How timeous business decisions affect the overall performance of a company

by Phillip Clark


Posted on July 26, 2019 at 11:00 AM



The decision-making process can be illustrated as a proposal considered by decision-makers in the context of the organisation and its strategic position. Alternatives, risks and potential outcomes are considered and then a decision is reached. The decision-making process is subject to human error as the decision-makers have personalities, prejudices and a self-interest bias. Importantly, they have different attitudes to and appetites for risk.

All decisions hinge on timing if you spend too little time deciding you may end up with buyer’s remorse, the feeling that you’ve made an uninformed decision. Spend too long making the decision and you may end up convincing yourself that the grass is greener in another pasture. Finding the perfect timing, in general, is hard but even harder in the business sense, hierarchy, differing managerial structures, board approval and proof of concept meetings could push a simple decision into a long drawn out affair which could’ve been circumvented by going through smaller more defined processes. Decision-making ability is reserved for the upper echelon of a business and thus an attempt to affect change from a lower level is extremely tough, but not impossible.

When making a critical business decision there are steps in place that govern how these decisions are implemented. A decision usually follows the hierarchical chain of the company, as can be seen in figure 1. The entry point for providing a solution heavily impacts the ability to affect change in the company. Enter at the wrong level with your idea and you may end up not being able to get a decision out of that firm and entering at a higher level is often far more difficult. One then also needs to look at not ending up in a feedback loop; back and forth email exchanges that ultimately lead nowhere. Effective decision making relies on the managerial processes which a firm has in place and this is dependent on a manager’s ability to:

  • Relay and communicate this information effectively
  • Understanding the relevance to their business
  • Understanding the product that is being implemented
  • How a new system could impact their business with regards to cost vs performance output (trade-offs)
  • Ability to influence the final decision
  • Managing the future performance and risk effectively.
So how do firms make better decisions?

In more and more companies, managerial decisions rely less on a leader’s “gut instinct” and instead on data-based analytics. We are currently witnessing the fourth industrial revolution; firms have an ability to gather extremely detailed data from various sources and use them to determine the right course of action. Part of this trend is due to the widespread diffusion of enterprise information technology such as Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM) systems along with various other software solutions that don’t fall into these categories. These systems capture and process vast quantities of data as part of their regular operations and churn out results. Increasingly these systems are imbued with analytical capabilities, and these capabilities are further extended by Business Intelligence (BI) systems that enable a broader array of data analytic tools to be applied to operational data and Financial reporting software such as Quick Consols that report the final results to management.

What quality and efficient decisions mean for a company?

With the readily accessible information at hand to firms, decisions that affect the performance outcomes of a company can be readily improved. With the increase in the frequency of feedback and the ability to make changes, this should lead to enhanced performance as decision-makers response time greatly increases to environmental changes. Thus, impacting the consequences of their decisions. In theory; more concise information leads to quicker response time, which in turn leads to better, faster implementation thus a quicker turnaround for improved results. A study done on the business practices of listed firms has shown that there is an increase of 5-6% on output and productivity for firms that implement data-driven analytics.

Quick Consols Proven Alternative

Quick Consols offers companies the ability to see a group-wide overview of their company from which the relevant financial decisions can be made in order to trim burgeoning expenditure or reported losses. The ability to view reports group-wide lets you know exactly what is amiss. This tailor-made software solution that can be implemented in your company and with the current timeline of 10 days greatly reducing the time and cost that goes in to implementing a larger outdated system.




Why you still have a finance job

by Steven Auf


Posted on June 21, 2019 at 16:19 PM



Someone once mentioned to me that the only reason you still have a job is that no one has invented a machine to do it yet! We live in an era where things are changing rapidly and where the cost of developing software and building machines and tools (with 3D printers and outsourced manufacturing) is a fraction of what it was 10 and 20 years ago. But practically what does that mean to those of us who are lucky enough to have jobs?

How things are changing

It means we need to look up from our spreadsheets and emails for a minute and look around at how and where things are changing. If the world around us is changing and we remain static we become like the dinosaurs who couldn’t deal with changes to their environment. There are jobs that exist today that didn’t exist 10 years ago and there are jobs that will exist in 10 years time that we haven’t even imagined. Whilst we can’t be expected to shoot for a target that we don’t even know exists it does require us to make a calculated guess as to where things are most likely to go.

Which jobs are at risk

The first jobs in the finance department that have already come under pressure are those that require manual data capturing. Things like processing of sales orders, invoices, bank transactions and time and attendance record are already heavily automated and these systems are becoming standard features in most off the shelf ERP systems. In my prior business we managed to triple sales volumes in three years without hiring one additional resource through the implementation of EDI, let alone the resultant improvements in processing time and customer service. Next to come under pressure will be collection of receivables which currently requires the sending out of statements, invoices and proof of deliveries. With the right OCR (optical character recognition) and integration a business can automate the entire process. Even follow up emails on outstanding debt are now also standard.

Automation is the song being sung by many CEO’s and CFO’s being the future of business. Many businesses seeking ways to improve their process to cut out inefficiencies and increase Return on investments. Although much of the automation song is being sung seems a good concept and not reality. The finance function which reports the financial impact of automation is still operated manually. What is the impact of automating reporting? Simple, accountants will have more time to analyse results, ensure accuracy, and add more value to what direction the business must take.

The consequence of a lack of innovation and automation for the finance function has resulted in terrible financial consequences to many businesses due to incorrect information being reported thus incorrect business decisions being made. Business leaders need to look at investing more in their finance function and avoid unnecessary business failures.

The future and what to do

Future finance and admin departments will be managed on an exception basis with an overall higher level of skill required to run and manage these systems with real time or near real time management of numbers replacing the current monthly reporting cycle. If you’re currently in one of the positions mentioned above its not all doom and gloom. It simply means reskilling or upskilling to keep up with the changes in your environment. Machines and systems are great but they require management and maintenance and will need someone to manage the exceptions. Its no secret that business is becoming more complex. That will require accountants that know how to interpret the complexity and are able to easily package and explain the complexity that’s happening in the numbers to those running the business.

Don’t become a dinosaur

The days of joining a company’s finance department and hitting the keyboard generating a myriad of report for 8 hours are most certainly over. If you want to stay ahead of the curve have a look around and make a change in your skillset before you become like the dinosaurs.




How poor financial reporting can affect a business

by Phillip Clark


Posted on June 05, 2019 at 12:34 PM



In a utopian scenario, all the information available to us would be considered fair and true but that is often not the case. Results can be manipulated, numbers misconstrued, and information hidden in order to sweep small errors and bad decision making under the proverbial rug. Financials aren’t as accurate as they may seem and although there have been many debates on how to regulate how information is shown we are still far away from paradise.

Wrong Reports = Wrong Decisions = Business Failure

There are countless examples of companies who have misrepresented their financials and have gone on to pay the price. Ultimately the shareholders and the people who have invested their hard-earned money have paid the price on the backs of these companies. Call it carelessness, lack of verifiable information, misinterpretation and misrepresentation of data, it has become far harder to look at a set of financials without a certain amount of doubt creeping in.

According to Business Insider South Africa, Tongaat Hullet a sugar giant producer with revenues of over R 15 billion, admitted errors in the financial reports as their asset base was overstated by R4.5 billion. This has resulted in the share price further dropping and the share price is said to have fallen almost 70% since the start of the year 2019.

Tongaat Hullet is an example of many cases that have happened in South Africa and other parts of the world. One can only wonder how many decisions were made by management, shareholders and other stakeholders on an incorrect asset base which affects key management metric ratios such as debt to equity and return on assets. A lot of questions come to mind, for instance how management did not pick up this error if they prepared and reviewed their monthly financial reports correctly?

In 2001 Harvard business review posted an article titled “Tread Lightly Through These Accounting Minefields” in which they help shareholders recognise ways in which high powered executives misrepresent the true values of their companies.

Currently, there are many regulations in place that govern how shareholders are protected; Companies Act, King Code and other regulations in different countries which protects shareholders and the general public from accounting errors and fraud. However, a business should not be dependent on regulation for it to operate, survive and stay ahead of its competitors but have well-entrenched business structures and necessary tools to ensure financial performance is correctly reported and projected.

More Accountants = Improved Financial Reporting??

Reflecting on the current case of Tongaat Hullet one can safely assume there is a large finance team with qualified accountants. The finance team is then audited once a year with a team of auditors who have a large team of qualified accountants and aspiring accountants. But all these qualified and non-qualified accountants could not pick up an error of R4.5 billion! The reasons why the accountants did not detect the error is still under investigation, however, the point is more people focused on finance is not necessarily the answer to improved financial reporting

Automation is the song being sung by many CEO’s and CFO’s being the future of business. Many businesses seeking ways to improve their process to cut out inefficiencies and increase Return on investments. Although much of the automation song is being sung seems a good concept and not reality. The finance function which reports the financial impact of automation is still operated manually. What is the impact of automating reporting? Simple, accountants will have more time to analyse results, ensure accuracy, and add more value to what direction the business must take.

The consequence of a lack of innovation and automation for the finance function has resulted in terrible financial consequences to many businesses due to incorrect information being reported thus incorrect business decisions being made. Business leaders need to look at investing more in their finance function and avoid unnecessary business failures.

Quick Consols Proven Alternative
Quick Consols is the proven alternative to excel spreadsheets and inefficient costly legacy reporting applications. The change to using Quick Consols is easy and will not cost an arm and leg.
Quick Consols simplifies and automates Group and divisional financial consolidation, reporting, analytics and financial analysis for any organisation. Deployed via the cloud or on-premise.



Impact of Digital Revolution on Financial Reporting

by Bright Mhazo


Posted on June 01, 2019 at 9:40 AM



Legacy Solutions No Longer Cutting It

Financial reports represent the trajectory of where the business is going. Although technology has evolved over the years, it seems as if this fourth industrial evolution is yet to reach the Finance function. Finance has been very slow to adopt new enabling technologies in order to drive financial process efficiencies. Finance teams still make use of “stone age” reporting tools such as excel to prepare monthly management reports.

The value lost due to using old manual process in unbelievable such as manually consolidating company financial performance results. There is more value the finance function can add to the company if more time is spent in analysing the financial results, however 90% of the time is spent on preparing these reports in in excel or old financial reporting systems.

Head Office usually wait for subsidiary/ division companies to send through their management packs for Group consolidation purposes and unfortunately at times, the reports contain errors.

Head Office sends the management pack back to the subsidiary for rectification. If the latter is unable to rectify the errors, it automatically becomes the Head Office’s problem

This back-and-forth process results in unnecessary effort, time waste and low ROI for time spent by finance on analysing and giving appropriate financial direction the company should take.

Excel will most likely be part of analysis for the near future however there is a place for Excel and not all financial functions are easily or meant to be performed with Excel. Finance executive need to acknowledge the limitations of manual extraction processes and leverage financial consolidation software.

Automating consolidation functions results in reduced cycle times of discrete tasks, more accurate results at a lower cost, increased ROI time spent on analysis than that of preparing reports and provides management with improved visibility and control, allowing for improved and quality decision-making.

Stop Wasting Recourses

The current processes companies use of manually assembling and reviewing financial reports require both time and money. With the availability of technology to sift through data and crunch the numbers, management is in a better position to perform faster and better analysis. When some time resource is freed up, CFO’s and financial managers can analyse more on the business performance, build strategies to ensure continuous growth of the company, which would support better-informed management decisions. Greater efficiency with higher-quality management decisions is a win for companies and economy as well.

Time for Change

The current technology presents an opportunity for finance teams, provided they embrace these tools. Businesses will still have roles in which insight, transparency, stewardship, and ethical corporate conduct are valued, and strategic finance professionals can fill these roles. Risks remain, but mainly for those who fail to appreciate the new tools and get left behind. Finance professionals must live with this changing, disruptive environment and explore opportunities

Benefits of Automation for financial reporting

  • 1. Improves financial statement accuracy
  • 2. Improves productivity
  • 3. Increases opportunity for higher returns
  • 4. Allows for better risk management
  • 5. Empowers the analysis

Quick Consols Proven Alternative

Quick Consols is the proven alternative to excel spread sheets and inefficient costly legacy reporting applications. The change to using Quick Consols is easy and will not cost an arm and leg.

Quick Consols simplifies Group/ divisional financial consolidation, reporting, analytics and financial analysis for any organisation. Deployed via the cloud or on-premise.




Why consolidating your group’s financials is so critical (and why most groups battle to get it done)

by Steven Auf


Posted on April 01, 2019 at 1:48 PM



Most companies have a fairly good grip on analysing monthly reporting packs of their various businesses. What doesn’t happen quite so regularly and properly is preparation and review of the group’s financial position and performance. After all, the whole point of managing a group of companies is to unlock value in the group and not to simply manage the individual entities.

Most group companies tend to have homogenous entities where stock and other assets can get relatively freely transferred to where they’re needed. Banks also take security on a group basis where possible and institute covenants at an individual and group level. So if you’re not analysing your group numbers you’ve probably got a massive blindspot in your business.

So why not just do it?

Well considering that your average group is probably made up of between 5 and 10 companies, an operation or two in a foreign denominated currency and the possibility of a joint venture or partly held subsidiary and you start getting an idea of how things start getting cumbersome and technically difficult to prepare. Throw in an under resourced accounting department and a really bad tool for financial reporting (think MS Excel here) and you have a complete non starter from a reporting perspective. There are a large number of groups out there that we’ve come across that only report consolidated numbers quarterly or semi annually or just not at all.

Tools currently available are either extremely difficult to implement or cost and arm and a leg. Quick Consols solves both these problems with a fixed monthly subscription per company and an easy to set up interface that doesn’t require a PHD in rocket science. Check it out and try it for free for yourself. www.quickconsols.com

#consolidations #reporting #reportingtool