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IMPROVE FINANCIAL PROCESS EFFICIENCY & EFFECTIVENESS

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Geoff Brannon, CFO, Oversight

 

Many finance and accounting professionals are under immense pressure to ensure their financial processes and transactions are managed efficiently and effectively. This became especially critical during COVID as organizations focused more on reducing waste and cutting unnecessary costs.

Typical organizational spend audits look at small samples of past spend manually while also managing many other financial processes. This is time-consuming yet viewed as mission-critical by the organization’s leaders. Thankfully, with the evolution of automation tools like cloud-based software and artificial intelligence (AI) this should be a thing of the past for finance teams.

 

Improve Efficiency

It’s hard to be effective without efficiency so we’ll start there. Your team is likely overburdened and working remotely. It’s Q4 and stakeholders expect returns. First, the team should assess where they are spending their time manually. For example, take the budget and forecast process critical for all finance organizations.

While historically Excel was the go-to tool used to manage this process, most large organizations and advanced finance teams have adopted better planning solutions. The beauty is these interface directly with the organization’s ERP system, meaning actual results flow into the planning tool in real-time. Gone are the days of exporting financial information from the ERP system and manually re-entering that into the Excel budget file. Talk about an efficiency gain!

 

Improve Effectiveness

Gaining visibility is critical to successful spend analysis. Mistakes can be made in any department including the finance team. Factors like heavy workloads, inefficient processes and the introduction of remote working, it’s understandable errors happen. To improve effectiveness in the finance department, explore the vast array of software tools that can dramatically improve processes.

Compared to manual efforts, using software automation tools results in better efficiency and accurate outcomes. Beyond saving money, one of the best outputs of these service tools is time. As finance professionals, time and money are what really matter. Leaders can empower their teams by providing competent data software that works 24/7. Manual processes should be left in the past. Cloud-based platforms ensure risk mitigation by getting ahead and identifying leaks and errors.

 

Become Strategic in Spend Management Efforts

Finance teams measure the performance and activity of the organization. And spend management is certainly one area that finance teams can help improve. By holding individuals and teams accountable, both in terms of mission-critical and discretionary spend, this empowers leaders in the department. Of course, in a perfect world, every employee of an organization would be a good corporate citizen and trusted to spend the company’s money responsibly. And in that same world, no external parties would attempt to de-fraud a company in order to make off with its cash. But we don’t live in a perfect world.

A 2020 study by the Association of Certified Fraud Examiners showed that the average organization loses up to 5% of its revenue to fraud each year. This staggering statistic is one that should get the attention of every finance professional. Fortunately, there are spend risk software tools that can detect and protect against spend errors, waste and fraud. Adopting this method is perhaps the easiest way that a finance team can help improve a company’s spend management efforts.

 

Transformation in Action 

Executing a spend analysis is your organization’s barometer of truth. It sheds light on the data providing a powerhouse of information and insight. Through adopting software automation solutions, finance organizations will reduce the time spent on manual activities. Think of how you want to advance your team as the quarter closes. Transforming the finance department to be more efficient in this way yields two areas of improvement:

  1. First, massive efficiencies are gained by letting software do the work that was previously done by a human. This frees up team members to invest their time on more strategic areas of finance. Alternatively, these efficiencies can result in cost savings for the organization.
  2. Second, software automation delivers more accurate information and results, thereby improving the effectiveness of a given process. Take the example of spend risk systems I gave earlier. Instead of manually auditing a certain percentage of an organization’s spend looking for errors, waste and fraud, the spend risk solution can audit 100% of transactions and will find things that a human would miss. This results in a significant improvement in the effectiveness of the process as compared to manual, human efforts.

To increase efficiency and effectiveness in your department by empowering spend management, consider the benefits of a modern software automation tool. How does your organization perform spend analysis? I’d be happy to share how many of our clients have seen great strides implementing spend analysis software.

 

Business

IS SCARCITY OF TALENT THREATENING THE UK’S FINTECH CROWN?

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Opinion From Rafa Plantier, Head of UK and Ireland at Tink

 

From the Square Mile to Canary Wharf, London has been the historic centre of global finance, with long-established trading exchanges and trusted financial institutions. In the digital era, it has also ensured that it’s moved with the times to become a thriving hub for fintech.

But the UK financial services sector is now at an inflection point. In the past year, London’s position as a global fintech leader has been under threat. Earlier this year, Amsterdam overtook The City as the largest European share trading hub. The European Banking Authority moved from London to Paris. And Dublin, Paris and Frankfurt are all competing to win a greater share of the European financial marketplace.

The culprits of the shift are the twin challenges of the pandemic and Brexit, combined with the speed of technological transformation in financial services – disrupting the traditional flow of people, capital and ideas. So the pressing question for the industry is: how do we maintain and, more importantly, accelerate momentum to retain London’s fintech crown?

The answer revolves around one key thing — people.

 

Diverse talent drives innovation

Attracting the best talent is crucial if the UK financial services sector is going to continue to thrive and retain its global position as the preeminent financial centre.

In February 2021, the Kalifa Review laid out a strategy and delivery model for the UK to lead the fintech revolution, covering five key areas. These included skills and talent, investment and international attractiveness and competitiveness. But what became clear was that access to the right level of highly skilled talent was one of the biggest challenges for UK fintech, with barriers spanning both domestic skills shortages and the need to access foreign talent seamlessly.

As a native Brazilian in the UK, working for a Swedish-owned fintech, I understand these challenges as well as anyone. I love London, but we must recognise that fintech firms need unique talent and skills, and such a talent base can’t be met by a single city – not even one as resourceful as London. Not only do fintechs require technology and data specialists, but also experienced managers with good knowledge of high-growth companies and financial services.

As someone lucky enough to have worked with startup and scale-up fintechs across the world,  I understand the unique grounding that comes from being a part of a high-growth global company. That’s why I believe it’s vital that we attract people from across the world with commercial experience at ambitious, rapid-growth businesses — so they can bring this experience to bear on the UK financial services sector.

At the same time, many companies face renewed pressure to create new services and products to meet expectations for growth. That is why it’s critical that the UK has access to people with the right technical skills in areas such as software engineering, DevOps, Cybersecurity and data science.

Put simply, having the smartest minds delivering the best products is good for everyone. It drives efficiency, productivity,  growth and, ultimately, prosperity.

 

The UK is open for fintech

The UK should be proud of being a fintech pioneer and the driving force behind legislation that helped usher in the era of open banking. There is now an exciting opportunity to take this even further. Having access to a diverse pool of talent and skills will empower the financial services industry to create innovative products to tackle complex social challenges, such as better B2B payments, financial inclusion and climate change.

The good news is that the UK government clearly recognises the role the industry has to play in driving growth and innovation. The 2021 Autumn Budget reaffirmed commitments to reskill the nation. With £3.8bn budgeted for skills and a formal criteria for the long-awaited Scale Up Visa, the Chancellor announced a set of proposals that will support the breadth of our sector — from startups right through to unicorns and incumbent banks. This will be essential for fintechs like ours to continue to trailblaze and for the UK to differentiate itself on the global stage.

In an increasingly competitive global landscape, and to sustain momentum, we must keep talent avenues open to attract the best of the best in the industry. As one of the fastest-growing areas of the UK economy, the benefits of nurturing UK fintech to drive productivity, growth and lead the UK’s post-pandemic recovery, cannot be overstated. 2021 has seen a surge of activity in the industry and I am eager to see what London’s fintech sector can achieve in 2022.

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Business

THE EVOLVING TECHNOLOGY NEEDS OF THE FINANCE DEPARTMENT

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THE EVOLVING TECHNOLOGY NEEDS OF THE FINANCE DEPARTMENT

Jennifer Sims, Senior Consultant at Xledger

 

The world of finance software is evolving quickly, but with many new software contenders entering the market it can be a mindfield for organisations. Many finance teams are already using multiple accounting apps and software packages for bookkeeping, payroll and invoicing to service individual needs. Whilst it may work fine for now, this segregated approach isn’t sustainable for long-term growth. The world is swiftly moving to agile, automated ways of working. As a result, there is a growing need to choose suppliers that can fulfil multiple functionalities within the one platform.

Financial software is evolving at such a pace that it can be difficult to keep up. Changing up a finance solution is a big step and ease of migration can be a substantial factor in determining which solution provider to go with. But how do you choose a solution that will grow with your business and still offer something innovative in five or ten years down the line? The fear is always that non-techie organisations will end up falling behind, but in such a highly concentrated industry, how do you decide which solution would work best for you?

 

Cloud-first: the term that makes all the difference 

You could find a ‘cloud-based’ service with an application that comes with automated audit trails to make it easier to meet compliance and record-keeping obligations, for example. But for a solution to offer all of the many future benefits promised by the cloud, it needs to have been built specifically for a cloud environemt from the outset – ie. not an on-premise built system that has been later adapted. Cloud-first services (true cloud) were always intended to leverage economies of scale, cope with live updates, be accessible from anywhere with an internet connection, and to scale rapidly, to name just a few of the many benefits.

When we talk about innovation in financial technology, we’re not just talking about software that makes it easier for the financial controller to create reports. If eliminating reliance on Excel spreadsheets is the only tangible benefit you have to really shout about, you are missing out on the real deal. With ‘true’ cloud finance software the sky is the limit.

Finance and accounting technology needs to directly meet the needs of the finance function and support the wider business needs.  When looking at accounting software platforms you’d be hard pressed to find one that doesn’t now promise ‘cloud-based’ enterprise resource planning (ERP) capabilities. The cloud is nothing new, but it’s the way that a solution harnesses this environment that makes a real difference. And here is where there is a need to read between the lines.

 

Automate more with true cloud 

Historically, repetitive and manual tasks are typical of the finance role – from invoice postings to expense claims handling – these can overwhelm the finance team. Research by Xledger[1] has found that an enormous 91% of CFOs and finance decision makers are carrying out at least one of these repetitive tasks as part of their job. What’s more, senior finance leads are averaging a whopping 25 hours per week carrying out repetitive and manual tasks, compared with 15 hours for other finance decision makers.

A modern, true cloud finance system can enable your business to automate repetitive tasks and provide one source of truth so that teams can make informed business decisions that will help to scale a business. Bank reconciliation, dashboard creation and reporting are just some of the tasks that can be handled automatically.These capabilities are aiding overtasked finance teams and saving hundreds or thousands of hours a year.

Whilst different companies are at different stages in their digital transformation what is clear is keeping up with the latest technology is fundamental to the future success of an organisation.

Xledger is a true cloud finance solution. The basics include invoicing, robust general ledger accounting, detailed slice and dice reporting, purchase orders, billing, VAT reporting, and cash and bank payments. It also adds process and structure to the enterprise with procurement and inventory, budgeting and forecasting, and project accounting. Users are always on the latest version of the software and with regulation more stringent than ever today, Xledger is ISO 27001 accredited.

Choosing the right provider for your financial ERP solution comes down to whether it has the fundamentals right. When hosting all of your vital data in the providers’ own servers, it should evidence a highly tested security process that comes with backup services as standard.

As our demand for technology capabilities grows and as ERP models progress, innovation will become the structure for growth – and there is no end to the possibilities.

 

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