Article credit: Sage 

With South Africa complying to lockdown requirements from the government, businesses continue to face challenges.

Lord Sorrell, founder of advertising agency WPP and once CFO for Saatchi & Saatchi, says this about coronavirus: “It’s not like the dot-com bust, it’s not like 9/11, it’s not like the great financial crisis; it’s almost like a war.”

As the CFO, in the combat against coronavirus, you’re playing an important role.

You may be fortunate to be in an industry that’s experiencing high growth during these pandemic times. Lockdowns and working from home have resulted in a boom in sectors that provide products and services such as DIY and home entertainment.

Driving digital transformation

Businesses and the way they operate are undergoing a process of evolution. Customers and employees are changing and have access to a plethora of business tools that weren’t available before.

Who is driving this digital transformation? Well, according to our recent research, it’s you, the CFO.

CFOs help to shape and drive business direction and strategy. You’re more aligned with managing directors and CEOs – you don’t just crunch the numbers. You’re now required to provide up-to-date information, financial analysis and forecasting at rapid speeds

Today, the financial profession plays a key role in their organisation’s digital strategy in medium businesses, with 9 in 10 financial decision-makers doing precisely that. Meanwhile, 15% say they are fully responsible for digital transformation.

Currently, it’s not only about looking backwards into the rear-view mirror and analysing past performance. It’s about becoming a future CFO and looking forwards.

Three things to change within the finance function

When it comes to moving with the times, digitalisation is critical, with data changing the dynamics of decision making.

Technology and tools are now available to automate your financial processes. You can add the ‘why’ to what happened, using data for strategic insight.

It’s a new era where advanced technology such as artificial intelligence and machine learning are finally becoming genuine options for your business.

Here are three things to keep your finance team moving in the right direction.

1. Move from spreadsheets to software

Spreadsheets have associations with finance – think of the CFO stereotype burning the midnight oil, buried deep into the intricacies of Excel.

Today, you don’t have the time to spend hours interpreting data to create meaningful charts and graphs. And you certainly don’t want to deal with the frustrations of tying the data you have in spreadsheets together.

The right financial software can automate these processes, saving you hours in building the reports you need to present to the business.

It provides the data visibility that will help you add value to business strategy and set a suitable course in the future.

You’ll find excellent value in business intelligence, in the form of insightful dashboards and reports you can auto-generate.

2. Implement automation

Digitalisation holds great promise, but it’s no good if you spend your time collecting and preparing data, rather than analysing it. We’ve found 70% of CFOs agree that administration harms team productivity.

Your financial team’s strategic responsibilities mean it’s essential you give the grunt work to machines.

You can automate menial tasks that involve data entry such as invoice-chasing, payroll and expense management, freeing you up to make smart decisions quickly that can lead to benefits for the business.

3. Invest in financial technology

Businesses are already well aware of the impact financial technology has on improving productivity – more than 80% believes it plays a crucial role in tomorrow’s finance function.

Business leaders are aware of the benefits through centralisation with increased cost efficiencies, flexibility, integration and security. So, it’s no wonder that it can empower business.

And think about where can you be most effective. By enabling a connected operating environment that provides greater automation and advances in real-time insights, your business can truly prosper.

Take the right steps to implement change

Having the right technology is all well and good. But before you rush in and implement it, you need to understand whether your team is culturally ready for automation and other cloud technologies.

According to our research, it shouldn’t be a huge problem – 82% of financial decision-makers are already comfortable with using automation for daily accounting tasks.

However, there will be challenges.

Our research revealed 27% of financial decision-makers didn’t think their business was culturally ready for more automation.

Even though you may feel you understand the value of disruptive technologies, other employees and even those on the board may not feel that way.

Start by involving key players within the business in detailing a new automation strategy, so all parties can agree on what you can or should automate.

Take them through the process, so the team are developing and upskilling together.

Indeed, 73% of financial decision-makers believe the introduction of new technology needs a detailed implementation and roll-out plan to ensure it carefully aligns with the culture of an organisation.

The reluctance to further adopt technology may be down to more than just culture.

Amid the growing use of technology within businesses, your team may be worried about the extent to which roles will be automated in the future.

For companies to get the most from technology, there needs to be an alignment between strategy and the culture and reassurance that roles won’t be lost but will instead change focus towards positions that add move value to the business.

Final thoughts

Shaping the strategy is akin to shaping the business, and you are the visionary. You’re responsible for predicting the direction of the company, uncovering hidden opportunities and closing gaps within an organisation that is increasingly data and insights-driven.

As such, it’s worth making investments in digital platforms, tools and systems today so your business can prosper both now and in the future.

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Article credit: Sage 

Artificial intelligence (AI) and automation have taken the accounting profession to a point of pivotal change, and it’s about to transform the way that accountants operate.

AI is already great at automating repetitive accountancy tasks, which improves accuracy and productivity, and helps firms to discover hidden insights and trends that affect their clients’ businesses. It can automatically upload documents, understand entries, and classify them using the right accounting codes.

This has enabled accountants to do more with fewer resources and has freed up time and energy for creativity when it comes to analysing and interpreting data to extract real value for clients.

Many professionals are excited by the benefits that AI can offer. According to our Practice of Now report, the majority of South African respondents (82%) agreed that they need to increase the pace of technology adoption to stay competitive.

Now, as advances in AI and machine learning (ML) pick up the pace, three additional benefits have emerged: invisible accounting, continuous auditing, and dynamic insights.

1. Invisible accounting

At the beginning of 2020, over half (54%) of South African accountants were moving away from traditional service models and were reinventing their core technologies, recruitment approaches, and skillsets to offer customers an end-to-end consulting service.

They were able to do this because AI had eliminated repetitive tasks from the daily workload and increased the amount of readily available data and, therefore, intelligence to understand the current health and direction of their clients’ businesses.

2. Continuous auditing

 Nearly all South African accountants (90%) say that the ongoing effects of technology advancement and digitisation are forcing them to move faster and invest more to keep pace with the market.

Artificial intelligence can help accounting firms to build trust through better financial protection and controls.

As the volume of online transactional data increases, so does the potential for financial fraud, manual accounting errors, and dishonest payments. This has made compliance a lot more complex. But AI can review the data at speed.

It can detect anomalies like duplicate invoices, determine links between seemingly normal (but not) payments, and assign expenses to the correct categories, so the business doesn’t pay out for items it shouldn’t.

Automated anti-fraud and finance management systems help practices to significantly improve compliance procedures. In implementing predictive, strategic services to protect their own and their clients’ finances, they’ll also be able to pick up on potential issues before they arise.

What’s more, AI lets accountants capture business activity in real-time, perform continuous reconciliation, and make adjustments such as accruals throughout the month, which reduces the reporting burden at the end of the financial period.

3. Dynamic insights

 Two-thirds (65%) of South African accountants said that investing in technology had enabled them to provide a faster service, which positively impacts customer relationships, and nearly a third (29%) have invested in emerging technology in varying degrees.

AI’s ability to analyse large quantities of data at speed and at scale allows it to deliver actionable insights in real-time.

In pulling data from customer demographics, past transactional data, and external sources, AI helps accountants to optimise their workflows, make better business decisions, and puts them in a position where they’re looking forwards with clarity, rather than backwards with obscurity.

For example, by using data to perform cash flow forecasting, the business can predict when it will run out of money and act before that happens. And, by uncovering patterns in customer behaviour before they churned, AI can help businesses to understand why customers leave and how they can improve their retention strategies.

This means that accountants can help clients to respond to financial challenges before they become acute, by adjusting spending or processes as required. And, as AI advances, accountants will soon be able to provide predictive consultancy beyond classic financial planning to incorporate other areas of the business.

Same, but different

 The accounting profession is evolving and becoming more sophisticated. While the rules of finance remain the same, the rules of how the work is done are shifting.

AI can speed up the profession from a traditional “bookkeeping” function to delivering dynamic insights that can drive strategic decisions and transform accountants from number-crunchers into true changemakers.

Article credit: Sage 

Article credit: Sage 

Last year, South Africans spent almost R2.9 billion on Black Friday – almost 16% more than in 2017. Even more remarkable is that sales in South Africa were 1952% higher on Black Friday than on any other day.

The American shopping tradition grows year-on-year in South Africa, with this year expected to be the biggest yet. And, since Black Friday falls after payday – on 29 November – consumers will likely have more disposable income.

Here are some more interesting stats from last year:

• Consumers bought an average of 4.5 products,
• The peak shopping time was between 8 am and 11 am, and
• South Africans spent around R1700 each.

So what does this mean for your small business? Yes, it’s an opportunity to increase sales, but small businesses have traditionally struggled to compete with bigger retailers: while large retailers reported record sales last year, small businesses reported a 10% drop in sales revenue and a 2% drop in sales volume, even though they offered more and larger discounts.

Rather than trying to keep up, why not approach Black Friday as an opportunity to grow your customer base and prove your loyalty to your existing customers?

As a small and medium business owner, you can stay competitive this Black Friday by ensuring a seamless customer experience, testing your technology to handle higher online and in-store sales volumes and foot traffic, and letting consumers know about your business and what you offer. Get these elements right and you could boost your customer base significantly, which should be the ultimate goal of Black Friday.

To prepare your business for the big day, ask – and answer – these three questions:

1. Should you try to compete with the behemoths?

Consumer shopping habits have changed. With Black Friday happening a month before Christmas, many consumers buy gifts and holiday supplies in November, which means they have little disposable income to spend on December and January sales.

You might feel like you have to go toe-to-toe with the big retailers by offering the same – or bigger – discounts. The reality is that you likely don’t have the same inventory levels, buying power, and budgets as larger retailers. But with some smart marketing tactics and by focusing on the customer experience above all else, you can secure a customer for life, which is worth far more than a once-off Black Friday sale.

2. Can your technology cope?

Every year, videos of in-store Black Friday chaos do the rounds. To avoid the pushing, shoving, and altercations, many consumers choose to shop online from the quiet of their living rooms… until a website crashes or they miss out on deals because of limited online stock and long virtual queues.

While large businesses can invest in back-up technology and server capacity and hire more customer support personnel, many small businesses don’t have the flexibility to scale their technology on demand.

But there are other things you can do to manage and stagger the increased traffic to your site or store, to ensure the shopping experience is as smooth as possible. Here are a few ideas:

• Encourage your customers to create wish-lists before Black Friday. When something on their list goes on sale, send them an email or notification, with a direct link to the product.
• Schedule deals throughout the day rather than putting all your sale items up at once. Remember the peak shopping times of 8 am to 11 am.
• Use countdown clocks to show how many units of an item are still available. This creates a sense of urgency and encourages people to purchase faster.
• Run load tests on your site beforehand and identify pages that can be compressed to reduce loading times.
• Automate as much as possible, from invoice generation to payment and delivery, so you’ll have more time to focus on your customers.

3. How will you handle impatient customers?

Amid the excitement of bagging a great deal, people can become impatient and irrational on Black Friday. Most people have an idea of what they want, which means they expect a seamless process that allows them to find it, pay for it, and move on to the next item on their list. Nothing should hamper this: not your technology, processes, or customer service.

When customers have a good overall experience, they’ll tell their friends and family – and word-of-mouth marketing is a great way to cut through the Black Friday noise caused by every business punting every offer. Get the experience wrong, though, and consumers will not hesitate to name, shame, and drive business away.

Avoid this by making dealing with you as pleasant as possible. Offer exclusive deals to your loyal customers and make sure that your delivery partner can keep up with the increased demand. Simplify your processes and try to put a personal touch on the day. You might not be rewarded immediately, but customers will remember the gesture and give you repeat business throughout the year – and that’s the best Black Friday deal your business could hope for.

Get Sage 200 Evolution today. With a real-time overview of your inventory and sales, as well as insights into your past performance and future forecasts, you can save time and money, and handle whatever Black Friday throws at you.