Finance And Sales: A Match (Finally!) Made In The Cloud

It’s time to break the old adage that finance and sales cannot get along. Over the years, the relationship between sales and finance has been fraught with friction created by what appears to be conflicting goals. Sales people are laser focused on winning new customers, and are trained to do whatever it takes to close a deal.

Compare that to the finance department, who is tasked with putting controls in place and timely payments occur to keep the company awash in cash. This Yin and Yang situation is further aggravated by the fact that most companies utilise entirely different business applications to run the respective departments for Customer Relationship Management (CRM) and Accounting.

The system barriers further divide the teams and creates the dreaded “multiple version of the truth” problem. Unfortunately, the first person to witness the departmental divide is the customer, dealing with two very different entities.

How can we bridge the divide amongst teams, view the customer holistically and ensure the customer perceives the organisation as a single, cohesive company? The answer may be clear: centralise information and improve communication. However, achieving that still stumps many companies.

Most organisations rely on multiple systems for the Order to Cash – or what we like to call Opportunity to Cash – process. This typically includes on-premises based receivables and General Ledger systems on one end, bookended by emerging cloud-based CRM systems from companies such as salesforce.com on the other end.

In no man’s in the middle, we usually see an unhealthy dose of spreadsheets and custom applications to bridge the gaps and to create orders and invoices. These fragmented systems and processes introduce manual steps, which snowball into unnecessary errors and exacerbate the divide between sales and finance. A high rate of errors reduces customer satisfaction; delays invoice generation and causes more billing re-work, which all leads to increased DSO; and the need for more resources, particularly if invoice volumes grow.

Research from Aberdeen, “The Order-to-Cash Cycle: Enhancing Performance with Process Automation,” sheds light on a better way to operate. The research shows that best-in-class companies are driving towards 100% electronic delivery and improving process automation by:

  • centralising customer data to consistently and predictably manage knowledge;
  • integrating billing and collections with order entry and credit to eliminate duplicate data entry; and
  • creating real-time visibility into their current state of affairs.

According to Scott Pezza, research analyst for Aberdeen’s Financial Management & GRC Group, “communication, between departments and with your customers, is the key to efficiency and visibility into cash flows.”

The path to get there is the cloud

Sales and finance need a new way to work together, especially in the age of virtual business models where workers are geographically distributed. Cloud computing platforms, like Salesforce’s proven Force.com, offer companies a means to enable a single, integrated system to unite accounting, billing, sales, service and finance no matter where employees reside and, increasingly, no matter what device (PC, iPhone or iPad) they are using.

The opportunity to cash process can be conducted in one system, with no re-keying and without fancy spreadsheet manipulations. With one set of data, the cloud provides a 360 degree view of customer accounts, with all relevant transactions – opportunity/order, , invoicing, payments and credit notes – seamlessly combined.

The cloud is also bringing social media capabilities to finance departments, transforming how they collaborate inside and outside their department – even with the sales department. One great example is Salesforce Chatter, a collaborative tool that creates a tie between all your people and the information in your cloud based systems. While you can follow people just like Facebook, you can also follow accounts and transactions.

For instance, the receivables, sales and services team can collaborate on solving a customer issue, such as a late payment by creating a Chatter stream or thread on the collection effort. The stream is attached directly to the account along with sales, services, invoicing and payment history, providing one location for all the hard and soft communications surrounding a customer. Chatter replaces one-to-one communication (e.g. voice calls, email, IMs), which are detached from a customer record and hidden from view and hidden from the eyes of management.

Once sales and finance are on the same system with a 360 degree view and a shared Opportunity to Cash process flow, everyone gains a holistic customer perspective and can work efficiently as a cohesive team, appearing as one company to the customer

According to Aberdeen, improving efficiencies addresses best in class companies’ top pressure of cost, as well as their most-cited business goal of lowered DSO. Their research examines how best-in-class companies achieved significant performance improvements by automating processes, integrating systems and centralising data. The best thing about this holistic approach is it delivers real bottom line results.

One company that serves as an example of what cloud computing can do is DenMat, a 30-year old, global dental manufacturing company with more than 400 employees and 23,000 customers. DenMat moved all of its sales activities into Salesforce CRM and all of its paper-based accounting data and processes into a new cloud accounting solution. Built on the same cloud platform as Salesforce CRM, the accounting software delivers real-time data visibility that helps sales, services and finance work together. DenMat eliminated the need to go to IT for reports from its various legacy systems and immediately recovered $200-300K in new found efficiencies.

“The cloud platform has created transparency that opens up the communication path from sales to customer service to accounting, and all the way out to production,” said Jonathan Green, vice president of IT, DenMat. Using Chatter, DenMat also reduced incident response time and improved internal communications – in one case, allowing the controller to get A/R information in seconds instead of days.

Most companies don’t realise how fractured systems and stifled communication are wreaking havoc on their business until they move their applications to the cloud. The cloud is a single foundation with a single set of accessible data serving everyone in the company as one team: a winning combination that streamlines processes for improved costs and better customer service. And best yet, sales and finance may find they’re compatible after all.

Jeremy Roche is President and CEO of FinancialForce. Jeremy was the driving force behind the creation of FinancialForce in 2009 with investment from UNIT4 and Salesforce. Prior to launching FinancialForce, Jeremy was instrumental in the success and global expansion of CODA, a UK-headquartered public company specialising in enterprise accounting applications. In 2008, Jeremy led CODA through its acquisition by UNIT4 and its successful integration with its new parent, creating one of Europe's top 10 software vendors. Jeremy began his career at IBM, after which he joined ISV Lychgate where he held a number of senior systems engineering and sales roles. He is also co-author of “Beyond Governance: Creating Corporate Value through Performance, Conformance and Responsibility”. Jeremy has a BA (Hons) in Business Studies from Thames Polytechnic, London.