Float Finance into the Cloud
From the sales department's standpoint, the hubbub around 2009 as the "year of the cloud" must seem a bit puzzling. Many salespeople have been working on Web applications in the cloud for years. With their need to coordinate teams of remote employees, sales was among the first to see the advantages of anywhere access, invisible software updates, automatic backups, and all the other conveniences of cloud -- or software-as-a-service -- applications.
Nevertheless, the year of the cloud is more than just old news for CRM. As other departments join sales in the cloud, they can more easily share information. And that, in turn, stands to make CRM much more effective.
Take finance, for example, and the emerging breed of cloud accounting applications that are Web-based, rather than located on company servers. By hosting CRM and finance applications in the cloud -- ideally on the same cloud platform -- companies can monitor sales from initiation (the initial customer contact) to realization (revenue). This expanded view of the company's business allows finance and sales employees to streamline their work, make more informed business decisions, exert better credit control, and, ultimately, improve customer service.
Salespeople are well aware of the fact that invoicing errors often delay payment -- and commissions -- by weeks or even months. A recent survey by accounting software provider Coda found that:
- 47 percent of salespeople said that invoicing delays are a "definitely" or "somewhat" common source of cash flow problems for their company;
- 25 percent estimated that their company has at least $5,000 a month delayed due to invoicing errors; and
- nearly 17 percent have seen payments greater than $50,000 delayed for that reason.
Many invoicing errors come from accountants rekeying sales data by hand -- a common practice in companies where CRM and finance systems don't communicate. But when the two systems connect in the cloud, the accounting software can automatically create an invoice the moment a salesperson closes a deal and rekeying is therefore unnecessary. Just by eliminating this one error-prone step, companies can dramatically improve the accuracy of their invoicing. Not only does this help ensure steady cash flow, it also helps put customer relations on solid footing. Once raised, the invoice can be checked and emailed instantly. Generally, the collections process can start as soon as the client is billed, so timely billing helps cashflow. Accurate billing alone can't win loyal customers, but it certainly helps.
Improving the flow of information between sales and finance helps with customer relations in other ways as well. With access to a customer's up-to-the-minute payment history, salespeople can make informed on-the-spot credit decisions without needing to wait on accounting. Cloud accounting also makes it possible to go paperless in almost all interactions with customers and suppliers. Not only do many clients prefer the paperless option, it's also better for the environment and involves less administrative time and expense.
There are also time-sensitive benefits to improving visibility across the business. With a sweeping new regulatory regime in the works, financial reporting has become more important than ever. An integrated view into the sales cycle offers the most accurate real-time view possible. Moreover, since cloud accounting software is updated behind the scenes, businesses can be sure their financial data complies with the latest government requirements -- something that would require costly and time-consuming software upgrades with on-premises systems.
And what about security? It's true, in the past, companies were reluctant to keep their financial data in the cloud. But that attitude is quickly changing. Security with the latest cloud accounting applications -- and the cloud computing infrastructure that supports them -- is far superior to that of most in-house alternatives. That's especially true at small or mid-size companies, which often lack strong backup and disaster-recovery processes.
In a recession, we often hear that companies need to streamline their operations while at the same time improving customer relations. Those that have already embraced cloud CRM have a head start. By integrating CRM with cloud accounting, they can emerge even further ahead of the competition once the inevitable upturn arrives.
About the Author
David Turner (email@example.com) is the group marketing director for Coda Group and is responsible for the global co-ordination of CODA's corporate marketing, product marketing, vertical marketing, technology alliances, and brand management.
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For the rest of the October 2009 issue of CRM magazine please click here.
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