05/27/2023 | Press release | Distributed by Public on 05/27/2023 06:25
Can bettering the efficiency of the Finance team help improve working capital? Does a cost reduction from easier audits help a company better manage its assets?
Consider the value of a speedier close. Closing the books faster gives the company greater visibility into its financial health and how much cash is available. Streamlined consolidations can help improve the working capital ratio, and a company can then adjust its inventory turns, fill rates, entity balances and boost sales. A more efficient audit process cuts costs and those dollars can be reinvested into the business.
What's the real value of improved Finance team efficiency and audit reporting? In its recent report The Total Economic Impact™ of Sage Intacct, Forrester quantified the impact of Sage Intacct on Finance team efficiency and costs in audit reporting. Total Economic Impact is a methodology developed by Forrester Research that enhances a company's technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Let's walk through the methodology it used to produce a real dollar figure. Forrester interviewed four companies that switched from other systems to Sage Intacct. For their study, Forrester aggregated the interviewees' experiences and combined the results into a single composite organization, a technology services company with global operations and headquarters in North America. The composite has 100 employees, generates $30 million in annual revenue and grows 20% annually via acquisitions during the three-year TEI analysis period.
The four interviewed organizations said their accounting and financial systems were isolated, complex and problematic prior to deploying Sage Intacct. The financial processes resided across multiple platforms, such as enterprise legacy systems including Oracle NetSuite, bookkeeping software including QuickBooks, spreadsheets and other applications.
Lacking system consolidation and automation, the organizations used drawn-out manual processes to fill data gaps, often requiring additional labor to perform maintenance tasks, such as copying the data in prior legacy and third-party software solutions, or tracking contracts and invoices in individual spreadsheets.
After deploying Sage Intacct, the interviewees acquired visibility into their organizations' financial performance and had confidence in their numbers due to the platform's real-time data. They gained financial insights and the ability to analyze the data, drill down on numbers, and isolate any issues with a particular number, which they could not do in their previous environments.
With this, Forrester calculated a $302,400 total three-year margin benefit gained due to improved Finance team efficiency and cost savings in audit reporting, with a present value of $249,658. Let's look at this a bit closer.
The interviewees found their prior systems were inadequate to the point that they were unable to take a contract from quote to cash, get invoices out the door in a timely manner, and close the books within a reasonable timeframe.
Due to the complexity and problematic nature of this process, they required extra accounting staff to meet their audit requirements. Furthermore, the resulting consolidated data revealed significant gaps, leading to extensive, drawn-out and costly audits.
The interviewees reported that with Sage Intacct:
The composite utilizes an external accounting company to conduct an audit on an annual basis.
The audit process time and efficiency savings will depend on:
To factor in these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year risk-adjusted total present value of $250,000. The calculations assume a $120 hourly rate for a fully burdened employee in the Finance department. As one of the interviewee's noted, "Within two years, we went from a 31- to a five-day close, and our audit was a nonevent. We just let the auditors go into the system and audit the system, and there was minimal impact on my team." The interviewee is a CFO at a marketing technology company. Another
said, "That's why you buy a system like this to enable you to operate your business and anticipate your needs from a financing standpoint."
As well, Forrester found the value of Sage Intacct's flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Sage Intacct and later realize additional uses and business opportunities, including:
If you'd like more information on The Total Economic Impact™ of Sage Intacct from Forrester, I invite you to follow this link where the analysts not only explore the impact of improved Finance team efficiency and cost savings in audit reporting but also examine the impacts of:
These combined benefits add up to $2.1 million and a return on investment of 441%. Those are real dollars that can help your company grow and achieve better results.