Chris Rose of Sage Intacct on the Benefits of Cloud for ERP
May 03, 2018 | By Blake Oliver
- why organizations need to move to the cloud for their ERP,
- the value of cloud APIs for enabling third party integrations, and
- the threats and opportunities automation is presenting to the accounting profession.
Articles discussed in this episode:
"Job disruption is quickly coming to accounting, too," by Amy Pitter in Accounting Today
Blake Oliver: Please explain to our listeners what it is that you do at Intacct and what Intacct is all about.
Chris Rose: I'm the Vice President of Business Development at Sage Intacct. I'm focused on a number of key elements. The first is what we call our marketplace partners, of which FloQast is a very important and strategic marketplace partner for us. That's our ecosystem of complimentary application providers. Secondly, I work with organizations that may not be part of our marketplace, but are key application providers as well. Companies like Salesforce.com, ADP, and American Express. Then last but not least, my team focuses on business development and finding ways to deliver what we call “whole product.”
We look to deliver whole products as we enter new markets or continue to embrace verticals and micro verticals. That's our go-to-market strategy with regard to taking complementary products and engaging them with our prospective customers and current customers to deliver a whole product solution. We're focused on being a best-in-class provider of finance and accounting delivering extraordinary value as it relates to cloud-based accounting capabilities.
One of the big differentiators of a cloud ERP or cloud general ledger solution versus an on-premises or desktop solution is the fact that you can connect it to so many things. Do you find that folks who switch to Sage Intacct are using more integrations?
Yes. From day one, Sage Intacct was built with integration in mind. The first version released now almost 17 years ago anticipated and fulfilled the requirement of integrating with other complementary applications such as Salesforce.com.
The cloud provides us some very unique capabilities that have continued to develop as it relates to integration and allows this age old debate between suite versus best-in-class to continue to play out in the marketplace. With our focus in the mid-market, what we find is that organizations, whether from a departmental or an organization-wide perspective, are looking for best-in-class applications. The deployment as a true multi-tenant SaaS environment allows us to do that much more easily than we used to be able to do it.
To your point, what we’ve found is that close to 75% of our clients integrate with two or more applications today. It's how you get the significant benefits and returns on investment from moving to the cloud.
What would be an example of how data flows between applications? You mentioned Salesforce. Could you walk us through that?
Salesforce has a CRM or sales application that would be traditionally considered the “front office” and accounting is considered the “back office.” If you look at a workflow — if you look at the order to cash workflow, or even from lead to cash — all of the information as it relates to a prospective customer starts within Salesforce.
You start with a lead, your sales organization begins to qualify that lead, they move it forward into the sales process, they send a quote out, and that quote is where the integration process begins.
Within Salesforce, you're going to be quoting on products, but you're going to have either a single instance of your product catalog or a mirror instance of your product catalog sitting in Intacct as well. As you quote in Salesforce, those products that you deliver in a quote will mirror the products that are in Intacct. I've quoted. I've put out an order schedule. That order schedule gets signed by digital signature and now it's an order to be turned into a transaction. The integration between Salesforce and Intacct allows that to automatically get processed and an invoice is generated in Intacct.
The revenue recognition schedule is automatically created and moved into your financials, and we then update the Salesforce record so that your individual sales rep who may not be an Intacct user can see that the invoice we sent, whether it was paid or not, was it sent correctly, and what's the disposition of that client.
Once the customer receives the product, in many organizations Salesforce takes over in terms of customer support. That same process can be mimicked on the support side working through Intacct. From the initial lead all the way to the cash collected from the customer, all of the workflows and data elements are shared between the two applications that have different user bases without duplicate data entry. It is one record that seamlessly flows through.
That's fantastic. You're 1) saving time and 2) making sure that you don't have errors in the data.
Right. That's exactly the case. You're saving time in terms of data entry. You're significantly increasing the quality of the information that's within the system. Another benefit is that you see an increase in customer satisfaction because the invoices sent are correct per the customer order, so you see an improvement in days sales outstanding of cash. If your invoice is correct, you'll have a much higher probability of the customer paying the invoice versus receiving incorrect invoices. If the invoice is incorrect you're probably not going to pay your vendor and so therefore the time it takes to collect cash increases.
It’s not just about the cost savings of not needing to do double entry between two systems. There’s also the benefit of increased customer satisfaction.
Amy Pitter, President and CEO of the Massachusetts Society of CPAs, recently wrote an article citing a statistic that robotics is expected to eliminate 40% of basic accounting work in the next few years. How do you feel about potentially being responsible for this automation of jobs?
There's no question that technology either displaces or changes the responsibilities and the requirements of doing a specific job. The 40% number is probably a little aggressive as it relates to individuals and robotics. I think where it's not aggressive and it's probably underestimated is regarding transactions.
You used to put paper on the desk of an accounting clerk to file your expenses and that individual would then enter it into a system. Today your time and expense module, let's say Nexonia or Expensify, allows you to digitize your full expense report by taking a photo of a receipt.
No one touches it. It goes through an approval matrix that allows for exceptions to be managed and presto — you enter your routing number and account number and your reimbursement automatically gets deposited into your checking account once it's been approved. That used to be five, six, seven people touching pieces of paper for you to get reimbursed. Those transactions have disappeared.
Similar accounting transactions will continue to be automated on the front end of an accounting process and also on the back end with AI and other capabilities as it relates to the audit process. Today, audits of transactions and discrete elements of closing the books are based on statistical analysis.
Tomorrow, even today, many organizations are using AI to not take the statistical subset of transactions but actually evaluate every transaction. Those are the other kinds of places in which jobs will repurposed. I say repurposed because I really believe that like CFOs needing to become more and more strategic, your finance department will become much more analytical versus being totally replaced. You're still going to need experts to understand what's taking place with regard to transactions and most importantly help guide an organization on what future investments, future risk, and future returns will look like based on the information.
That is certainly appealing to think about the profession moving more toward that strategic level of guidance and out of the busy work.
This has been a topic of conversation with regard to CFOs specifically for quite some time. McKinsey and some of the Big Four have done studies for a number of years about the aspirations of CFOs moving from being primarily focused at the transaction level, looking historically, and being a nonstrategic participant in the executive team to something that significantly reduces looking in the rear view mirror and having much more of your time and your resources allocated to predictive and future decisions with regard to investment and risk allocation.
A version of this article originally appeared on the Cloud Accounting Podcast website.