Forced to choose between investing in business development initiatives to boost sales and growth, and projects and programs to get their houses in order, they’ll typically plump for the former.
No surprise then that recent global research commissioned by BlackLine revealed the majority of mid-sized organisations didn’t have the same bird’s eye view of their operations and finances as their larger and smaller counterparts. The former typically have funds to invest in optimising their finance departments and stand to enjoy a significant return on investment when they do. Conversely, by virtue of their lack of scale, the latter are able to keep a good handle on their positions, without having to invest in tools and technologies.
Many mid-sized businesses, meanwhile, have been mired in the unhappy middle. Spreadsheets and manual processes still abound, with around two thirds of businesses in this cohort relying on them to carry out month-end closes.
Limited data leads equals sub-optimal decision making
It can be to their detriment, as last year’s Covid crisis amply demonstrated. After Australia’s nationwide lockdowns made business as usual an impossibility, organisations which relied on manual processes and legacy, on-premises financial software found maintaining business continuity significantly more challenging than those which had migrated to the cloud and could direct their finance teams to carry on from home.
Meanwhile, businesses that weren’t able to access up-to-the-minute intelligence about their financial positions were at a strategic disadvantage to those whose leaders had their finger on the pulse.
Why? Because responding to altered circumstances and fast changing market conditions means senior executives need to make decisions: quick ones and good ones.
During turbulent times, those decisions can have a material effect on the health and viability of an enterprise but it’s difficult for leaders to know whether they’re making them badly or well, if they’re not armed with all the facts. And when you boil business down to the basics, financial facts are the facts that count.
Up-to-the-minute insights all of the time
Cloud based continuous accounting software provides an affordable answer and a way forward for mid-sized businesses that want to ensure they’re making informed, intelligent choices.
The term ‘continuous accounting’ refers to a methodology for managing the accounting process by distributing workloads evenly across the accounting cycle, rather than having finance teams complete the lion’s share of it at month or period end. It centres around three principles: the automation of repetitive processes; the elimination of bottlenecks at end of period; and the creation of a culture of continuous improvement.
Continuous accounting platforms allow businesses to process transactions and update their accounts in real time. That means they’re able to obtain a detailed, accurate picture of where the enterprise is at – right now, not months earlier when the books were last balanced and the accounts closed off.
Being able to extract up-to-the-minute insights from those up-to-date accounts means leaders are better equipped to make well founded decisions, even when conditions are volatile and circumstances changing fast.
Preparing for a stronger future
Australian businesses that have survived the Covid crisis thus far have cause to congratulate themselves but the challenge is far from over. The pandemic has altered the business landscape and forced thousands of organisations to revise their business models and embrace wholesale digital transformation. Mid-sized enterprises that don’t want to be left behind would do well to join them and the finance department is an excellent place to start.
