What are the signs you need a new Finance System?
Updated: Mar 15, 2021
As a practitioner of helping organizations to update and configure better finance systems, it’s always puzzling how finance functions can become so inefficient and transaction-focused. Surely there are things that could have been done along the way to avoid their systems becoming derailed. All businesses have some type of system in place and have hired talented people to help them run their finance function. As Finance professionals we want to be a function that adds significant value to the organization to help make profitable decisions. However, when you have inadequate finance systems in place, you are really on the back foot and being a value-added function is difficult if your function is too transaction focused.
The benefits of a newer system are significantly worth the investment:
· Better connectivity and collaboration
· Faster processing
· Less manual and offline processes
· Better visibility and transparency
· A catalyst for change and business improvement
Here are the top signs that you need to update your current Finance Systems:
1. Time-consuming to answer simple queries – the current system is so slow to do the simplest of functions. When an executive or board member asks for some information slightly different to the standard, the finance team must work in overdrive to work out how to extract this data.
2. Month End takes forever – seems like a never-ending cycle of preparing data and reporting. When the team is just finished with audit queries, they are straight into the month-end. The days to close seem like they have up three-quarters of the month, leaving only a small window of the month for some projects and improvements.
3. Everything ends up back in Excel – the current system is so limited in functionality whether that’s through design or capability. The data always needs to be extracted, reformatted, adjusted and manipulated in a way that suits the requirements of management.
4. Software no longer within support agreement – your current provider no longer supports your current finance package, with no updates available and very few practitioners with the knowledge of how to fix your environment if something breaks.
5. Many manual workarounds – there are tools or processes invented to circumvent the process that should work. The team has come up with ingenious ways to solve the problem, however, this is not part of the design and the system should be able to achieve it if it was set up correctly in the first place.
6. Too many bugs / IT fixes – the system is so broken that there are constant issues with how data is processed and the finance team is constantly on the phone with IT to fix broken data tables. Not advisable!
7. Too slow – this can occur if you’ve simply outgrown your current finance system. What may have been appropriate a few years ago, is no longer suitable with the growth that has occurred, or additional functionality required to run the business.
8. The need to hire more and more people – this is not necessarily a problem if the business is growing the requires more talented people to help support growth. However, when you need to hire more people just to do the same task due to inefficient and broken systems and processes, then you know its time to review things.
9. Technological advancement – at the time of the investment in your current finance system, it may have been completely appropriate at the time. However, technology has shifted and there may be features and functions that are now available such as cloud-based technologies, AI and Machine learning, connectivity / API, etc..
If you ever see any of these signs, it may be time that you need to start considering an investment in your Finance Systems. There is never the best time to do this. However, you can not leave it forever either.
I'd love to hear your experiences feel free to comment below.
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