How to update your financial operations

A CFO walks into an office. What do they see? A virtual tangle of finance management systems? Expense management here, bookkeeping there? With a requirement for each tool to ‘bolt’ onto the business’s central accounting system, whether Xero, Sage, Quickbooks, or otherwise. 

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by Magdalena Hristova 09 Nov 2021

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Unfortunately, even some of the best integrations aren’t seamless, and many finance teams need an additional headcount to manage teething problems within their finance stack. While it’s true that modern CFOs have it easier than their predecessors thanks to automation technology, there are different challenges now.

 

Tools and software still need to be managed, and the lack of integration and transparency between multiple systems puts the financial accounting function on the back foot and makes collaboration difficult. 

 

So, what are the solutions?

 

  • Large scale ERP implementation costing 10s, 100s of thousands of dollars, or even millions?
  • An increase in headcount to paper over the cracks between systems? 2-3 accounts clerks in an S.M.E., for example.
  • Lower levels of regulatory and financial control? (Nope)
  • Or Payhawk, which covers all of these processes in a user-friendly way, giving managers real-time visibility over their spending against budget, whether it be expenses, card purchases, or supplier invoices?

 

CFOs and business digitization

In October, we spoke to Robbie Hadfield, finance manager at Dendra systems, for our podcast, The Untold Stories of Change. From expense management automation to relationship building, we discussed exactly how the role of the C.F.O is changing. We also spoke about some of the most commonly faced challenges when introducing system implementations and how to overcome them.

 

“Everything ends up in finance,” Hadfield explained. “No matter if it’s coming from sales, marketing or operations, eventually each transaction reaches the finance team”. Meaning there’s a lot more to finance management than simply crunching numbers. Hadfield describes his path towards a career in finance as rather unusual. Many accountants in the U.K. first work in ‘practice’ typically in an audit or tax role for three years, studying for their professional qualification before moving into ‘industry’. Hadfield’s first experience was with a company called Hawk-Eye, jumping into the deep end of being finance manager for a global company with 150 employees at the time. 

 

So, with his years of experience, how does Hadfield see the role of finance teams within organizations, and what’s crucial when managing high-risk operations? 

 

For a start, there’s more to finance than numbers

There’s a common misconception about finance departments. It’s assumed that working in finance will somehow see you working solely with numbers and exclude you from working with people. Instead, Hadfield emphasizes that working in finance is all about the relationships you build and, even more so, trying to get people on your side so that you can achieve change and progress together. This often starts from a difficult position for the finance team. Typically, old processes or poorly designed systems create major pain points for other departments, slowing them down and fundamentally decreasing their productivity. 

 

“There’s a certain art to getting the initial buy-in. You need a certain personality to engage in collaboration,” Hadfield explained.

 

Essentially, being good at communication and making an effort to maintain a large pool of contacts is invaluable when it comes to finance. Getting people’s support is fundamental but challenging. Many employees tend to stick to established systems, even if they don’t function well. So, while finance is about building relationships, convincing people that change is needed remains a pain point in many situations. And even when people want processes to change, there’s rarely a solutions mindset. Sometimes people like to complain about the process more than actually fixing it. 

 

For the best results, finance teams and stakeholders should consult with the broader team about their needs before introducing any new systems. That way, they can promote the new systems’ benefits and respond to feedback instead of appearing to impose new processes.

 

How automation is changing finance

“Automation is everything in finance,” said Hadfield, outlining why he’s open to automation and how and why technology makes sense when applied to financial processes. He explained that startups and S.M.Es need to reduce headcount and implement automated systems in order to experience steady growth. That way, the company’s development continues; intelligent systems, like Payhawk, are simply faster and cheaper. 

 

Payhawk, for example, manages the end-to-end spending processes that were traditionally split into multiple systems before, which reduces admin burden and enhances spend visibility and reporting capability. Finance teams can use Payhawk to streamline company card payments and admin and remove a lot of the traditional expense management burden. Plus, with 3% cashback on all company card payments, the service pays for itself.

 

Once you’ve introduced the necessary financial software as above, the whole hiring process changes too. Companies seek professionals to stay on top of the integrated systems rather than people to work around poorly designed processes through manual intervention.

 

In summary, scaling your business’ finance function is easy with the right tools. For instance, it’s crucial to choose the right SaaS solution, which corresponds to the unique company culture. “Systems that are flexible and, consequently, user-friendly, but at the same time facilitate excellent financial controls and segregation of duties would be the best, “ Hadfield said. The fact is, if you have a system people want to use, you will achieve a different attitude to compliance. If you have a sound system that is flexible and user-friendly, then the users will engage with it and buy into the compliance. So there’s less friction – and it’s easier to achieve the level of control you need.

 

The redefined role of the CFO

Automation redefines the role of everyone in a finance team. In the past, CFOs excelled in filling the books and paying close attention to numbers, whereas now, the position’s more oriented towards the market. 

 

In startups and S.M.E.s, CFOs act as strategic leaders and ensure the organization integrates systems and processes. These skills often come from the fact that they already have an invaluable understanding of data processing and possess analytical thinking. Hence, such skill-sets support CFOs in promoting meaningful change when taking a business through digital transformation. 

 

“There are always natural tensions between finance and other areas in business,” Hadfield pointed out. He explained that there could sometimes be a gap between CFOs and the rest of the team. Often, finance teams are seen as obstacles to getting things done because of some systems that ensure internal control. It’s vital to look at how employees within a business treat expenses in order to thoroughly understand the culture of a particular company, Hadfield told us. The interaction with expenses is something that all employees have to do regardless of their level. It’s always a good way of assessing the tone from the top.

 

Key considerations when integrating a financial software

After determining your scaling-up strategy, your business needs to consider how any proposed solutions will work in the specific company case.

 

“Let’s apply this to the Payhawk case to be more specific: the first thing you need to consider is how your finance team scales up,” Hadfield highlighted. Regardless of the software service, there are always pain points when implementing a new system, either for the finance team or the wider business using the product. While it’s challenging to examine potential problems, it’s crucial to set the right expectations for the system. 

 

“The questions we asked about Payhawk were; how does subscribing to the service make our operational teams in Dendra better? And how does Payhawk make our day-to-day operations better?” Hadfield stressed that the most crucial Payhawk feature for him was the ability to issue multiple company cards at once. Another aspect his team benefits from is the team cards feature, as it takes the pressure off the individuals when making payments. Having multiple employees linked to the same budget translates into good planning and management, crucial when growing a business.  

 

Digitizing your business processes translates into a highly flexible, secure, and transparent working environment. Check out our digital transformation ebook and see how A.T.U. adopted Payhawk company cards to scale their spend processes effectively and achieve greater spend visibility.

Written by Magdalena Hristova

November 9, 2021

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