ensuring companies are prepared. Starting early is critical – given an implementation programme can take 18-24 months for a company that is used to stringent financial regulations. It’s time to get identity and access compliance right – automation can save a significant amount of effort and money, whilst improving the accuracy of identity management processes.

As seen in the US, UK companies not used to financial compliance procedures will have to catch up or ask for help – learning from the financial sector – and scale up their auditing and control to comply with more stringent regulations. The rules are there to help provide the security that regulators need for a secure commercial environment. Now is the time to act in order to reduce the risk.

 

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