What to Look for in an IT Finance Solution

In this day of reliance on IT and automated processes, how your business uses the central IT system is vital. There are opportunities for efficiency and accuracy when used well, but it can cause serious blockages if preparation or attention to detail are lacking. 

Information in once (and right) 

It is no longer adequate for information to be corrected (or re-entered) later; systems with a high degree of automation and integration rely on information being correct at the point of initial entry. In some sense, financial reports are a ‘by-product’ of a well-functioning system. When everything is processed and balanced correctly, there is minimal additional work in producing the financial reports.

Consider improving your existing system first 

The task of selecting and implementing a new system should not be regarded lightly. Thorough planning is needed. Where possible, improvements to the way an existing system is used would be preferable to a full new implementation. However, if the existing system is not capable of producing the functionality the business requires, then implementing a new platform will be required.  

Make special consideration for the financial reporting 

 Quality financial reporting should be a key outcome required from the very start of your analysis. While operational and functional requirements are important, having them right will not automatically ensure adequate financial reporting. 

 Financial reports are the ‘convergence point’ of everything that is happening in the business. For example, a blockage in managing inventory or allocating debt payments will create delays in producing financial reports. Being able to produce accurate and timely financial reports is a sign that processes upstream are under control and accurate. 

Ensure ‘drill-down’ capability 

To ensure accuracy of financial reports, a ‘drill-down’ capability is essential to confirm correctness of the detail of transactions that make up the totals. It also enables highlighting and detailing any specific transactions that are outside of acceptable parameters and need to be addressed by management. For example, unacceptably low GP sale transactions. Early-stage identification of patterns and trends is key in this. 

Consider ALL users in the selection/review process 

To achieve team buy-in, ensure that the needs of every user are considered at the planning stage. This includes users at the coal-face, not just at supervisor level. Everyone needs to be able to do their job efficiently and every concern should be taken seriously and worked through. It is common for issues to arise when a system is being used in ‘battle’ that were not experienced during ‘training’. 

 An ERP should be regarded as an investment rather than an expense. When used in conjunction with good financial discipline and accountability, it assists in lifting a business to investment-grade level, as well as making life easier for the owners and all the team.