Even small and medium-sized businesses can benefit from a holistic review of their technology stack, writes Ann Furlong.
Most businesses, regardless of their size, have the same basic processes. They sell a product or service, manage its sourcing and delivery, and then report on the outcomes.
While large companies have integrated, end-to-end systems to support these tasks, such systems tend to be too complex and expensive for small and mid-sized firms. As a result, most SMBs instead have to rely on less expensive, point solutions to help run their operations and track results.
This collection of disparate systems is known as a technology stack. The stack could include sales and record management systems, business intelligence and analytics tools, and financial close management applications. Increasingly, businesses are seeing clear benefits in evolving their stack to take advantage of continuing improvements in technology.
Why update the tech stack?
In the accounting department, upgrading an existing technology stack can make sound business sense. Manual, spreadsheet-driven processes that have been in place for years can be removed and replaced with streamlined, automated alternatives.
For example, rather than having to extract data from an ERP system, manipulate it in an Excel spreadsheet, and then export it into a reporting application, all these steps can occur seamlessly.
The business can also benefit from improved visibility. Data can be readily accessed via on-screen dashboards that can display custom views, specific metrics and KPIs. This can deliver levels of business insight that have not previously been possible to achieve.
Governance and control processes can also be improved. Senior managers are more easily able to see how their business is tracking and whether it is meeting its compliance requirements.
Factors to consider
While there are clearly business benefits to be gained from undertaking a financial technology stack update, there are also some key issues that should be considered. These include:
- Sequencing: The order in which new technologies are deployed can be as important as the technologies themselves. Consider the impact each will have on existing workflows and determine how the rollout can be completed with the least disruption to the business.
- Resource availability: Determine how many staff will be needed to implement the changes and whether they have sufficient time free to devote to the project. There is always the option of bringing in external consultants to assist with the project should resources be tight.
- Data quality: It’s important to remember that the outputs from new applications are highly dependent on the quality of data they are being fed. Examine all data sources across the business and ensure they are delivering the most up-to-date and accurate information possible.
- Integration: It’s likely that some existing systems will remain in place, so it is vital to consider how these can be effectively integrated with new applications and processes. This removes the chance that a slew of new manual workarounds will be needed.
- Change management: Ensure all staff understand what is being undertaken and the benefits it will deliver to them. Getting their buy-in early will help to smooth the transition process.
Benefits of an end-to-end solution
With an integrated technology stack in place, the accounting department will quickly see some significant benefits. It will allow the business to continuously evolve, automate and scale accounting processes to support timely and accurate reporting. This, in turn, will increase opportunities to analyse results and support ongoing business decisions.
Looking specifically at the close process, better integration also allows the systems of record to be more closely tied to the financial planning and analysis (FP&A) application being used.
Traditionally a business’ accounting team would have to extract data from sources such as bank records, the general ledger and sub-ledgers. This data would then be processed by staff undertaking manual account reconciliations, transaction matching and examination of spreadsheet variances. Once these tasks were completed, the data would then be fed into the FP&A application.
Through better integration, these processes can be significantly improved. By using software, such as BlackLine, to bridge the gap between the systems of record and the FP&A application, the financial close process can be streamlined and automated.
Taking this approach means the business can extract the most benefit from a truly integrated financial technology stack. Data integrity is boosted and the quality of output is improved. Transaction matching can be automated and previously manual workflows embedded. It also provides the opportunity to control document storage which can further improve staff efficiency.
The end result of a successful finance tech stack upgrade is the ability given to the business to embrace the concept of continuous accounting. This embeds control and period-end tasks within day-to-day activities, thus allowing the rigid accounting calendar to more closely mirror the wider business.
Rather than having a shifting workload that can put significant pressure on staff at certain points in the monthly, quarterly and annual cycles, that workload can be spread more evenly across the entire period.
The result is a better-balanced workload for all accounting staff at all times which, in turn, frees up more of their time to focus on value adding tasks such as analysis and forecasting.
Real-time visibility of business performance can also be achieved. This will boost business agility as management will know where the business is now rather than where it was last period.
Taking the time to revise a business’s financial technology stack will deliver significant benefits – and the best time to start is now.
Ann Furlong is director, operations APAC, for BlackLine. This article is sponsored by BlackLine.