Below Finance Monthly hears from Adam Rice, VP Product Development, Centage Corporation, who touches on the need to expand budgets and care3fully account for said upgrades.
For many businesses, the third quarter is budget season. It’s a busy time for the finance team, as they meet with department heads and general managers to predict what the coming 18 months will look like for the business. As preoccupied as they are, I think they would be wise to take the time to upgrade to a cloud-based planning platform sooner rather than later. Why? Because in the end they will save themselves time, work more efficiently and achieve better results. Specifically, a cloud-based platform will enable the organization to move to a solid financial plan with a rolling forecast, updated on a monthly basis. And when you think about it, a rolling forecast is far more accurate than a budget created in July 2019 that attempts to paint a picture of what December 2020 will look like.
If changing horses in the middle of the race sounds daunting to you, consider all of the circumstances small to midsize companies face in today’s business environment.
SMBs Need to Step-Up to Global Challenges
SMBs have long been the backbone of the American economy and we count on them for job growth. According to the U.S. Small Business Administration, small businesses employ 58.9 million people, accounting for 47.5% of the country’s total employee workforce.
Technology has fostered competition from all over the globe. Manufacturers are competing with countries where labor costs are low, as are retailers that are now competing head-to-head with ecommerce sites that offer international delivery. For example, the Alibaba Group, which owns AliExpress, earned over $30 billion in sales in a single day in 2018.
This kind of competition means that SMB leadership teams need to make better decisions faster. What is the impact of opening a new sales office in the Northeast, or applying for a loan to expand manufacturing capabilities on the P&L? What happens if we assume 20% sales growth but we only realize 17.5%? Business managers need to see the cause and effects of their decisions on the company’s financial statements - a feat that’s nearly impossible using a spreadsheet.
On the other hand, a cloud-based system allows financial teams to do what-if scenario planning quickly and easily. As with all things cloud-based that include intelligent APIs, it’s simple to connect multiple data sources together and then overlay analytics and data visualization to make smarter decisions.
Streamlined Implementation and Upgrades
SMBs have limited IT resources and they need to be extremely selective as to which platforms to purchase as a result. Investing in a project that ultimately fails can have devastating consequences, potentially threatening a company’s viability.
Cloud-based solutions tackle these challenges in multiple ways. For instance, many offer out-of-the-box workflows for financial reporting, forecasting, scenario validation and so on, which means implementation is streamlined. Upgrades happen automatically, which means IT resources are spared and end users get to automatically take advantage of new features and functionality. This is a critical consideration as many platforms are beginning to add artificial intelligence and machine learning to key tasks, such as compliance.
Scaling is also much easier, as native cloud-based platforms can scale up and down as a business grows or as seasonality affects demand.
Inherent Agility
Cloud-based systems often act like data warehouses, centralizing multiple data sources and tracking a wide variety of KPIs and metrics. This is critical functionality for business managers seeking to connect the dots and assess the cause and effect of their business decisions. And if the data is always on, meaning it’s pushed to the platform automatically, managers have up-to-the-minute insight into the health of the business.
Many platforms come with data visualization tools or dashboards that allow users to slice and dice information in myriad ways. The benefit here is that it allows all managers to view the data in ways that are meaningful to them. For example, the head of sales can monitor the key metrics that they care about with a higher degree of accuracy, and most importantly, drill down into the data to uncover the source of anomalies.
In fact, the data visualization tools allow the financial team to provide data-driven answers to the tough questions that CEOs, boards and leadership teams ask daily.
SMBs are on growth paths; increasing the size of their market share is always a top priority. As the business grows, and as planning becomes more complex, well designed cloud-based platforms can handle the complexity. These platforms let financial teams see into the future, test the impact of multiple scenarios and ultimately make faster decisions with confidence. They’re also far more likely to adapt to evolving business needs and goals. So while it may take a bit of work to transition this budget season, it will be time well spent.
With a lack of time putting pressure on workforce health and productivity, maintaining a healthy work/life balance can be tough.
Jasper Martens, CMO of PensionBee shares with Finance Monthly three top tips on how SMB owners in the financial sector can support their workforce to ease time restraints and overcome a hustle and grind mentality.
1. Quit working the weekends
UK-wide, people are working longer hours and longer weeks, and while three out of five financial sector leaders started their small business for a better work life balance, little over half actually feel like they get it. Almost half of small business owners in the sector say that they work through holidays and their annual leave, more than any other sector.
Finding ways to free up weekends and holidays for the sake of health alone is an admirable goal, but it inevitably conflicts with other business goals that had put pressure on time and deliverables in the first place. Some of our fintech peers hold the belief that people should work seven days a week and increasingly long hours. We’re the opposite – when it comes to hustle and grind, our focus is on looking at the most time effective way to get the job done.
As a small customer-centric business, we do what is necessary to keep our customers happy and find that automating work flow saves a lot of time. By automating parts of the everyday, we’re able to spend on growing the business and improving our service. There’s something to be said about the industry on a whole that the financial sector on average feels more strongly than any other sector that digital transformation has a positive effect on their business.
2. Ditch the time-sinks
Admin is necessary, but often a huge time-sink. How can this be cut down? It’s a question you’ve most probably asked yourself to no avail - but there is a way.
Two thirds of financial sector leaders feel that Cloud based technologies are a necessity when it comes to time management. For us, it’s about automating reoccurring paths and connecting customer touch points. Putting time into understanding, tailoring and using a good CRM to get all the relevant information in the right place, in the right order and accessible to use, will ultimately return more time in the future
As companies grow, processes need to evolve and be flexible to meet new demands. Out-of-date processes only hinder growth and ultimately eat away at time that could be better spent elsewhere.
3. Listen to your team
As an SMB you’re in a great position to address issues of burnout or stress amongst your workforce, it’s a force for good that we can communicate with each employee on their individual needs.
We're tripling our size every year, faster than we anticipated, and with that success comes a need for a lot more thinking about the way we work as a company and especially on how we support our employees. As a small business it is tough because you just need to get the job done, but that mentality can also lead to higher stress levels and presenteeism. We have to pay attention to people, and talk openly about personal and mental health.
Time will always be a limited resource, and the pace of modern business is only likely to increase in the future. Yet, mental health now accounts for over half of all working days lost due to ill health in and is the most prevalent reason for sick days in the UK. Now, more than ever, we need to address the time pressures impacting on employees to provide support and mitigate more damage to employees and small businesses in the financial industry.
Nearly 50% of 2017’s Initial Coin Offerings are currently failing, and one serious factor in this lack of success comes from the lack of trust in a business. Investing in ICOs is risky. Little regulation results in a vulnerability to fraud, and is putting off people from contributing - and rightly so, why would you want to just throw away money?
With that said, ICOs can prove an incredible investment opportunity, with huge potential for growth starting at the pre-sale; and if a potential contributor has trust in a project, there is absolutely no reason for them not to invest.
So how can you earn investors’ trust? This week Tomislav Matic, CEO of Crypto Future, provides Finance Monthly with his top five ways to incite trust in potential investors.
1. Be transparent
One key factor in convincing others of your legitimacy is through being as transparent as possible. Of course, not every detail can be given away, but letting potential contributors understand the inner workings of your company can go a long way to showing them all the work being put into your ICO.
Being transparent develops a unique relationship with investors. Show them you align with legal compliance - you could even go as far as showing off clips of on-site testing; whatever it takes to show the world that you are genuine in your efforts, working hard to make this project a success - it goes much further than you might think.
2. Go social
On average, people spend 116 minutes of their day on social media - just under two hours checking what other people are doing. Only a fool would miss out on this opportunity for both exposure, and a chance to involve future contributors.
Use Facebook, LinkedIn and Twitter - and other social media sites too - to give people regular updates on product details, blog posts, interviews, information; anything you can think of. Frequent updates through a channel that people will be checking regardless go a long way to making investors feel involved in the progression of the project, connected and valued - that extra insight only helps towards bridging that relationship.
3. Introduce your team
By now, contributors feel the platform is safe, they know the inner workings of your product, and they feel involved with the project; it’s time to show them the team behind it. It’s all well and good having a brilliant product, but if you’ve got someone running the ICO who isn’t capable of delivering it, how can an investor trust it?
Roll out the blogs, the interviews, the Q&As, and get their social media accounts active too. Does your CEO have an incredible track record of getting ICOs off the ground? Shout about it. And an inexperienced leadership team isn’t necessarily a bad thing either - you just need to show to contributors why they are in the position they hold.
4. Create an extensive whitepaper
Not everyone will go through the entire whitepaper from front to back, but having a detailed outline of everything to do with your project gives contributors access to any specific information they might need.
Having a strong, comprehensive whitepaper in place allows investors to complete their due diligence at their own leisure. It’s a recurring theme: access to information. The more access, the more allowance you give for trust to blossom.
5. Outlining a clearly defined roadmap
Actions speak louder than words, but if you’re showing future contributors exactly what you’re planning and how you’re going to implement that plan, and then following through on it, there is absolutely no reason for them to believe that you can’t continue in that vein.
Outlining your strategy is a brilliant way of proving that you follow up on promises, and if you can do it before the ICO even starts, even with the smallest steps, investors will be more inclined to put their faith in you once the sale has kicked off.
Building trust is by no means easy, but it is incredibly vital to aiding your ICO’s success. It can without doubt be the difference between an ICO that hits the ground running, and one that flops completely.
The process starts early, and requires a huge amount of time and effort - much like building trust face to face - but the rewards are tremendous.
Budgeting is a highly necessary and mandated task for any business, with an extremely structured process in most cases. But as budgeting expands to include a broader scope within companies, how can we work towards a collaborative budget? Chris Howard, Vice President of Customer Experience, Centage, explains for Finance Monthly.
I’ve yet to speak to anyone involved in the budget modeling process who didn’t wish for an Excel feature that somehow made budget collaboration easier. And I speak to a lot of people.
The folks responsible for creating the ‘master’ budget models, often CFOs, don’t have an easy time of it. They need to gather input from numerous people within their organizations (most of whom have no background in corporate finance) and then validate the data they receive. All too often, they rely on managers to put together entire budgets based on higher level numbers, guidelines and goals they provide.
Once that’s done, they need to piece together a myriad of spreadsheets and apply complex formulas and macros to arrive at projections. This last bit typically occurs late into the night.
But here’s the thing: Excel was never meant to be a collaborative tool. It simply wasn’t designed to farm out files and to collect and manage the input of multiple users. That means even the most advanced power user can’t deliver the level of collaboration finance teams need.
Beyond input consolidation, the CFO’s I speak to say they have an urgent need for automated rigor in their budget models to ensure accuracy. It’s not uncommon for a CFO (or another budget contributor) to find that an error – such as a broken link or formula – which causes a costly displacement in the budget. The result is a lot of discomfort.
Given needs and constraints of budget modeling, what does a truly collaborative budget look like? How does it work? Based on what I’ve heard from CFOs in the mid-market, here’s what I think are the requirements of a collaborative budget model:
Bottom-Up vs. Top-Down Management
Although it’s the finance team’s responsibility to manage a budget, the budget itself belongs to every department within the organization. It’s the CMO who determines how to spend the marketing budget, and the CTO how to best manage IT investments. This means that budgets must be managed from the bottom up, rather than top down, and that buy-in is essential. But when a CFO is forced to control the budget model via a master spreadsheet, those models are, by definition, managed from the top down. This results in a disconnect between the model and the day-to-day activities of an organization. Monitoring performance vs. plan becomes impossible.
Role-Based Security
Budgets are filled with highly sensitive information, personnel data, salaries and the like. A collaborative budget should prevent the wrong users from accessing data that’s not directly related to their roles in the organization. For this reason, a collaborative budget model should have role-based security with an interface that’s customized to the user’s function. What the VP of Marketing sees should be very different from what the CFO sees. Needless to say, this is far outside the realm of Excel’s capabilities.
Financial Integrity Safeguards
In a true bottom-up collaborative budget, most of the contributors will have no background in corporate finance, and little understanding of the differences between a balance sheet, cash flow or P&L statement. How do you ensure that input from these contributors is correctly tied to the right outputs, and is fully compliant with US GAAP accounting rules?
Collaborative budgets need some kind of built-in rigor that protects the financial integrity of the outputs, allowing non-finance team members to enter data without breaking things. In other words, data entered by facilities management is automatically tied to the correct outputs without that user even realizing it.
Self-Serve Reporting
Finally, a collaborative budget must promote self-sufficiency, especially when it comes to reporting. Every CFO I speak to tells me his or her goal is to create reports once – with financial rigor firmly in place to ensure integrity – and then hand over the reins to the CEO or Board. This is the only way a CEO is free to monitor performance vs. plan, cash flow or P&L on a monthly or even a weekly basis on their own, and without the CFO’s constant involvement.
In order to turn over the reins, the entire budget needs access to the data in real-time, otherwise the CFO will be forced to update the reports manually (hardly the level of self-sufficiency they’re looking for).
Why a Truly Collaborative Budget is Worth Working Towards
A truly collaborative budget model will, by definition, require finance departments to jettison their budgeting spreadsheets – a painful exercise given that most of them have been working with Excel since their pre-college days. But the payoff will be huge.
A budget model that combines historical information with real-time data is the only way to spot trends, threats and business opportunities. And it will be “board ready,” meaning it will allow teams to respond with accuracy to the Board of Directors when they ask about ramifications of any number of business changes on the P&L, balance sheet and cash flow statement.
Put another way, it’s time to say goodbye to that monster spreadsheet your team just finished creating. Instead, implement a budget that lets you combine data from multiple sources to present a single version of the truth. You’ll get a living, evolving document that significantly improves the quality of information you deliver throughout the year.
50 of the world’s leading triathletes, including 25 Olympians, will compete for round two of the Super League Triathlon crown on 23rd and 24th September 2017, in Jersey, UK. They will be joined by teams of corporates, including Santander Group, UBS AG, First Names Group, Ravenscroft Group, and others looking to test themselves at the same event as the best triathletes in the world.
The men’s line-up will include Jonny Brownlee from the UK, rivals Javier Gomez Noya and Mario Mola Diaz from Spain, and Richard Murray from South Africa, as well as 20 other leading male triathletes. The women’s racing will see leading Brits including Jodie Stimpson, Lucy Hall and Non Stanford taking on Olympian Nicola Spirig from Switzerland, Olympic bronze medallist Erin Densham from Australia and the current American World Triathlon Series leader Katie Zafares, among many other leading female triathletes.
Expanding upon the Championship format, Super League Jersey will also feature a corporate triathlon event. Companies will be able to enter two Corporate or VIP teams to race in the ‘Corporate Mix’ format, on the same course as the professional athletes. The ‘Corporate Mix’ will allow companies to compete against each other, with the scores being a total of their teams’ sponsored pro athletes and their own team relays.
Super League Triathlon co-founder and Managing Director, Michael Dhulst, commented: “‘Corporate Mix’ partners will gain access to the world’s greatest triathletes, including Jonny Brownlee, and will enjoy unique corporate hospitality opportunities for their clients. Corporates will be able to race in their own teams with two of the world’s best triathletes, with corporate branding on the front of the race uniforms.”
The inaugural event in Australia gained world-wide exposure, reaching 388 million households on television, as well as nearly ten million video views and impressions on social media. As a result of this, in excess of five million pounds’ worth of media value was delivered to sponsors across live, packaged and digital content.
Super League Triathlon’s ground-breaking television and digital coverage will be even better at Super League Jersey, as they partner with leading sport and entertainment agency Lagardère. All racing will be broadcast live with programming distributed across international broadcast partners and digital channels making it easy for fans in any time zone to view programming live or on demand.
The continued attractiveness of Super League Triathlon was again demonstrated recently by the launch coverage of this year’s Jersey event, which reached almost 120 million people last month.
Susan Clark, Head of Marketing at Santander International commented: "Santander International are delighted to be involved with Super League Triathlon and look forward to welcoming everyone to Jersey in September.”
Andy Ruddy, Financial Director at global trust and corporate services provider First Names Group, commented: "It is fantastic that the world’s best triathletes are coming to Jersey to compete in an event of this calibre. First Names Group are thrilled to partner the highest profile event the Island has ever hosted and look forward to giving some of our ‘First Names’ the opportunity to compete in the Super League ‘Corporate Mix’ Cup which will be an incredible experience for all involved."
Haydn Taylor, Managing Director of Ravenscroft Group’s Jersey offices said: “Ravenscroft is a significant sponsor of sport in the Channel Islands and we are proud to support some of the islands’ successful athletes including triathletes Jack Kennedy, Andrea Nightingale and Josh Lewis. We recognise talent, within the wider community and in our own teams, and are committed to nurturing it. The Super League Triathlon is a huge event for Jersey and we look forward to playing a part in showcasing the island to a global audience through the extensive media coverage the weekend will attract.”
Corporate Super League Triathlon partners have the unique opportunity to reward employees, excite partners and attract new business opportunities. Spectator travel packages will also soon be announced via Super League Jersey’s travel partner, Nirvana Europe.
