Driving Growth

 FINANCIAL OPERATIONS TECHNOLOGY 01Financial operations technology is a foundation for growth.   

By Paul Van Den Berg and John Yeager

It’s that time of the year when plans for building the business up to the next level are getting underway, yet most plans fail to recognize that the necessary foundation of financial operations – people, processes and technology – are not in place to achieve those plans.

Fast-growing construction companies often face two major challenges: first, their key people are reliant on complex spreadsheets that import information from across their different functional systems that lack information and process consistency.

Second, they are not able to build for success because of the delayed insights and blind spots in their current operational plans, as they struggle to make informed decisions required to build their business.

The causes are obvious. As a business grows, the volume and complexity of information and its management outstrips the legacy processes, which are the tools and people skills that help move the business forward. Like a construction site, visibility into operations and finances is hard to comprehend because of the pace of activity and the difficulty of collecting and analyzing information across all aspects of the business. 

At the same time, friction increases exponentially as different functional systems fail to keep up because of the historical designs, inflexibility or costly maintenance across accounting, time and expense management, purchasing, contract and budget analysis that bury you in repairing rather than building to get to the next level.

If your weekly and monthly reporting requires a complex spreadsheet to be built from accounting and other siloed systems and teams, it’s time to enable your growth plans by adopting a frictionless and fractional approach to business operations.

Here are the Three Pillars for success that your construction business can adopt today:

i. Enable growth with modern frictionless operations technology as your diesel fuel – Aggressive growth requires the foundation of a frictionless approach to financial and back-office operations (FinOps). Start by evaluating your FinOps systems and processes and the phased milestones of capability required to support your company’s plans. For some that means improving what you have today, but most need to move their accounting and back-office processes to a modern cloud solution. Moving to a modern cloud accounting solution will cut accounting costs by 50 percent. This is achieved by the resulting paperless automation, streamlining and improvement of FinOps processes, technology and people. At the same time, it will increase the efficiency and productivity of all staff and allow them to focus and scale without needing to hire additional operations staff.

ii. Focus your team full-time on your unique value and use fractional expertise for the rest – Optimal growth requires that companies minimize the resources engaged in non-core accounting and back-office processes, people and systems. Fractional outsourced expertise using modern cloud-based systems and processes can provide you with access to a higher-level of expertise and support. This is made affordable by accessing a blend of expertise levels and by avoiding travel and employee costs. Leaving the commodity plumbing and maintenance of financial operations to outsourced resources allows your knowledge workers to focus on the analysis that provides the insights essential to making better decisions. 

Taking a fractional outsourced approach to building and maintaining their financial operations systems and process foundation allowed one construction company to grow from $50 million in projects managed to more than $3 billion in three years. Leveraging expertise from outsourced fractional accounting, operations and IT systems and staff is the only way for an organization to keep up with the accounting, process and technology changes in their business and in the market.

iii. Aim for a high-resolution view of your business financial operations to avoid building on a flawed foundation – The increased velocity and complexity of high growth means that you need an automated and detailed FinOps view into your business. For management and staff to be able to understand and manage growth, they need to have visibility into the cause and effect of even micro changes to the business. In the same way that a Total Station delivers the detailed mapping, layout and analysis of a construction site, your Financial and Operations systems and processes need to deliver the right data at the right time down to the financial transaction level.

A “successful” privately held company we worked with was recently shocked into the realization that their business was not profitable. In fact, there was not a single aspect of their business that was operating profitably. Timely dashboards and reports presented the indisputable detailed data that helped change the assumptions of their sales-driven leadership team. This epiphany made them realize that they needed to be more data-driven to sustain their growth and allowed the finance team to be a more active partner of the management team in transforming them from a sales and customer-driven culture to a data-driven one.

The hard truth is that most business owners are not financial wizards and most accountants don’t understand how to orchestrate the operations, processes or software systems of the business.

Mapping Out Your Key Milestones 

Evaluate your financial operations situation and target key transformation milestones over the next two years against a maturity model to create your road map to success. 

John Yeager is the managing director of Atlanta-based accounting firm Bennett Thrasher. He is responsible for enabling timely financial and operational visibility and control for fast-growing companies through business transformation services and managed accounting and technology services. Contact him at [email protected] or 770-390-0394.

Paul Van Den Berg is an information industry professional who focuses on optimizing financial and operational processes for growing businesses. Contact him at [email protected]

 

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