Automating your back-office systems can help to offset the negative effects of the economic downturn.
Recent news headlines haven’t been good for today’s tech workers. In January 2023, technology companies laid off more employees than in any other month since the pandemic started*. This means that today’s companies must do more with less, i.e., less of their most critical resource: people. So either the people who are left have to do more work, or some work just doesn’t get done. And in the accounting and finance world, this can be a dangerous preposition. Regulatory compliance, for example, mandates that many organizational processes must be done – or the company can face stiff penalties.
The reality of the situation may seem difficult – and it is – but it also represents an opportunity: implement automation technology and then let the technology do the work. Or at least help do the work. In my world of finance and accounting that means utilizing back-office automation technologies like NetSuite, FloQast, Expensify and others. In many cases, finance and accounting tasks performed by staff accountants can be automated, enabling one employee to essentially do the work of two, and sometimes more. I’ve seen it happen hundreds of times in my career.
NetSuite is just one of many automation software solutions out there, but to me, it is the most important one to implement for your company, and should be at the top of your digital transformation checklist. For example, NetSuite can automate your billing and invoicing processes by using an automated email invoice delivery process, and one that also includes a portal for your customers to easily know the status of their account.
Another example is that NetSuite can automate your procurement process. You can do this by implementing workflows with exception notifications along the entire procure to pay lifecycle. Both of these processes are often done manually; however automating means that they are done quickly and with little to no human intervention.
Nothing against humans, but automation does these activities with not only less people, but also with more accuracy and efficiency. And this is across the entire organization, not just in finance and accounting, because your back-office system impacts everyone.
Automating processes to be done correctly means that they will always be performed correctly. This is especially important with new compliance standards such as revenue recognition regulations, ASC 605 and 606, lease accounting, ASC 842, and others.
ASC 606 mandates that sales orders match invoicing. This can be an arduous, time-consuming process that’s prone to errors. However if the process is automated, as in the Order-to-Cash process below, then there will be no issues. And trust me, you don’t want issues.
Back-office automation example: NetSuite automates all aspects of the order-to-cash process, including invoicing.
Accurate, timely reporting is also critical, especially for companies with investors, or companies looking for additional funding, and so on. By automating reports, i.e., setting them up correctly the first time using a platform like NetSuite, will give you and your stakeholders greater visibility into your financial status, KPIs, point-in-time data snapshots, and other metrics. SuiteAnalytics is an amazing tool for this and I highly recommend it to my clients.
The month-end close can evoke fear and panic from the most stoic of accounting professionals. And if there’s even less of you to do the work, what do you do? (Hint: The answer is “automate.”) If you have NetSuite, you know that it has some nominal month-end close automation features, and it does an okay job. But, in my opinion, if you want the very best month-end close automation, you need to integrate the FloQast close management software into your NetSuite system. For example, FloQast features an auto-reconciliation that enhances NetSuite’s bank and other balance sheet reconciliation processes, improving accuracy and efficacy – and saving precious time! I highly recommend this product.
Another area to automate is expense management. As most of us in accounting know, getting employees to submit expense reports is a very time-consuming task. Accounting departments can spend hours – days even – pestering employees to turn in their expense reports, or getting them to correct errors on ones that they did turn in! Automating the process saves time for both the employee and the accounting department. So for this I recommend Expensify, a mature, automated expense reimbursement software. One of its key strengths is its sophisticated integration capabilities. It can basically talk to any other software product that you have, including QuickBooks, NetSuite, and so on.
BTW, if your company is truly serious about expense and spend management, you really need to look at Expensify, one of the few – if not the only – companies who do both. And they do a great job at it.
While the recent layoffs and bad economic news are unpleasant, use them as a reminder to stop sawing so hard and sharpen your saw! At a minimum, automate your back-office systems. When you do, you will come out of this downturn better, faster, more accurate, and ready for the inevitable upturn, which, if you’re not prepared for, can be even worse than the downturn!
If you’d like to know more, reach out to me on LinkedIn or at kimberly@finopsadvisory.com. Happy to do a free half-hour consultation to see if NetSuite automation can help you optimize your back-office operations and mitigate the impact of the current economic situation.
*https://www.computerworld.com/article/3685936/tech-layoffs-in-2023-a-timeline.html