Cloud-hosted SaaS solutions open the doors to sophisticated tools that many, if not most, businesses could not have accessed in the past.
Today, as the Chief Financial Officer (CFO) role becomes more strategic, there is a growing need to improve the finance organization’s ability to provide information and insight so that companies can increase their agility and competitiveness in their markets. Yet outmoded, disparate or incompatible systems that are dependent on manual processes make it difficult for companies to rise to the challenges of managing and analyzing their financial data.
Having an outdated or non-integrated accounting system often means that a business may be operating at a sub-optimal level. According to Deloitte’s third-quarter 2012 CFO Signals survey, nearly half of CFOs reported that their IT systems do not adapt well to changes in business strategy, tactics and/or scale, and only about 40 percent felt positively about their ability to provide information in ways that reveal relevant business insights and facilitate decision-making.
Today’s sophisticated financial management systems can increase the efficiency and accuracy of accounting, and automate and streamline business processes, thereby reducing time and labor costs while increasing productivity. However, buying the software for a superior financial management system and hosting it in-house is expensive, complex, and time-consuming. While such systems deliver a host of benefits, there are five key ways a cloud-based, SaaS model is addressing needs inherent to the transforming CFO role, while delivering value and positive ROI to the entire organization.
1. Automation of manual business processes
As an organization grows, demand for information grows with it. Bottlenecks become more apparent, and the strains on financial management increase. According to a study of cloud accounting by Vital Analysis, on average eight to ten percent of the financial accounting software market turns over annually. Approximately four percent of the market requires a new solution because the company has experienced extraordinary growth (or in some cases, contraction). The change in business size often requires new solutions to reflect the increased business and functional requirements of the organization.
Taking steps to automate and standardize processes can reduce these ‘growing pains’. SaaS-based financial management solutions automate many business processes and reduce the amount of paper an organization has previously had to manage. Rather than herding documents, the finance department’s operation becomes more about orchestrating workflow. Automation allows the company to benefit from more accurate and consistent processes such as approval hierarchies.
Automation of processes also allows the finance department to collaborate more effectively with internal business leaders by improving data access and providing business units with data analytics tools. This enables improved decision-making and empowers managers and executives outside of the finance and accounting departments to carry out their department-critical operations with timely information and greater efficiency without compromising data integrity.
However, the technology must be intuitive and easy to use in order to facilitate buy-in from senior management, department heads and unit managers. Today’s SaaS-based accounting systems are user friendly and easy to navigate; for example, allowing an invoice to be viewed and approved from a smart phone.
2. Elimination of duplicate entries to prevent errors and increase data accuracy
Ensuring data accuracy is paramount to successful financial management. Manual processes are error-prone, time-consuming and needlessly expensive. For example, an organization that takes data from one system and manually keys it into another is likely to introduce errors. Manual processes offer little protection from fraud and are fraught with compliance risks.
SaaS-based accounting systems contain built-in controls that automate identification of duplicate entries, and can prevent other errors; for example, goods and services that have been purchased or rendered automatically correspond with the invoice received or to the payment made, and disbursement activity properly records within the correct accounting period, etc.
3. Secure user access and controls with streamlined approvals process
Growing companies often benefit from moving to a more decentralized management structure that is supported by automated controls and approval processes. But such business process changes often generate concerns around how much and what type of financial data should be provided to the various stakeholders within the organization.
Confidential or proprietary information in the wrong hands can cause big problems. SaaS-based systems use finely tuned controls and detailed user rules to ensure that personnel have access to only the data authorized and relevant to them. These controls and constraints also assure that the correct rules, hierarchies, and chains of approval are always followed, not only streamlining approval processes but also guaranteeing that overall financial integrity remains intact.
Approval hierarchies provide for appropriate and required separation of requisitioning and approval functions and allow for a secure and streamlined requisition and approval process.
The approval hierarchy is managed through assignment of predetermined maximum requisition limits to approved individuals. For example, only individuals who are part of an approved departmental hierarchy with a specific dollar-requisitioning limit may requisition goods and services for that department. These requisitions may be subject to further review by individuals higher up in the department hierarchy.
4. Highest standards in system and infrastructure security with data backup at a secure, failsafe location
To place sensitive data in a third party’s data center requires a good measure of trust. Most cloud-based, accounting solution providers have strong security measures in place that go well beyond what the average company is capable of or can afford to implement. Multiple studies conclude that cloud computing is just as effective and safe when compared to on-premise solutions.
Ultimately, security is about the quality of management applied to any IT environment. Even when fully embracing cloud computing, an organization still needs a strong internal team to manage the security and compliance requirements together with the cloud service provider(s). Clear strategies, as well as a strong Service Level Agreement (SLA), will ensure that the services implemented will deliver cloud computing functionality that meets the customer’s security requirements and business expectations.
Today, cloud-based accounting solution providers protect the integrity of their customers’ data by minimizing the possibility of data loss, security breaches and external hacking of data. They maintain the secure segregation of each customer’s data from that of other customers and have strong disaster recovery plans that include additional failsafe data centers and real-time automated backup and recovery.
5. 24/7 access for control and collaboration
With an increasingly mobile workforce and customer base, the CFO and other business leaders need to access data from anywhere, at anytime on a range of hand-held devices. CFOs can now access their company financial data at will. Rather than passing accounting files back and forth every time someone needs to update or access them, cloud accounting software makes it easy to provide users with secure access to the accounting system through an Internet browser or remote connection. SaaS-based systems allow for location-independent data access and deliver mobile computing functionality for laptops, smart phones and tablets on a “24/7” basis.
Conclusion
Cloud-hosted SaaS solutions open the doors to sophisticated tools that many, if not most, businesses could not have accessed in the past. No longer merely a back-office enabler, cloud-based SaaS financial management solutions create real value for the entire organization.
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