Technology businesses, even quite small ones can be remarkably complex from a billing and contract management perspective. They need to combine billing events from many different sales models, within a continually changing environment and this is tough, no question.
The result is that they tend to have quite large Finance departments as a percentage of the total company size. 10% may be typical, 15% not unknown, 5% would be considered outstanding. Now this blog is not anti-Finance, it is about being able to grow your business without that growth driving more non-reimbursable headcount. In other words, over time you can manage down your overhead staffing percentage. This will dramatically increase your profitability and that has to be good.
So, what if we could take what Finance does and share it around the company, but without any loss in control or accuracy?
What if the operational processes controlled data in such a way that Finance did not need to spend time on data discovery, modelling and checking?
Then Finance could focus on controls and pure financial transaction processing. Not only would they be more effective, your error rate would go down and their roles would be more value-add and less administrative. Plus, your cash flow is likely to improve as they will have more time to spend chasing payments.
Sounds too good to be true? Well, the answer, borrowing from engineering and manufacturing principles, is that you need to build quality into your processes rather than seek to inspect it in at the end.
But how does this work in a finance process?
The answer is straight-through-processing (STP for short) where the business transactions come complete with all the rules Finance needs to invoice and account for them correctly. This is at the core of Harmony. Harmony products from quote to payment contain their business process rules and accounting behaviours built in. In fact, you cannot sell something that Finance needs to investigate and remodel. The practical upshot of this concept is that Finance simply has less investigation to do and less need for spreadsheet-based modelling and analysis. They end up with more time for control and overall business analysis (which Harmony also does for them, but that’s another blog). At our company, the Finance department is 2% of the company size.
If you would like to know more about how HarmonyPSA can help you improve the efficiency of your Finance department, contact us and we will be pleased to explain.
About the Author: Harmony Business Systems Ltd (HBS) is the company behind HarmonyPSA, the most complete cloud PSA software on the market. Developed with functionality to cater for even the most complex needs of MSPs, VARs, ISVs and Professional Services organisations, HarmonyPSA truly is the next generation of PSA systems. HBS is an independent company based in the UK. Follow HarmonyPSA on Twitter