Companies are facing an ever-growing compliance burden as regulations increase and with skilled talent hard to come by, finance teams are trying to do more with less. Businesses in the SME bracket will potentially feel this more than larger corporations who may have bigger, better equipped finance teams. Adam Zoucha, MD EMEA at FloQast, believes many elements of the finance function rotate around the basic mechanics of the month-end close. In this article, he explains how automation can help SMEs in this area.
It’s not easy keeping up with regulations these days. From the ever-unfolding impacts of Brexit to the revolving door in Number 10, UK businesses are faced with a bewildering array of changes in the red tape department.
Rapid regulatory changes bring a whole slew of challenges: an increase in costs per control, additional processes to organise, data to find and an overall lack of bandwidth and skilled labour. Those difficulties don’t just keep finance and accounting teams from performing at their best – they also cost the organisation financially.
That would be a worry at the best of times, but with skilled talent particularly hard to come by at present, finance teams are being forced to manage more regulatory demands with fewer resources. And to top it off, if your business is in the SME bracket, chances are you’re feeling this cocktail of pressures more acutely than larger corporations with bigger, better-equipped finance teams.
CFOs and their teams have a huge amount to keep up with, and it’s not just in the day-to-day that these pressures take their toll. Many SMEs working on growth will either undertake or be subject to mergers and acquisitions. If your compliance initiatives are struggling to keep up with regulations, any due diligence processes will be much more complicated, potentially resulting in major costs – or failed deals.
So what’s to be done – should you focus on improving your internal processes? Hire external consultants? Improve the programmes you use for your work?
Give the repetitive jobs to the machines
To an extent, all of these approaches have merit in their place. But at the end of the day, dynamic regulatory landscapes need dynamic compliance solutions. If you’re looking to overcome the compliance burden, automation has to be at the centre of your strategy. Particularly with the skills shortage looking set to last, automation is a crucial tool to improve transparency and efficiency, ultimately contributing to cost reductions.
This isn’t just pie in the sky – advanced automation capabilities are increasingly accessible to smaller organisations with smaller teams. As a result, investing in automation processes isn’t just a necessary step for ‘those who can’ – it’s a genuinely achievable way to modernise your compliance capabilities and help your team stay on the top of all the new forms, reports and data requests they have to complete. With regular tasks automated and staff freed up to work on more valuable tasks, teams can more efficiently handle compliance needs, reduce the burden of controls and accelerate positive change across an organisation.
If you’re wondering where to start, remember that many elements of the finance function rotate around the basic mechanics of the month-end close. If you make the close work better, you’ll likely end up with a more efficient finance and accounting department and a more organised approach to compliance and control.
Transparent, efficient and happy
All very well, you might say, but the market is flooded with accounting software. Where should we look? What are we even looking for?
Well, at the most basic level, you’re looking for a tool with which to do a job. It needs to work out of the box, and it needs to be easy to use. So, ask yourself – was this platform made for accountants or for IT teams? Was it designed by people with first-hand experience of the stress and pressure of the close? Will it make day-to-day work smoother, improve our communication and give us the information we want, when we want it? Or will it be another to-do-list-generator for our already overstretched team?
In short, to avoid buying a white elephant instead of a helpmeet, there are three big things you need to keep in mind: transparency, efficiency and happiness. Does it make it easier for your team to keep in touch with each other, see what needs to be done and track to-do lists? Does it enable them to put their hands on the data they need and reduce the time between month-end and reports sitting on C-suite desks? And does it – perhaps most importantly – put a smile on accountants’ faces? Not, perhaps, the first thing you think of when buying software – but trust me, if your beleaguered team suddenly find they can do the same jobs in half the time, they’ll be smiling.
Better data means easier M&As
Finally, back to that point about M&As. Buying up and being bought out are waypoints along the path for most small businesses, and when done well, they can be moments for renewed purpose and fresh success. Compliance never sleeps, though, and handing over from one owner to another is tricky if the rules you’re trying to hit are a moving target.
With all that said, as organisations pursue major financial events like M&As, improving processes with automation increases the chance that all activities around compliance and the close will be in order beforehand. It will also allow organisations to gain critical insights to navigate the immediate post-M&A period, when quick action is often required to even out the bumps caused by such a major change.
There’s no such thing as a one size fits all, magic-bullet accounting software. Compliance is tricky, no matter what system you’re running. But when the market for SME-friendly automation is really starting to blossom, there’s little justification for holding out. Think of it as another member of the team – a hyper-efficient one, who can bring the best out of your staff, lighten their load and give them the joyful parts of their job back.
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