“Everyone is adopting digital transformation; it must be great… I want it too!”
We know that automation is one of the key success factors to growing your businesses, but is it true that you should spend your money on digital transformation? It’s all so fast and advanced, is it right for your business?
Many businesses and entrepreneurs have experienced the massive impact of the COVID-19 pandemic; many businesses (including our clients) are on the brink of crisis while some are still on a harness, and some closed down due to the economy. According to The Star, the Entrepreneurship Development and Cooperatives Ministry mentioned a total of 32,469 small-medium and enterprises (SME) had folded since March 2020 when the government had implemented Movement Control Order (MCO) to stem COVID-19.
Usually, accounting and other back-end processes are the last to be considered under the digital transformation roadmap. One of the reasons for it is because most businesses first focus on digitalizing sales and marketing for business growth, and that’s totally normal. On a personal note, digitalizing the accounting network is critical because it provides the facts and figures of your business performance and the financial position for any major decision making in your business. In other words, it is the key determining factor for your business.
Perhaps digitalizing your accounting work at an earlier stage may help you roadmap your digital transformation with greater clarity. Delaying or having no plan for cloud accounting adoption might just cause your businesses to hit the bottleneck of your company’s growth. And in order to prevent such dismal, we have shared with more than 200 business owners in Malaysia about the digitalization of their business back-end structure: for example, cloud accounting, cloud payroll, cloud inventory, etc., since March 2020. You can read about it here: Top 8 Cloud Accounting Features for Malaysia Startups (2021)
Through this post, we wish to provide you and the public with modern clarity of cloud accounting software adoption. Thus, we came out with this 9 checklist before your cloud accounting journey starts. Have a look at 9 Easy Steps to Adopt Cloud Accounting Software in Malaysia.
In simple terms, ERP integrates the organizations’ processes such as accounting, financing, manufacturing, management, to be integrated into a single system. The ERP system will allow departments to maintain their own systems but accessibility across departments are connected through ONE application, ONE interface.
Often, you might be offered to invest in an Enterprise Resource Planning (ERP) software if your business is scaling or mid-sized. No doubt that the capabilities of an ERP software will be a vendor to manage almost every department with customized process flows, but is it really needed, or is there another alternative?
To be upfront, a change towards digitalization is inevitable but the usage is NOT for all industry and business processes. A digital transformation strategy can be crafted to production based on a business’ nature of the business, process, pain points, people, culture, etc. Here, we will highlight the implications of cloud accounting software to provide you with more clarity before any implementation of an ERP or cloud accounting software.
In a quick glance, the initiative of adopting cloud accounting software serves the core objectives of:
➤ Access real-time financial information
➤ Better control and monitoring on business through analysis on numbers
➤ Stay competitive in local, regional or global
➤ Business continuity and sustainability
➤ Improve productivity rapidly and enabling remote working
➤ Save cost and optimize resources in the long term
➤ Replace repetitive tasks
➤ Reduce or eliminate redundant and manual works
➤ Effective relocation of workplace
➤ Many many more….
Adopting cloud accounting software is not just about giving mere instructions to your team members and saying, “LET’S GO DIGITAL!”. As the leader of the organization, you need to show your quality leadership. Your consistent guidance and involvement are critical because the digital transformation has to align with your company’s goals – be it the short term or long term goal.
Conduct an internal audit (or outsource) in the accounting department of your business to identify a list of current pain points in business processes before forming a digital transformation strategy and choosing any technology. It is only right to analyze the health of your business first in private before taking any supplements!
You have to be aware of your company’s current status – no matter surviving or growing, your core focus should be on improving and optimizing sales processes in both issuing quotation/invoice as well as cash collection. It is so your business can scale and capture more market share while not increasing your headcounts.
Data analytics, reports, and metrics are your truth-teller. It’s the facts and figures that addresses your company’s issues.
In building a digital transformation roadmap, build a layout of innovative ideas given by a key person from each department, starting from cloud accounting. Your action plan should include preparing a list of your Top 10 Pain Points to clear your mind off from confusion.
Different industries have different unique needs and requirements on technologies. We always encourage our clients to focus on digitizing the areas which would help them save time and resources to generate more revenue.
If you are an owner of a restaurant (in the food & beverages industry), then one of the basic areas you should digitize is the Cloud Point-of-Sales (POS) software. The other areas which a restaurant can digitize are raw food material management, central kitchen management software, cloud payroll software, cloud scheduling, and time tracking software, etc. To know your business process demands, chart out your digital transformation strategy by stages based on your limited budget.
If your established business has to heavily rely on issuing quotations and invoices using accounting software, why not expand to the innovation of cloud accounting software?
There is NO best practice of workflows in any industry, it is only about what best practice SUITS your company structure, people, and culture that brings your team to work effectively and efficiently. Benchmark your leading competitors to mitigate confusion and begin operating with improvements.
Cloud Accounting Software implementation is a project that would require a bunch of committed team members in the accounting department. To set up such a team, we recommend having a combination of people from various departments whose operations are linked to accounting.
To learn from all the consult we’ve had with our clients, we’ve taken notice and established that cloud accounting initiatives may fail if the founder or key person of a company does not have the heart of involvement. Thus, we strongly suggest for the founder of the company be involved in this project because it is essential to establish a foundation and direction for onboarding on such transformation.
Committed involvement and active participation from the key person of every department is vital in creating positive impacts because strategic and constructive ideas can be generated during a brainstorming session based on existing challenges and past experiences.
Prices and expenses. That’s one of the restrictions that businesses have to work with on a regular basis.
Small & Medium Enterprises (SMEs) in the world is in a challenging period amidst the pandemic, what more the Malaysian SMEs. Budget is simply the real concern when it comes to wanting the shift on digital transformation, purely due to uncertain future development. So, it drives you to opt-out from the emerging systems or programs, though they are ideal for your business to grow.
But to keep yourself in such strong competition, digital transformation is inevitable! It all comes back to say that digital transformation is imperative.
To anticipate the costs needed, let’s evaluate your business’ breakeven point. (Click HERE to find out how to calculate a breakeven point). Most of the cloud solutions are on a Software-as-a-Service (Saas) model which you can pay on either a monthly or annually (with discount) subscription basis. Now, add this figure on top of your minimum breakeven point.
Please ensure that you are well-equipped with real-time financial information to keep track of your business performance from a financial perspective.
With plenty of models of software available, it’s a challenge to meet proposals and we understand it’s tough to make specific decisions. Such procurement would require a functionality list of the different software available. Lucky for you, we have written a new blog for our community regarding the Top 5 Cloud Accounting Software in Malaysia along with their function availability!
After your list of top 10 pain points in the accounting department (#1), you should be able to know which software suits your business.
A free trial is usually offered to you and your team to test the software’s feasibility. Feel free to test it out with their guidance and find out whether the outcomes are as expected. Assess every scalable feature, communicate the risks during the consultation and continuously compare the structures among different cloud accounting software.
With the set budget (#4), you can now seek and filter the price option in finding the perfect cloud solution to transform your business efficiency.
P.S. CALTRiX offers a Discovery Call with you to find out which cloud accounting software fits your business well. Click on the button below and we will contact you soon!
Failure to implement risk can be reduced significantly if digital transformation runs differently for different departments. Because it is most likely that your company is currently using another software, we recommend parallel implementation to most of our clients, or to implement the transformation right after your financial year-end.
Through the many strategies, we’ve found that an effective strategy to promote collaboration among departments in adopting new technologies would be to provide an overview of the cloud accounting transformation project. One of the agile project management tools which help create a positive impact on your teams is the Gantt Chatt. By setting the timeline, your team members will understand better, which later increases the indirect support towards successful digital transformation. It’s all a chain reaction!
Please ensure that the Gantt Chatt are mutually agreed and well-communicated to every single related staff.
Tip: Successful implementation of cloud accounting takes from 1 – 6 months, depending on the size of your accounting department.
KPI can be set for various areas, e.g. duration of the project, resources allocated for human and monetary, and others. The flexibility in setting KPI measures is enhancing but most importantly, a successful digital transformation needs to show improvement in productivity.
For the first 3 – 6 months, you would be required to report on the updates and the latest progress on a monthly basis. The timely review/report is vital in ensuring a smooth transition from the old to the new software. Additionally, you may address any advancements or unprecedented conditions by reporting more frequently, if ever a user requires.
The delivery of the software would usually take up a month to set up and adapt before any streamline of activity continues. The second month of adoption would start on the implementation, which gets your operations up and running with the software. After the implementation, you can set a KPI for improvement and evaluating the productivity of your accounting department in percentage (%) or the number of headcounts.
The main objective of digital transformation is to succeed in implementation, leaving a legacy in your industry.
You can engage with a consultant to provide independent opinions to save your time in doing research. They have practical experience on how the software can streamline your accounting workflows with proper control. You will get a wider clarity and insights on the complex directions in digitalizing too.
Alternatively, hire software partners during the service implementation so that the effort in safeguarding organizational communication is well coordinated. With this transparency in communications, they can work on the alignment of your budget, timeline, and KPI. Engaging with a software partner allows the process to be faster, as well as increase the success rate with just a one-off investment fee.
One of the factors that cause digital transformation failure is having a team of exhausted employees. A crucial learning point here is to be clear of the team’s operational capacity and ability by having a thorough understanding of their job scope because the deployment of the cloud solution includes the entire team to be hands-on.
Cloud Accounting Software integrates with many different cloud software that fits right into your business processes. E.g inventory, warehouse fulfillment, payroll, CRM, and many more. Supercharge the actions in managing payroll of the companies in a paperless approach by implementing Cloud Payroll Software to the Human Resource Department. Understand more about 7 Powerful Benefits of Cloud Payroll Software in Malaysia here.
Based on the content above, you would know to prioritize solving specific pain points within a limited budget, and the importance of the working power dynamics between departments. In fact, you may apply this comprehensive checklist for any future digital transformation projects!
Your interest in cloud solutions must’ve increased after knowing the potential it could bring to your business! You might be feeling extremely excited to leap into the many offerings cloud solutions have available for your business process. At certain times, you might be led to digitalize every area of your operations, but we strongly recommend not do so. Thus, the simple question to ask is if it is the right time to invest in cloud accounting software or the demand to implement such transformation can be done by stages?
Digital Transformation is a marathon, so it is not possible to achieve the enhancement overnight. We believe that the road of efforts to digitalization will not be wasted if your business follows the trends in business processes. This core value will continue to attract creative and innovative talents which would be an easy fit for your organization. The workforce has to embrace and react with a positive mindset in facing the aspects of cloud accounting, to express balance, and to be efficient, all without affecting your customer managements.
We hereby wish you all the best and good luck in your digital transformation journey! If you have questions, we are keen to answer them for you! Simply drop us an email and connect with us on our social media!