Move from gut instinct to evidence-based financeby
Mark Moore, finance director at New Statesman Media sets out the benefits of taking a data-driven approach to finance management.
When you’re starting out in business, a lot of your decisions will be based on gut instinct. But as the business grows and your finance function becomes more integral to the business strategy, it’s important to move away from a leadership style based on vague intuition towards a data-driven approach.
Six out of 10 UK startups fail within the first three years – a worrying statistic for the entrepreneurial health of the country. Of those companies that fail, 29% state that running out of cash was the primary reason for the failure. Taking proper control of its finances gives a business the best possible chance to buck this trend, and resulting improvements in the quality of financial data can filter through to better decision-making.
This principle was one of the motivations that New Statesman Media finance director Mark Moore applied when he set out to replace the publisher’s SunSystems accounting system with a cloud-based solution in 2020.
“The automation journey of the finance team has been part of a wider digital transformation of our business from a more traditional publishing business to a digital publisher,” said Moore. “The IT infrastructure of the business completely changed, moving to a cloud-based approach. Our finance transformation needed to take place as part of that.”
NS Media Group’s revenue comes from a wide range of income streams and diverse businesses across 17 entities. As a result, Moore was looking for an all-in-one solution that included consolidation and multi-dimensional analysis features to let his team extract reports looking at revenues and trends by sector, product, distribution channel, brand and department.
Effective consolidation and reporting is also important for group VAT reporting under Making Tax Digital (MTD). Until NS Media implemented AccountsIQ, it was having to rely on Excel bridging software to submit the quarterly updates.
Supporting the key goals of the business
It's a well-established business principle that if the organisation is looking for growth, there are only three meaningful ways to achieve this:
Increase the number of customers
Increase the transaction size
Increase the purchasing frequency.
For the company’s business strategy to make sense, it’s got to apply one of these three methodologies. Whichever route you take, you won’t achieve fast and stable growth without the right data and guidance from the finance function.
For NS Media, Moore explained: “Growth is being delivered in many ways, growing customers by developing new products and increasing subscriptions, increasing transaction size by transforming to a renewals-based offering and investing in leading content.
“Working with an FMS like AccountsIQ enabled us to automate our finance system, achieving efficiencies and making the best use of resources as we move away from processing transactions to supporting business processes.”
Many of the sales and client management processes at NS Media are supported by a Salesforce CRM setup with numerous customisations. Integrating that data into the FMS gives the finance team better control over the accounts receivable process from start to finish.
“When we invoice from Salesforce, 10 minutes later it’s in AccountsIQ and we can start the collection process,” said Moore.
“All of the data in our accounts receivable link up to Chaser [debtor management app], which has automatic routines sending proactive emails to our clients to help us collect the invoice. We’re getting our invoices paid more quickly and saving a lot of time on accounts receivable tasks.”
Other integrations allowed NS Media to roll out an online approvals workflow that improves accountability for managers, while also allowing them to be more efficient by approving expenses on the move as they arise.
“Things are much more efficient and we have more time to do things that provide more added value to the business,” said Moore. “A lot of tasks like VAT and expenses used to be laborious, manual processes. Now they can be done in 5-10 minutes, which has freed up time we’ve been able to use on really valuable activities.”
All of these automated processes link back to the accounts system to give the finance team better visibility and clear audit trails so they can trace the source of variances or other anomalies in the ledgers.
The benefits of being a data-first function
As we have seen, the integrated finance approach offers practical benefits in the form of internal efficiencies and cost savings as well as improved collections and cashflow. Moving from tactical improvements to strategic advances, however, significantly raises the return on investment.
“Features like workflow approval give a lot of control back to the finance team, and effectively we’re able to evolve. Now we have the ability to do more, contribute to strategy objectives and the overall value of the business,” said Moore.
Mark Moore’s experiences at New Statesman Media Group demonstrate how an integrated FMS can help the finance team:
Move from being a transactional function to an analytical function. Instead of overseeing the process of inputting data, finance managers can evolve to become experts at spotting meaningful insights in the data. Rather than simply mining the coal, they start to look for the diamonds it contains.
Analyse, advise and consult with the business. The finance team can become a hugely valuable resource to the executive team, generating tailored reporting, tracking the measures that matter and producing forecasts to inform decision-making.
Drive the thinking, strategy and tactics of the business. Taking emotion out of the decision-making process and using hard data instead will allow your team to flag financial risks before they get dangerous, or highlight new business opportunities with sensible assessments.
Moore commented: “We have more control and confidence in our data. That means we quickly see where we need to grow revenues or control costs. We can now act as a strategic, data-led function, offering more robust and reliable forecasting, looking at our performance and seeing what the drivers of growth are and where the business is going. Our forecasts and modelling are now used by the board to inform strategic decision making, to predict whether the plans will be affordable and profitable for the business.
See how AccountsIQ’s scalable cloud accounting software can help forward-thinking finance teams – bringing you the systems and data required for evidence-based decision-making. Find out more about AccountsIQ.
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