I think we can all agree that the last 2.5 years have been worlds apart from what we are all used to. If we re-wind the clock & compare our today daily working lives to that of the same time in 2019, how different many of these aspects would be & that is leaving aside the commercial impact that some businesses have faced or worse, those that did not survive the covid-19 pandemic.
Now more than ever as business leaders or management, we are having to accept change in working styles, location & process to adapt to the changing landscape. Take the accounting world & AP, pre-pandemic how purchase invoices were received was kind of irrelevant as all staff members were office based so it didn’t matter as much if a high proportion of invoices were received through the post & likewise it didn’t matter what tools were used to gain authorization of invoices as majority of approvers would be in an office location. This example illustrates how these practices needed to evolve & are still evolving for many businesses need to adopt a form of digital transformation to account for differing working practices.
These types of tools aid the simplification of business through digital working practices meaning data can be received from any source, in any format & access by specific delegates in any location or any device, this type of change is a progressive one & should be seen as one that is an aid to users not a replacement of; but this type of tool is not the only digital simplification that has evolved.
ERP & Accounting solution authors have had to evolve in the same way, recognizing the shift of finance functions from these hidden departments that only come out of hiding once per month to inform the business of its status of cash flow, budgets, & management accounts, to these open, collaborative, knowledgeable & informative departments with tools at their disposal to now enlighten many users outside of its own department. This type of evolution was & is only possible through digital transformation.
Let’s take Sage Intacct as an example, this product is one of the front runners in its way of thinking of the end user & its cloud native approach. I call it one of a limited number of applications that has a focus on ‘the contributor to the application’, which is the 95% of people outside of finance rather than just the 5% that sit in Finance. The embedded tools & data available to aid these specific roles would have typically been either been controlled by finance or worse only available to Enterprises who could afford it, Intacct recognized this gap & built a solution to fulfil this requirement ahead of the demand curve.
So, what can we expect in further simplification processes for business utilizing digital working tools & data?
Here are my top 3 & yes, a slightly biased view but an accurate one all the same.
1. Buy from anywhere, record from anywhere, account for from anywhere:
Online Buying – Punch-out, Punch-in, Vendor Plug-in.
In my 20+ years in business, I have never such similarities in B2C level transacting to that of B2B. 5 years ago how we purchase & how we account for purchases could have not been any more different. B2B could not have been any more disconnected if it tried, Telephone orders, email orders, even large categories on print to shift through & place with manual order pads & duplicated error prone processes. If a business expected you to transact in that way for your personal purchases, you would avoid it as it is simply to much hassle & time is precious, yet somewhere we have been accustomed to this in business & it is the norm, well until now!
Here we find technologic advancements that allow the simplicity of purchasing for business become more aligned with B2C, removing duplication, the need for training, complicated processes but also allowing for both SMB’s & SME’s to have real insights into costs well before the invoice has arrived, yes a true cashflow.
These 3 technology types, (two of which are industry firsts announced by Compleat recently) are enabling businesses of all sizes to transact with vendors digitally, record the purchase (where required), apply costs to budget or nominals (where applicable) & even automate any pre-authorization prior to the placement of orders all done by simply placing an order on a vendor’s website & all the rest is dealt with for you.
These types of technology should allow for activation within minutes for every vendor globally meaning that business owners have a true account of commitments & cashflow, budget holders (buyers) remove the need for labor intensive & at times duplicated tasks but most of all invoices are on average accurate first-time round.
2. Spend data driving informative current & future spend decisions
If a business only knew what it was spending its money on & what the average market price both high & low was for these items, then we would in effect be able to make better decisions on what to buy from where combined with the automation of how we do this using online buying. You might say we already have this data in our accounting system, but this is simply not the case with majority of businesses for a couple of reasons.
The first is bills are typically registered in some AP Automation solutions & majority of ERP solutions summarized by vendor, rather than segmented as the bill portraits using items codes, descriptions & even industry standard ASIN codes, moreover the second reason is these allocations lack the categorization at item level to truly group together costs incurred under typical procurement categories by geography. The third & final element is without knowing what similar businesses are paying it is hard to make the data be of any use to drive information & of course optimization but this where these new innovations come in.
How this work is the data that is captured & stored from bill’s received from vendors is truly valuable for future analysis, it can inform the smallest & largest of business of activity that can simplify process & also optimize spend. These products hold large Data Lakes or Delta Lakes of information that can, in real-time give insight to business that they never thought possible & in such times of squeeze where costs being incurred are at their highest as they are at the moment, this type of data can even become a profit center in their own right. A final shift away from this type of service being reserved for Enterprises that can afford big data & those with who have large spend levels that contract group purchasing organizations (GPO), these reporting tools remove these barriers, giving back your own data in a structured way making this possible now. Data really is paving the way for the future in data visualization.
3. My third & final one to watch is surrounding the buzz words of Carbon & Sustainability.
Cop26 have grouped & provided some real milestones that we all must achieve in tackling both our personal & business footprints but how might we do this?
Let’s take a small business, If I am a business owner who is sustainably conscious or a larger business who is legislated to act & report on their carbon footprint, the two examples are not that vastly different, it is simply the volumes & impact that differ. Furthermore, for small business the affordability of carbon focused offerings are just too high due to the face they are typically delivered through professional services & require too much expensive time & are required to be completed frequently to have any sort of impact.
This is why I have highlighted this as my 3rd one to watch, evolving technology is enabling businesses of all sizes to see a true impact & measurable impact on their carbon & sustainability focus through transaction led data that is continually evolving & changing as businesses shift, providing them the ability to make a conscious decision on their next course of action.
An example of this is at point of purchase, if a business knows the carbon impact their last 6 months of purchases with a certain vendor consisted of & also knew the varying supporting ways in which they could reduce this footprint, then this gives a real time audited & measurable output on what their action has done & permits the business to carry out change. Examples of change can include reducing/combining deliveries with a vendor that do not use electric or hybrid vehicles, switching vendors to a more sustainable one that has a lower footprint by default or even visualizing the differentials at item level between an item being purchased from vendor & the same item being purchased from another & how this could impact your own carbon footprint. All of this will become standard in future!
Compleat have a whole host of solutions no matter where you are in your finance automation journey. From AP Automation, P2P, & Integrated Online Buying.