Finance

Staying dry during the recessionary storm of 2023

Published

1 week ago

January 17, 2023

admin

As we enter 2023, many business leaders may be experiencing feelings of uncertainty and apprehension. Heading into a recession and with costs continuing to rise at unprecedented rates, the next 12 months will undoubtedly be tough. But all is not lost. Finance Derivative spoke to five industry experts to determine what we can expect from 2023 and how to weather the storm ahead.

Doing more with less

We have already seen the initial impacts of the looming recession in 2022, as food, fuel and energy costs began to soar. Hugh Scantlebury, CEO and Founder of Aqilla, recognises that this is likely to continue into 2023: “The serious problem for next year comes from inflationary pressures, causing rises in food, fuel, energy, and resources. For businesses and individuals, the cost of living and operating will go up. Although salaries will rise accordingly, all those things must be accounted for, so we will need to keep a much closer eye on what’s coming in, and what’s going out.”

“As the recession takes hold, I wouldn’t be surprised to see the Government viewing fines for data misuse as a way to raise additional cash,” adds Michael Queenan, CEO and Co-Founder of Nephos Technologies. “Not only could this fill a significant fiscal shortfall without hitting voters, it could also strengthen Government support as it presents itself as being serious about data protection. It’s a win-win for the Government so I think it is inevitable that the ICO will be hot on the tails of companies that fall foul of permitted data use.”

“2023 is going to be all about doing more with much less,” notes Bruce Martin, CEO of Tax Systems. “Not only will all businesses be tightening their belts due to rising costs, but particularly in the tax industry, there is a severe shortage of skilled professionals. The main problem is that everyone is embracing technology and, therefore, requires staff with the knowledge to utilise the implemented tech. With this huge increase in demand, the supply of quality developers is being stripped. Simultaneously, we’re not seeing the huge influx of new tax talent needed to meet such demand. This forms the basis of the ongoing ‘war for talent’.”

Automate the future

A key method that will prove crucial in doing more with less will be automation. Scantlebury from Aqilla explains that “automation, artificial intelligence, and machine learning within finance functions can help accounting teams considerably. They can do the heavy lifting, the time-consuming data entry tasks and the repetitive work that can fill up so much of the working day. They also remove much of the grind and monotony — freeing up the time of skilled professionals to add value to the business. Although the finance sector is currently behind the curve in adopting these technologies, hopefully, 2023 will be the year that businesses push and transform the industry once and for all.”

“The manual, monotonous tasks should be automated to free up time for training and development that will accelerate the value being added to the business,” agrees Tax Systems’ Martin. “People don’t want to spend 8 hours a day inputting data into a spreadsheet and they shouldn’t have to when technology can automate such tasks.

“Tax has been lagging behind in the digital revolution that many other industries have experienced in recent years. We have seen the beginnings of this in 2022 but I hope that 2023 will be the year it truly takes off.”

Starting 2023 as we mean to go on

2022 has been a transformative year for the finance industry, as many organisations found new ways to embrace technology. Financial institutions will continue following this trend in 2023 whilst ironing out the creases and righting the wrongs of their journeys so far.

Andrew Doukanaris, Business Director Fintech Europe at Intellias, acknowledges that the success of Buy-Now-Pay-Later (BNPL) payment options will continue over the next 12 months and beyond: “BNPL schemes have become a practically overnight sensation. And in 2023, they are set to continue their ascent. One recent study, conducted in 2021, found the market is set to reach a value of $3.98 trillion by 2030. That’s a huge increase from only $90.69 billion in 2020. And Gen Z’s use of such services grew six-fold in 2021 so it is likely that it will inform consumer behaviour far into the future.”

Similarly, Eyal Sivan, Head of Open Banking at Axway, recognises that open banking hasn’t been as successful as previously predicted: “Although Europe pioneered open banking with their PSD2 regulations, their efforts have been considered by many to be lacklustre at best and an outright failure at worst. Balkanization of standards, inconsistent implementations, and tepid enthusiasm on the part of incumbent banks have led them into Gartner’s Trough of Disillusionment.” But 2023 could be the year that Europe catches up and reaps the technology’s benefits. “However, as the Europeans observed the successes of those that followed, notably in Brazil and the Middle East, they started to revisit their approaches. While PSD2 was centred around payments with data sharing added afterward, the impending updates to legislation (by the name PSD3 or otherwise) will more than likely have a broader focus on generalised data sharing, open finance, and even open data, as Europe catches up to its peers.”

Equally, “Operational Resilience regulation is the dominant theme on the regulatory agenda”, notes Gary Lynam, Director of ERM Advisory at Protecht. “Resilience is shifting the organisational mindset and very much seen as a catalyst for change. What is needed is a structured approach to building operational resilience maturity over time. There is no room for cutting corners. We are likely to see high-profile cases of hefty fines for those financial institutions that fail to successfully demonstrate their ability to recover from stressed events. It is well advised to get ahead of the game in building accountability and tolerance against potential operational disruption, not only to meet incoming new legislation but to be ready for potential disruptive events that could be on the horizon.”

Yet, it is impossible to truly predict what the next year has in store for us – the last couple of years have certainly been unpredictable! As Aqilla’s Scantlebury concludes, “Ultimately, who knows what will happen next year?! We didn’t know there was going to be a war in Ukraine and we didn’t see the energy crisis coming. So, there are a lot of unknowns as we head into 2023…” All we can do is keep our fingers crossed that they are positive surprises!

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Business

Accounting Automation in the Future

Published

15 hours ago

January 26, 2023

editorial

Accounting automation is the process of streamlining repetitive tasks in financial processes. For example, some processes like invoicing are time-consuming and repetitive. Automation can reduce manual labor and save businesses both time and money. Also, it helps improve accuracy, reduces errors, and provides more accurate financial reporting.

Accounting automation in the future will be increasingly important for businesses to stay competitive. But every new change comes with both advantages and challenges. Let’s dive in to get ready for this future trend.

Potential Future Benefits of Accounting Automation

Increased Efficiency and Cost Savings

Accounting automation is a great way to increase efficiency and cost savings. For example, AI bookkeeping uses advanced algorithms to automate many accounting tasks. So, companies can track expenses, prepare financial reports, and more using AI.

It reduces the time needed for manual entry. So, businesses can spend fewer labor hours on tedious processes. They can increase efficiency by freeing up resources for more strategic work. It also helps reduce errors and inconsistencies associated with manual processes. So, the cost of compliance is lower because of greater accuracy.

Improved Accuracy and Reliability

Accounting automation can improve accuracy and reliability in accounting processes. For example, Automating bank reconciliation is less prone to errors from human mistakes or miscalculations. You can automate the process to identify discrepancies between the bank statement and accounting records. It helps to ensure that financial reports remain accurate and reliable. So businesses can take corrective action faster than processing data manually.

Streamlined Business Processes

Streamlined business processes involve eliminating unnecessary steps, reducing paperwork, and automating repetitive tasks. This allows businesses to focus on higher-value activities, such as developing new products, improving customer service, and developing strategic plans for the future.

Making a Better Decision

Accounting automation can enhance decision-making in 3 ways.

1. It enables businesses to access real-time information from multiple systems. So they can identify trends for better decision-making.
2. Automated accounting also helps with forecasting, budgeting, and auditing tasks. It enables businesses to be more proactive in their decision-making processes.
3. Also, automated accounting tools can integrate with enterprise resource planning (ERP) systems. They can manage data across the enterprise and make concise decisions that are favorable to the company as a whole.

Increase Customer Satisfaction

Accounting automation can help businesses increase customer satisfaction by streamlining their processes and providing a more efficient customer experience. For example:
4. Automated accounting systems can automate tedious manual tasks such as invoicing, data entry, and payroll processing. This allows businesses to focus on other aspects of their operations that are more important for customer service.
5. Automated accounting systems can also provide customers with more accurate and timely financial information. The information can help them make better decisions about their finances.
6. Also, accounting automation enables businesses to respond quickly to customer inquiries. It helps reduce wait times and improve the overall customer experience. So, you can build better relationships with their customers.

Improved Accessibility

Accounting automation takes place online or comes with cloud-based solutions. So, you can access your information and do your job from anywhere instead of being confined to one spot.

Challenges to Implementing Accounting Automation in the Future

Cost of Technology Infrastructure Upgrades

Automating an accounting system often requires businesses to invest in new hardware and software, such as servers and other associated equipment. These upgrades come with a hefty price tag that may be difficult for small businesses to afford.

There are also extra costs, such as installation fees, setup charges, software licensing fees, cloud storage costs, and maintenance fees.

Training Requirements for Staff Members

Accounting automation involves using advanced technology to automate certain processes. So, it creates a need for trained staff members who can handle the new technology. Training requirements vary depending on the type of software used.

Some common training includes record-keeping procedures, software applications, and troubleshooting skills.

Regulatory Compliance Issues

Accounting automation can be a time-saver, but it also requires firms to be aware of the applicable rules and regulations. Companies must ensure that their automated systems are compliant with relevant laws and regulations such as Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and other applicable accounting standards.

Besides, they must also comply with legal requirements related to taxes, financial statements, and other reporting obligations.

So, businesses must consider the complexities of regulatory compliance when automating accounting.

Security and Data Protection Concerns

As businesses move their accounting processes to the cloud, they are exposed to a wide range of potential security risks. Data breaches can cause significant damage to the business’s financial and reputational integrity. Besides, the complexity of automated accounting systems can make it difficult to identify and detect suspicious activities or errors in the system.

To ensure data is kept secure, businesses must have strong measures in place to protect against unauthorized access, encryption, and regular backups of data.

Furthermore, companies must train their staff on the proper use of the system. It helps staff to know how to protect confidential information from being accessed or misused by unauthorized personnel.

Businesses may also need an experienced IT team to monitor and maintain the system to keep up with any changes or updates for optimal performance.

Final thoughts

Accounting automation has come a long way in the past few decades. It is likely to continue to advance in the future. As technology continues to evolve, more businesses will likely begin taking advantage of automation in their accounting processes. So, businesses should be aware of the potential challenges and prepare to stay competitive.

Finance

Weathering the economic storm in 2023

Published

2 days ago

January 25, 2023

admin

Nikki Dawson, Head of EMEA Marketing at Highspot

New year, new business challenges. When it comes to creating and converting leads into sales for a business, both the marketing and sales teams are critical. Both functions think differently but are equally important in driving growth and revenue. Now more than ever in the current economic climate alignment between the two to achieve business goals is vital to survival.

Entering 2023 it’s important we look back and pinpoint where there’s room for improvement within our business and between our teams. With this, I predict the majority of businesses will realise it’s now critical to get their teams to communicate, collaborate and align more effectively.

What we learned in 2022

Findings from a recent survey of sales and marketing professionals found that over half (52%) of sales and marketing leaders in the UK agree they don’t understand which marketing assets are driving results with potential prospects. For marketers, this lack of visibility over assets limited the amount of valuable oversight which would allow them to improve content and increase adoption.

As a result, we’re now left with over a quarter (29%) of marketers not feeling confident in their ability to demonstrate the ROI achieved by marketing initiatives. Due to this, 30% of those surveyed this year feel a lack of confidence in creating marketing assets that have demonstrable success at meeting specific business objectives and driving sales growth.

Equipping teams with the right tools and technology they need to achieve business objectives seems obvious, but the latest research reveals that over a third (34%) of marketers aren’t confident they have the tools they need to manage and maximise digital marketing initiatives. Furthermore, 30% of UK marketers believe that a lack of efficient technology and tools and inconsistent use of CRM (31%) are barriers to their company’s sales and marketing collaboration.

These are all crucial learnings for what marketers have identified as key barriers in their role, it’s now down to business leaders to listen and take action.

How was revenue impacted?

The lack of alignment between marketing and sales, and the limited visibility over how digital marketing initiatives performed in 2022 had a negative impact on businesses’ ROI. This, as well as not having a single source of truth for marketers and salespeople led to content chaos and became a pain point for both parties wanting to do their jobs effectively.

For business leaders, during a time when demonstrating and justifying marketing and sales spending is needed now more than ever, the gap between marketing content, salespeople and ROI is of great concern.

The year ahead

Misalignment between sales and marketing means, at best, energy and resources are being wasted. At worst, it leads to strategies directly contradicting each other and not being delivered, while team members get frustrated and potentially leave.

Sales enablement has proven that it can dramatically resolve these pain points and be the foundation for alignment. With 72% of both teams equally agreeing that implementing sales enablement to support sales and marketing is something they believe their company should consider in the near future. It’s safe to say that in 2023 may well be the year we see it come into the mainstream.

By design, sales enablement software bridges the gap to provide a platform for alignment, offering one source of truth for linking sales and marketing activity to revenue. This year, the research found that the vast majority, (71%) of sales and marketing professionals agree that a lack of alignment between their teams has had a negative impact on revenue, and 52% of sales and marketing leaders in the UK agree they don’t understand which assets are driving results with potential prospects.

It’s clear that the need for aligned business functions has never been greater and soon, marketers and salespeople will call for AI-powered sales enablement as an essential tool to do their job effectively.

Now is the time…

If businesses want to optimise their work and maximise profits in the turbulent economic climate, they need to focus on driving change from the front by aligning their sales and marketing teams. Smart investment decisions that adapt processes based on buyer engagement with marketing content, and seller activities will be crucial in the coming months.

Having a sales enablement process in place can provide the necessary framework to begin coherently organising, finding, sharing, customising, and analysing content. Sales enablement platforms can be a one-stop shop for sales processes and marketing insights and it’s no longer something that can be overlooked by businesses.

Final thoughts

The need for optimisation has never been greater. In order to maximise profits sales and marketing functions need to work together seamlessly. This year we can expect to see more businesses utilising sales enablement technology to achieve key milestones. With this, marketers and salespeople alike will recognise sales enablement as a crucial day to day tool that is just as essential as the CRM they’re using today.