Finance

How new financial directors can champion change in the first 100 days

Published

5 months ago

January 14, 2023

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New year, new job? When joining a new organisation, the first 100 days are often key to implementing change and creating value for your organisation. Richard Hughes, Chief Financial Officer at Proactis, outlines the four key considerations for any transformation.

Entering a new workforce allows financial directors (FDs) a unique opportunity to review their company’s position with fresh eyes. Making a meaningful impact in a new role is often at the top of the list for newly appointed FDs, but it is never long before urgent work and, very often, firefighting takes over, meaning the due diligence required to conduct a holistic review of processes and procedures can often be pushed to the side.

Harvard Business Review found that utilising internal networks is key to making an impact[1], allowing newcomers to fully engage in their role, and boost productivity and innovation. The initial period of settling into a new role offers a unique opportunity to effect organisational change. So, during this time, a new FD must take it upon themselves to quickly get to know the environment and dynamics of their new workplace, as they aim to make a positive impact.

As a senior leader, it is important to understand the exact position of your company and, in order to be effective in this determining period of the first 100 days, financial decision makers must identify the most valuable information through a series of strategic reviews.

The four-point checklist

Following four key steps will help to ensure business-critical decisions are impactful and evidence based – closing gaps and creating opportunities to reduce costs, save time and improve Purchase-to-Pay (P2P) cycles.

Spending – It is essential that FDs have a clear overview of all spend – direct and indirect – within the organisation. In identifying which departments are spending over the odds, or attracting penalty fees by delaying payments, problem areas can be identified and rectified.

Automation is one of the most powerful tools for streamlining spend management – and any business practice for that matter. Modular solutions, which can integrate with the enterprise resource planning (ERP) or finance systems, can be implemented swiftly – a key consideration that could offer ‘quick wins’ in any FD’s first few months. These automated P2P procedures can help businesses to drive maximum value by saving time, money and creating visibility, providing an unprecedented level of control over their spending.

Suppliers – Conducting a holistic review of the suppliers linked with your organisation, particularly with a fresh perspective, can help to uncover inconsistencies in procedures, such as contract management and invoicing systems.

Transparency is central to driving cost savings, and relying on outdated methods for supplier handling can lead to duplicate agreements and auto-renewals of contracts that could have otherwise been reassessed. So, when it comes to supplier management, easily accessible contracts managed through electronic contract management systems can better inform procurement decision-making when compared with manual, de-centralised processes.

Risks – It’s vital that new FDs look to identify weak links in their organisational structure. Where there is lack of visibility, there is risk of additional costs being incurred or, as previously suggested, inefficient contracts being automatically rolled over. Having a clear view of how agreements are managed is key.

Risk management cannot be seen simply as a one-off – or even annual – exercise. In order to be effective and allow organisations to reap the maximum benefit from contracts, it must be built into ongoing business interactions. In today’s complex world, risk management is just as critical to your organisation’s financial health and competitive performance as an individual’s focus on value creation.

Processes – ‘Walking through’ a random invoice’s journey through your payment process is a simple yet incredibly informative task to help uncover such risks. However, it is also important to take on verbal and written feedback from employees who have been working with such systems for years. What do they feel is working, and what are their hurdles?

Being able to automatically collect, manage and track all financial information throughout the P2P system in one central repository means the need for manual searching or managing multiple software applications is eliminated, helping to improve accuracy as well as efficiency. It can identify errors and discrepancies, which can be rectified without delay to ensure the organisation is driving maximum value across budgets.

Across all four of these strategic areas, FDs should look to get a clear sense of where things are now, and where they want things to be. In order to get there, what must be changed? And how can their organisation make this change happen? All of these elements combined will provide a robust grounding from which transformation can be built.

Implementing informed change

Ultimately, a newcomer’s role at any organisation is to bring experience and fresh perspective to operations. The most important thing a senior leader can do is to establish a culture of change by promoting an environment that embodies this change, and propels it forward. Change must be credible, clear and compelling – and the way this is communicated throughout every layer of the business is key to how well it is embraced, thus how effective it can be in the long run.

This change does not need to be a large-scale, sweeping overhaul of operations to be meaningful. It can be as simple as modernising existing processes, and introducing automation to support current ways of working. Once organisational inefficiencies are identified, solutions that can be quickly and efficiently implemented with minimal disruption can then be considered.

If seeking to make a substantial impact within the first 100 days of a new role, FDs should turn to automation to support their goals. Employing digital tools to enhance existing procedures illustrates leadership skills and can be enforced rapidly, in return delivering a swift realisation of cost savings, in addition to winning over employee trust.

[1] https://hbr.org/2021/11/how-to-succeed-quickly-in-a-new-role

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Finance

Taxing times for online marketplaces? Operators must act now to avoid losing sellers

Published

3 hours ago

June 9, 2023

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By Niall Kiernan, Senior Director of Product Marketing, Vertex

In today’s digital landscape, online marketplaces are an enabler for many businesses to achieve their growth ambitions. From Amazon to eBay, Etsy to Vinted, businesses of all sizes are now utilising online marketplaces, and recent years has seen exponential growth in this area. Numerous factors, including the proliferation of mobile devices and widespread availability of high-speed internet, have resulted in this escalation. Combined with consumer demand for convenience, along with the impact of the pandemic, the success of online marketplaces can be seen in the numbers. In 2021, retail eCommerce sales amounted to approximately US$ 5.2 trillion worldwide. This figure is forecast to reach US$8.1 trillion dollars by 2026.

It is clear that online marketplaces are a vital source for businesses to continue to flourish but there are still major roadblocks which can hinder a business’ efforts to capitalise on the booming sector. According to research commissioned by Vertex, which surveyed 479 finance professionals globally, seven out of ten sellers using marketplaces to trade online believe that indirect tax challenges could deter them from using them again in the future.

The complexity of ensuring a frictionless eCommerce experience

Whilst over half of respondents in the survey agreed that marketplaces are getting easier to use as a sales channel, ensuring that both operators and sellers can enjoy a frictionless experience is one of the biggest challenges in the space. Respondents indicated that they are looking for more support and guidance on issues including: how to ensure transactions and the transfer of money can be more seamless (65%), tax liabilities (64%), and compliant invoicing (63%). But what are some of the specific roadblocks both marketplace operators and sellers are experiencing?

The cross-border trade conundrum

85% of marketplace operators surveyed indicated that they are looking to increase their seller base, however there are numerous tax complications when trade crosses borders. Four out of seven operators stated they have struggled to manage tax liabilities and tax complexities around seller shipping locations. Online marketplaces are very much a global affair, with cross-border transactions being the norm.

The difficulty here is that both operators and sellers must comply with the different tax regimes of the countries they operate in, which can be a complex and burdensome process. Seller respondents reported a wide range of issues when they sell through marketplaces, including balancing their tax liabilities and knowing where and when they are liable for tax.

Complexities in every step of a transaction

Dig beneath the surface and the process of a transaction is much more complex than initially meets the eye. From listing fees to shipping and handling charges, or the previously mentioned cross-border trade complexities, every step in the transaction process brings multiple challenges to both the operators and sellers themselves.

45% of sellers surveyed want their marketplace operators to improve the process of finance and tax automation to overcome these barriers, but of the operators, only 56% manage all tax liabilities on their seller’s behalf. If marketplace operators want to ensure they have a healthy population of sellers, this figure needs to increase.

Tax technology for a trouble-free tomorrow

Although there are clear and significant indirect tax challenges for online marketplaces, the space remains an attractive channel for businesses to achieve their growth ambitions. 81% of businesses are taking advantage of online marketplaces to attract new customers and sell into more countries and upon further inspection, they attribute this expansion into marketplaces to reach a wider geographical market (57%), to being more competitive (50%) and to tap into cross-border sales opportunities (48%). It’s clear that sellers are wanting to utilise online marketplaces to expand their customer base globally and if operators want to increase their seller base and take advantage of the growing demand for this, and 85% of those surveyed do, then they need to ensure that their platforms offer a seamless experience for their sellers.

By investing in an end to end tax management solution which can handle all types of indirect tax requirements, you will be able to support sellers on their own individual growth journeys. In addition, you can rest assured that it will also enable them to feel confident that their chosen platforms can meet all the indirect tax requirements as they increase their cross-border sales.

To learn more about the taxing times for the marketplace and seller relationship, download the latest report by Vertex.

Business

Unlocking the Power of Data: Revolutionising Business Success in the Financial Services Sector

Published

18 hours ago

June 8, 2023

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Suki Dhuphar, Head of EMEA, Tamr

The financial services (FS) sector operates within an immensely data-abundant landscape. But it’s well-known that many organisations in the sector struggle to make data-driven decisions because they lack access to the right data to make decisions at the right time.

As the sector strives for a data-driven approach, companies focus on democratising data, granting non-technical users the ability to work with and leverage data for informed decision-making. However, dirty data, riddled with errors and inconsistencies, can lead to flawed analytics and decision-making. Siloed data across departments like Marketing, Sales, Operations, or R&D exacerbates this issue. Breaking down these barriers is essential for effective data democratisation and achieving accurate insights for decision-making.

An antidote to dirty, disconnected data

Overcoming the challenges presented by dirty, disconnected data is not a new problem. But, there are new solutions – such as shifting strategies to focus on data products – which are proven to deliver great results. But, what is a data product?

Data products are high-quality, accessible datasets that organisations use to solve business challenges. Data products are comprehensive, clean, and continuously updated. They make data tangible to serve specific purposes defined by consumers and provide value because they are easy to find and use. For example, an investment firm can benefit from data products to gain insights into market trends and attract more capital. These offer a scalable solution for connecting alternative data sources, providing accurate and continuously updated views of portfolio companies. Using machine learning (ML) based technology enables the data product to adapt to new data sources, giving a firm’s partners confidence in their investment decisions.

Suki Dhuphar

But, before companies can reap the benefits of data products, the development of a robust data product strategy is a must.

Where to begin?

Prior to embarking on a data product strategy, it is imperative to establish clear-cut objectives that align with your organisation’s overarching business goals. Taking an incremental approach enables you to make a real impact against a specific objective – such as streamlining operations to enhance cost efficiency or reshaping business portfolios to drive growth – by starting with a more manageable goal and then building upon it as the use case is proved. For companies that find themselves uncertain about where to begin their move to data products, tackling your customer data is a good place to start for some quick wins to increase the success of the customer experience programmes.

Getting a good grasp on data

Once an objective is in place, it’s time for an organisation to assess its capabilities for executing the data product strategy. To do this, you need to dig into the nitty-gritty details like where the data is, how accurate and complete it is, how often it gets updated, and how well it’s integrated across different departments. This will give a solid grasp of the actual quality of the data and help allocate resources more efficiently. At this stage, you should also think about which stakeholders from across the business from leadership to IT will need to be involved in the process and how.

Once that’s covered, you can start putting together a skilled team and assigning responsibilities to kick-off the creation and management of a comprehensive data platform that spans all relevant departments. This process also helps spot any gaps early on, so you can focus on targeted initiatives.

Identifying the problem you will solve

Now let’s move on to the next step in our data product strategy. Here we need to identify a specific problem or challenge that is commonly faced in your organisation. It’s likely that leaders in different departments, like R&D or procurement, encounter obstacles that hinder their objectives that could be overcome with better insight and information. By defining a clear use case, you will build a real solution to a challenge they are facing rather than a data product for the sake of having data. This will be an impactful case study for your entire organisation to understand the potential benefits of data products and increase appetite for future projects.

Getting buy-in from the business

Once you have identified the problem you want to solve, you need to secure the funding, support, and resources to move the project ahead. To do that, you must present a practical roadmap that shows how you will quickly deliver value. You should also showcase how to improve it over time once the initial use case is proven.

The plan should map how you will measure success effectively with specific indicators (such as KPIs) that are closely tied to business goals. These indicators will give you a benchmark of what success looks like so you can clearly show when you’ve delivered it.

Getting the most out of your data product

Once you’ve got the green light – and the funds – it’s time to put your plan into action by creating a basic version of your data product, also known as a minimum viable data product (MVDP). By starting small and gradually enhancing with each new release you are putting yourself in the best stead to encourage adoption and also (coming back to our iterative approach) help you secure more resources and funding down the line.

To make the most of your data product, it’s essential to tap into the knowledge and experience of business partners as they know how to make the most of the data product and integrate it into existing workflows. Additionally, collecting feedback and using it to improve future releases will bring even more value to end users in the business and, in turn, your customers.

Unlocking the power of data (products)

It’s crucial for companies in FS to make the most of the huge amount of data they have at their disposal. It simply doesn’t make sense to leave this data tapped and not use it to solve real challenges for end users in the business and, in turn, improve the customer experience! By adopting effective strategies for data products, FS organisations can start to maximise the incredible value of their data.