XU Magazine - Issue 14

ApprovalMax and Xero implement paperless accounting and finance decision control

XU_14_Clutter-free
Written by Helmut Heptner

Learn how digital transformation is a people change process

A cloud-based productivity enhancement story by a financial service outsourcing company that went through complete eradication of paper-led inefficiencies and legacy business processes for their clients…

Balanced is a business advisory firm providing financial services, guidance and education for small and medium organisations as well as start-ups. Located in Auckland and Wanaka, New Zealand, it provides a full set of services tailored to SMB’s specific business needs, from accounting and taxes to paperless office and virtual CFO (vCFO).

Balanced focuses on using modern technology and extensive expertise to help business owners focus on their business. Using Balanced services and expert advice, business owners can rest at ease knowing they’re paying less tax and save the most precious resource of all, time. It also allows them to have better insight into their business, for example, by identifying the most profitable customers, understanding cash flow, proactively controlling spending, and helping to prepare business for launch or for sale.

“Paper slows down business”

One of the recurring challenges that Balanced would face as they engaged with new clients were the legacy paper-based ways of running business, including accounting. For example, paper-based invoices would be used to process payments and paper-based signatures would be the way to obtain business approvals – with the finance information being stored in filing cabinets for reporting and taxation purposes.

“Paper slows down business – and makes it expensive to find the information needed,” says Paul Struckman, Director at Balanced. “It takes forever to find pieces of information. And when you do find it, it’s not in the format that you can make decisions on.” As a result, in paper- based accounting, collating and finding information has become a significant part of a person’s working day.

While that is a bad problem to have in a business of any size, inefficiencies imposed by clutter- full processes became critical when trying to move beyond basic in-house bookkeeping, for example, by onboarding accounting and virtual CFO services provided by Balanced.

“If a company was locked into a paper system, it was pretty much impossible to make the numbers work for us to provide services to such a client because of the inefficiency of collating information,” Paul continues. “By the time we located the information and put it in a format that we could reliably review with our client, I found that the costs were far too high.”

Yes, we can help you!

An even greater challenge in overcoming the legacy technology barrier came in handling change, especially the mind-set change.

One of Paul’s prospective clients learnt that the hard way. Two of their key accounting people, a finance manager and an accountant, left the company within a couple of weeks one after the other.

In an effort to help the company during their transition period, Paul conducted a discovery of their accounting processes and data. What yielded as the result was a completely paper-based process with a significant portion of the organisational knowledge tied up to the two finance team members recently gone.

Furthermore, the finance decision control process was reactional, meaning all company expenses were authorised weeks or even months after the money had left the bank. Essentially, the clutter-full accounting and the lack of proper approval automation prohibited timely decision making.

Paul’s reaction was, “Yes, we can help you – but first we need you to go through a process change. We are not going to pay invoices that are not properly authorised, there is just too much risk involved.”

In response, the switch to a clutter-free paperless accounting process with proper decision control was made – practically overnight. Fortunately, the client was already using Xero, a cloud accounting platform. The remaining part was adopting Receipt Bank for digital invoice data capture, and ApprovalMax for multi-step and multi-role approval workflow automation.

“Once the client was onboarded and the paperless process put in place, it was the first time that a Bill was properly authorised before the money left the bank,” says Paul.

Multiplying benefits

On top of the immediate efficiency boost achieved through transitioning to fully digital accounting, Balanced’s clients can reap additional benefits from the technology and the process change.

First, introducing the proper expense authorisation procedure and the timely review and approval by business people significantly reduces financial risks and establishes financial transparency.

“We often find that business owners have been paying expenses for a long time without realising it,” Paul notes. “This is what is so great about Xero and ApprovalMax: you can easily make relevant invoices pop up on the managers’ screen so they can see what they are paying for – and the authorisation details.”

Second, the early engagement of business people in review and approval increases data quality for finance and accounting. Managers can contribute all the relevant details clarifying the business case around the payment, therefore, Bills are submitted for approval with a full and up-to-date business context.

Driving digital transformation can be a complex process, with technology change and a mind- set change being essential for its success.

“A big part of my role has become people change,” says Paul. “Convincing people to change their day-to-day routine, change the way they usually do things is the most challenging task. But the benefits are appreciated almost immediately.”

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About the author

Helmut Heptner

Serving as COO at ApprovalMax and MD of a BPM company, with a proven track record in his former position of COO in a larger international software company, Helmut masters not only theoretical knowledge about effective organisations, but has helped many organisations to transform their daily operations and make them more efficient. Prior to his current roles, he was instrumental for growing the business in Central and Eastern Europe for Acronis, a leading vendor in the Backup and Recovery software market. Helmut holds a Master of Science degree in Electrical Engineering and Applied Informatics.