Posted by Steve Brooks, Guest Blogger
Start-up companies oftentimes have a distinct advantage over established competitors. They are not held back by legacy investments made in on-premise financial software and have typically invested in flexible, cloud-based solutions from the start or moved on quickly from entry-level accounting systems.
The challenge for established businesses is what to do when they outgrow the systems they started with and how to move on.
Businesses grow through a combination of organic growth and acquisition. Acquisitive companies can inherit a diverse range of back-office solutions. Alternatively, a company might set up a new office in a foreign country and install yet another local accounting system. DWA, the global leader in media planning and communications strategy for technology companies had this issue. After a rapid expansion it had six instances of Sage and one of QuickBooks across eight locations in seven countries.
“If I wanted to look at numbers from Australia, I would email the guy in Australia to get them out of his system stored locally on a computer there,” Tom Braithwaite, Finance Director at DWA, said at the recent SuiteConnect event. “He would email them to me over overnight. If I had questions I would have to wait 24 hours for a response.”
This produced challenges such as the month process end taking 10 days to complete. After DWA replaced all seven applications with a single instance of NetSuite OneWorld, it reduced the month end close to just three days. The finance team is able to spend more time on analytics to help the business rather than just crunching numbers.
The leadership team also has greater visibility into the financial situation of operations in any country from any location.
The challenge of internationalisation
As companies expand internationally their financial compliance becomes even more complex. Consolidation needs to cope with multiple currencies, different charts of accounts and tax requirements.
Financial reporting also becomes more complex. Public companies or those seeking to go public with US operations require GAAP reporting, as well as IFRS or non GAAP.
Just keeping up with the changes in regulations in each country is exhausting. Compliance requirements differ between countries, increasing the risk of error. Ensuring that systems are updated with just the changes in tax rates takes time.
Revenue recognition is also becoming more complex. The spreadsheets companies have historically used for revenue recognition carry a huge risk. The ability to rely on a vendor such as NetSuite, that can deliver the changes required for new regulations in a timely fashion is critical.
Multi-national companies struggle through the process of consolidation with multiple systems. Finance teams often dread the annual effort to get it completed.
The Implementation of NetSuite OneWorld resolved this for DWA.
“There are additional benefits around year end,” Braithwaite said. “We are based in Singapore, with finance headquarters in the UK. We run eight legal entities and seven different currencies, only two in dollars. Doing consolidation was always a bit of a nightmare. We now do it all out of NetSuite.”
Business process stagnation
As companies evolve and grow, the business processes they have used for years may no longer be efficient or even effective. The focus often shifts to revenue generation or cost cutting rather than projects to improve processes.
At DWA there was a manual interface between its sophisticated media booking solution and the back-end systems. Errors occurred that risked customer satisfaction and profits.
With the NetSuite platform, DWA was able to not only customise the solution but take advantage of third-party applications built on the platform. DWA used one such application to help them with the integration to their front end.
“We are now able to do all our media booking end to end seamlessly with any kind of manual input from one to the other,” Braithwaite said. “The systems speak to one another. Purchase orders and sales order go across and invoices are raised. Now we have a single source of truth which is very valuable.”
Having expanded rapidly DWA, like many other companies, found its back-end financial solution did not integrate to its modern operational one. In selecting NetSuite, not only did DWA find an ERP application that met its needs but one that allowed it to extend and integrate it into the in-house media buying platform.
“We have expanded internationally fairly aggressively over the last few years and we will probably do again soon,” Braithwaite said. “Having NetSuite in place and rolling that out to management in a small, getting established office, and having that kind of visibility of what is going on will be very useful.”
Posted on Thu, October 27, 2016
by NetSuite filed under