Small and medium enterprises (SMEs) have been surprisingly resistant to adopting new accounting technology—and this reluctance has come at a cost.
A recent survey of accounting and finance professionals around the world found that the majority of companies had not implemented any automation technology to ease their workload, with only a minority employing accounts payable automation (30%) and robotic process automation (12%).
What’s more, a significant percentage of responding companies (33%) were still using predominantly paper-based processes!
Given the disruptions of the last year, adopting time-saving automation and cloud-based technology should no longer be a “nice-to-have” for SMEs. Cloud-based technology has not only sped up work and freed up people from drudgery, it’s given decision-makers more powerful tools to derive actionable insights from data. With this capacity in hand, SMEs can make smart decisions on a dime, such as making budget cuts, reallocating limited resources, or reinvesting for growth.
Our own clients have discovered the power of insight for themselves. Let’s find out how they’ve parsed useful insights from their data using powerful cloud-based tools, all to gain a competitive advantage in these disruptive times.
From gut instinct to data-driven decisions
Last year, The Refinery’s Colin Chen went viral with his analysis of online delivery platforms’ business models, and their hidden costs to both customers and restaurants. His review of the available data revealed that delivery apps sometimes collect as much as 40% commission on certain transactions.
Colin’s post spread quickly because it challenged a common decision most of us make (quite literally) from the gut.
We believe our online orders are helping restaurants out, but using certain delivery platforms can actually cut deeper into those restaurants’ already slim margins.
The uproar also moved Colin into action: he helped organise a not-for-profit food delivery platform for restaurants in Jalan Besar that ensured fairer returns for both restaurants and delivery personnel, while still keeping prices low for patrons.
We’re proud of Colin (not just because he’s a loyal Harvest Accounting client) but also because his actions show what data-driven decision-making is all about: analysing data, identifying crisis/opportunity areas based on the evidence, and making decisions that create beneficial outcomes for all parties involved. (Except maybe for the delivery platforms.)
But first you need to make sense of the data, just as Colin’s viral post did. An estimated 60% to 73% of all data in an enterprise remain unused for analytics purposes, mainly because many of these companies do not have the proper tools to organise and visualise their data sets.
Today’s cloud-based technology can make short work of that “unusable” data. Apps like Spotlight Reporting link with cloud-based accounting platform Xero to provide a flexible, user-friendly way to parse and visualise your financial data.
SMEs can use Spotlight’s suite of tools to draw clear, actionable insights from their data: they can generate management reports, customisable dashboards, three-way forecasting, and franchise reporting that visualises the data in the format that works best for each business.
Sometimes, you just need to visualise the data properly—once done, the recommended action becomes blindingly obvious!
From slow deliberation to timely decisions
Clean energy company Green Li-Ion is pioneering a machine that could recycle lithium-ion batteries, with its first model targeted for completion by the beginning of 2022. When they needed to present their most up-to-date financials to potential investors, Harvest stepped in to help.
Harvest Accounting knew quick turnaround was essential on this project; luckily we’d already migrated their data to Xero, a cloud-based accounting platform. From here, it was a snap to generate the reports they needed, based on the data they’d been collecting from Day One with us.
Specifically, Green Li-Ion used the financial information recorded in Xero to budget for the next year, with the aim of identifying the burn rate and duration that could be sustained by their investors’ share capital.
As timelines get more and more compressed, SMEs must find ways to quickly bridge the duration between collecting data and finding reliable, actionable insights.
This “time to insight” factor might be prolonged by large data sets and inefficient tools for analysis: by the time you’ve reached a decision point based on the data, an opportunity window may already have closed, or other factors may have made the entire exercise irrelevant.
Cloud-based platforms like Xero can improve “time to insight” significantly for SMEs; reducing turnaround time for processing information to hours instead of weeks, and allowing timely evidence-based decision-making.
For instance, plug-ins like Fathom can track and visualise key business metrics using real-time financial data from Xero. The app can quickly generate insightful and engaging management reports & dashboards that bring deeper insights to light, enabling better business decisions.
You can even use Fathom’s three-way forecasts for long-term planning up to three years in the future. Change variables within the main forecast to explore different Scenarios; and use Microforecasts to model best- and worst-case outcomes.
From boredom to higher-value work
When content marketing agency With Content turned to Harvest Accounting, its numbers person was deep in the weeds.
In the bad old days, “we managed our finances using Google Sheets,” explains Jan Chiang, With Content operations lead. “We were keying in client invoice values, expenses, and creating formulas manually, every single day.”
With so much on their plate, Jan and her team had very little time to act on long-term agenda items, like managing client relationships and planning for the future. Who has time for that, when you’re spending the better part of the day pasting into cells on spreadsheets?
We worked with With Content to migrate their books to Xero, and helped automate what used to be repeatable manual procedures with high manual error rates.
“Since making the switch to Xero, we no longer have to do any of that because they are automatically recorded and tabulated based on the invoices and bills created,” Jan tells us.
“Harvest Accounting simplifies the process further by setting up templates, organising our financial information, and compiling monthly reports.”
Many of our clients share the same story as With Content’s: the systems we help put in place free their staff to engage in higher-value work within the company. They’re no longer hacking away at spreadsheets; they’re doing more problem-solving work, identifying and acting on strategic insights that no algorithm can touch.
And by eliminating boring, repetitive tasks, cloud-based systems like Xero can actually improve morale and help stabilise turnover rates.
Just ask Jan Chiang: “With all that time freed from manual accounting, we are able to shift that time and effort into prospecting and sales closing, leading to actual growth in revenue,” she tells us.
“We were also freed to look more broadly at our financial situation and strategise for long-term growth.”
Bridge the gap between data and insight
The companies that work with Harvest Accounting usually come to us for help with a specific problem, or to meet particular KPIs. Only later do they discover the extra advantages provided by our digital tools: the ability to generate insights from their data sets, helping them arrive at quick, evidence-based decisions.
We’d like to help you bridge the gap between data and actionable insight. We can begin by automating all of your most tedious processes through our cloud software, Xero—then initiate a continuing conversation about the ways we can help improve efficiency, reduce repetitive labour and improve time-to-insight for your SME.
If that’s the partnership you need, we’re always ready to talk. Get in touch with us here.