IDU | Budgeting Forecasting and Reporting Solutions

Thursday, 19 September 2019

Accountancy as heroism

accountant is the super hero

The financial health of South Africa’s cities and towns is worse than ever before, with only 18 out of 257 municipalities getting clean audit reports for the 2017/18 financial year. Surely it’s long past time to introduce more transparency into our government spending. 


There are plenty of unenviable jobs in South Africa these days (university vice-chancellor, anyone?), but Auditor-General Kimi Makwetu and his team have been having a particularly hard time lately. Municipalities have been brazenly disregarding audit recommendations – the performance of 63 of them actually got worse last year, with only 22 doing better. To make matters worse, Makwetu says his audit teams have experienced people pressuring them to change their findings, questioning their motives, and even outright threats and intimidation. 

Accountancy shouldn’t have to be an heroic profession, so it’s good news that the new Public Audit Act gives the Auditor-General stronger powers to press for further investigations and initiate binding remedial action. But relying on the auditors to catch irregularities years after they’ve happened is much too little, too late. 


Like mould in a damp cellar, dodgy dealings, bad faith and even plain old incompetence thrive in darkness. Transparency and free-flowing information are the light and air a democracy needs if it’s not to start rotting at the foundations – and with today’s technology, there is no excuse for a lack of transparency. 


What does transparency look like? It means real-time access to information that’s easy to understand, even if you’re not a professional accountant. It means being able to dive below the top layer of aggregated numbers, all the way down to individual transactions if necessary. And most of all, it means the people who are responsible for spending money are also held accountable for it. 


Imagine if your local municipality’s accounting systems were open to public scrutiny in real time. Ordinary citizens could see exactly what was being spent on travel, or entertainment, or mystery consultants—and just as important, what was not being spent on upgrading sewerage plants, fuel for refuse collection trucks or maintenance of public roads and housing. And they’d be able to see it within days, not months or years – which means there might be time to stop problems in their tracks, before the money has been siphoned away into offshore bank accounts and properties in Dubai. Best of all, people who know their actions are being watched are less likely to go wrong in the first place. 


None of this is impossible to do right now – it’s not even particularly difficult or expensive, especially compared to the billions we’re continuing to lose to “irregularities”. The technology to achieve all of this already exists and is in use around the world, including in many places right here in South Africa. So is government not making its spending transparent because it can’t – or because it doesn’t want to?


Did you know that South Africa’s national Budget is rated as one of the most transparent in the world? In fact, in 2017 we tied first with New Zealand in the International Budget Partnership’s Open Budget Survey of 102 countries. So we’re getting one side of the equation right. Now it’s time to focus attention on the other side, and get our spending right as well. 

As published in Accountancy SA - September 2019

Tuesday, 3 September 2019

Recession and Resilience

Resilience


There might be a recession coming soon; or it might come later. Economists are notoriously bad at recognising recessions until we’re in one – but we do know, at least, that another one will be along eventually.

Given this certainty, what’s the best way to deal with a looming downturn? For most people, the instinctive response is to prepare as if for disaster: nail up the windows, batten down the hatches, tighten belts or whatever the metaphor of choice might be for stockpiling resources, cutting spending and reducing exposure to risk.

Our instinctual response makes sense in the context of storing food for a long winter, or in anticipation of a famine – but in a more complex world than our ancestors faced, some of these reflexes can be counterproductive, particularly the instinct to stop spending. Deloitte, for example, reports from its latest survey of European CFOs that companies that reinvested more during the last recession, particularly those who were more advanced in the use of ICTs, achieved higher growth rates during the recovery. They attribute this success to thinking ahead and planning to take early advantage of the opportunities that inevitably arrive with a recovery.

Similarly, McKinsey partners writing in the Harvard Business Review say that during the next recession they expect companies to invest in, and rely increasingly on, digital tools to improve quality, simplify operations and boost productivity.

A recession, then, is an opportunity to invest, thoughtfully and strategically, in tools that will boost your organisation’s resilience and agility. Some of the most valuable tools are those that are able to improve communication, transparency and accountability across the company.

For example, depending on their needs and culture, some organisations centralise during times of trouble – others choose to disperse. Whichever choice they make, visibility is key: decision makers need to know what is happening at every level in the organisation, employees need clear direction from their managers and leaders, and teams need to communicate clearly across the organisation. Whatever level of confusion and mismatch we might be able to get away with in good times, we cannot afford it when things get tight. In particular, we need to take full advantage of the combined brains of everyone in the organisation – we need to gather and use all the resources of knowledge, skill, talent, experience and creativity we have.

In some ways this is common sense – but then again, we all know common sense is not all that common, particularly when people are feeling worried or fearful.  One of the most dangerously self-defeating reactions is to start hiding or withholding information, usually in the entirely misguided belief that giving people access to an accurate picture of reality will cause panic or encourage defeatism.

There’s a great example of this in the deservedly acclaimed TV series Chernobyl. In the first episode, local party officials agree on the night of the explosion at the nuclear reactor not to tell the local townspeople what has happened – for their own good. It was nearly two days before the town was evacuated. Other lies, omissions and concealments contributed greatly to human suffering in the wake of the disaster.

Tempting as it might be to tell ourselves that concealment of information was a disease peculiar to Soviet-era Russia, we all know it’s not. Again and again, leaders withhold or soften the truth about problems facing their organisations  – whether out of shame, fear, belief that they can fix it on their own, outright denial or some combination of all of these.

The truth may indeed hurt – but avoiding it always hurts more in the end. Leading people successfully through difficult times requires the courage to share the truth – and to seek, then accept, input from the rest of the organisation.

Only when everyone in an organisation has access to all the information they need can they truly apply themselves to fixing problems, developing new ideas and creating new opportunities. Choosing and using digital tools that facilitate information flows throughout the organisation is essential to building the resilience that’s needed to weather tough times.

So if you find yourself worried about the future, put your instinctive reactions on hold. Pause; reflect; look ahead – and then choose the actions and investments that will strengthen your organisation rather than weakening it.

As published AccountingWeb - 28th August 2019 

Thursday, 22 August 2019

Stuck in spreadsheet hell?

It’s time to upgrade your budgeting and forecasting process

Spreadsheets cause accountant frustration

How long does it take your company to prepare its annual budget – two weeks? Six weeks? Two months? Three months? And on a scale of “walk in the park” to “swim through shark-infested waters”, how stressful is the process?

If your answer is six weeks or longer, we’re betting the process is also stressful and unpleasant. For some human activities, a slower pace means more leisure and time to reflect; budgeting is NOT one of those activities. If a budget takes many weeks or months to complete, it’s not because anybody is taking it easy but more likely because they’re stuck in a nightmarish cycle of data collection hassles, arguments, delays, requests for more information and spreadsheet version conflicts.

The good news is: It doesn’t have to be that way. It’s possible to shorten your budget planning and approval process, in most cases to four weeks or less, while also making it less stressful, more accurate and more useful. The key is ditching those pesky spreadsheets in favour of a single, central information source that makes it easy to find and share accurate information with everyone who needs it.

Don’t get us wrong – spreadsheets are a fabulous tool and serve many small and early-stage businesses well. But at some point in the life of every organisation they begin to outlive their usefulness – and like any other tool unfit for purpose, they can start to cause more problems than they solve. Problems like inaccurate data capture, version conflicts, broken links, and user confusion and misunderstanding.

Here’s what’s possible instead: budget information is held in a single database to which all line managers have the access they need to check their past spending and propose new budgets. The interface is easy to use, so they don’t feel intimidated and overwhelmed by the task and there’s less temptation to procrastinate. The moment their numbers are entered, the finance department and their managers can see them, and query them if needed – right down to the level of individual line items. There are no long email threads with multiple attachments, just a single database with comments and attachments embedded. Each department’s budget proposal is submitted on time, and approval is quick; if the budget isn’t approved, line managers know why and can make alternative proposals.

As a result, departments feel more ownership of their budgets, and empowered to make better financial decisions. If the situation changes, they’re able to update their budgets in real time – and the finance department gets early warning of changes, instead of only finding out months later when actuals are finalised. The finance department is also freed up for more strategic tasks like profitability analysis and proactive planning.

In the end, moving to a dedicated budgeting and financial planning system means each budget planning phase is shorter – but also that budgeting is continuous, making the entire firm more agile and adaptable to changing market conditions.

So if you’re still stuck in spreadsheet hell – you don’t have to be. Have a look at what idu-Concept can offer.  

Friday, 2 August 2019

Will Libra entrench Facebook’s dominance or trigger its downfall?




“Move fast and break things”, Facebook’s motto until 2014, was the mantra of the “disruptive innovation” era.  Five years on, the naivety of this starry-eyed approach has become painfully obvious. Disruption, it turns out, causes damage. So far, the list of things Facebook has broken in its haste includes journalism, personal privacy, Myanmar, and democracy; will the global financial system be next?

Facebook launched its new digital currency Libra and digital wallet system Calibre in June with the question: “What if everyone was invited to the global economy, with access to the same financial opportunities?” It seems, on the face of it, like an obviously wonderful plan: it’s hard to argue with the idea that everyone should have access to the same opportunities.

There’s a lot to like here. Cryptocurrencies really do have the potential to dramatically expand financial access for everyone, particularly in parts of the world where government interference in money systems is heavy-handed and unproductive. The costs of transferring money across borders are absurdly high, and it’s the world’s poorest people who pay the highest costs. Making cross-border transfers cheaper and easier will undoubtedly improve lives.

The major barriers to greater adoption of digital currencies so far have been not only their volatility (looking at you, Bitcoin), but also the fact that they are complex and difficult to understand and use, locking out precisely the people who could benefit most. Between Facebook’s global reach and its undoubted skill at making products people want to use, they have an excellent shot at actually making Libra fly.

It may not be as easy as they think, though. People’s behaviour around money is complex and not always easy to understand, particularly when you are working across cultures. In regions where many people don’t have formal bank accounts there are already very successful local mobile money transfer systems, East Africa’s Mpesa being one of the most well-known examples. These services are well adapted to their local markets, compliant with local regulations and well supported. Can a single digital currency system possibly deliver a service that will work as well in Dhaka, Mombasa, or Lima as it does in San Francisco?

The problem becomes particularly acute at the point where digital currency must be swapped for real currency, which most people will want to do. The scope for money laundering and other criminal activity is huge, and Libra’s proponents say they have been in talks with “local convenience stores and money exchanges” to ensure anti-laundering checks are carried out – but it’s frankly hard to believe this is possible on a global scale. Calibra’s VP of produce Kevin Weil recently asked TechCrunch to imagine a situation “where if you want to cash in or cash out, you’ll pop up a map that highlights physical locations around that allow you to do it. You select one that’s nearby, you select an amount, and you get a QR code that you can take to them and complete the transaction.” Weil’s faith that the entire planet works like California is touching, but misplaced.

Even if Libra can succeed on a global scale, there is another problem: getting around central banks and governments, which are already struggling to control cryptocurrencies. It’s tempting to cheer them on for precisely this reason – government controls aren’t popular anywhere – but there is potential for unleashing a disastrous cascade of unintended consequences.

Libra is a “stablecoin”, backed by a reserve of real currencies and other assets to prevent the kinds of wild price fluctuations that have bedevilled Bitcoin – but this reserve does not amount to the kind of liquidity backstop that a global currency requires. As Columbia University’s Katharina Pistor has pointed out: “The idea of a private, frictionless payment system with 2.6 billion active users may sound attractive. But as every banker and monetary policymaker knows, payment systems require a level of liquidity backstopping that no private entity can provide.” If there’s ever a run on Libra, will it have to be bailed out by central banks?

In effect, Libra is creating a set of obligations on the entire global financial system – without submitting itself any kind of regulation, control or accountability beyond the figleaf of the Libra Association. No wonder governments and central banks are rushing to pour cold water on the idea.

Then, of course, there is the problem of Facebook itself: The company has become a perfect example of the harms that can be caused by large monopolies answerable to nobody but their shareholders. The concentration of even more power in the hands of Facebook and companies like it serves nobody.

Facebook says, and possibly even believes, that Libra will be “positive for people”. Given their track record so far, the rest of us can be forgiven for taking this serene self-assurance with a very large dose of scepticism. The way things are going, Facebook might even achieve the incredibly unlikely feat of making government look attractive again.

 As published on AccountingWeb - July 2019


Tuesday, 16 July 2019

Unravelling the consequences of the US ban on Huawei



The US government has been steadily ramping up its campaign against Chinese tech giant Huawei in the past few years – and its latest move is already beginning to have serious global consequences.

In May the US Commerce Department placed Huawei on an “entity list” of organisations essentially banned from doing business in the US or with US companies. The effects rippled out far and fast: Within days, Google halted sales of its Android mobile operating system to Huawei, meaning that one of the world’s most popular handset manufacturers can no longer ship phones using the world’s most popular operating system. Huawei will either have to “fork” Android, continuing to develop its open-source core along a divergent new path, or develop its own operating system. Either choice will have significant consequences for billions of ordinary cellphone users around the world.

It’s not only US firms who are affected, either. British microchip designer ARM has told its staff to suspend all dealings with the Chinese firm because its designs contain technology developed in the US, and Japan’s Panasonic likewise stopped shipping some components.  This is only the start. Technology companies around the world are deeply interconnected: research is conducted and standards are developed by global teams, designs developed in one country are manufactured in another using components sourced from yet others; and those components themselves have components which were produced in global collaborations. The connections go all the way down.

One of the more easily foreseen consequences of interfering so bluntly in this set of global networks is that Huawei and other Chinese companies, with the backing of the Chinese government, will speed up their already significant efforts to develop their own technologies to replace everything from chipsets to software. Most analysts suggest this will be difficult and take time – but it will happen.

The US, in other words, is incentivising China to become a lot less dependent on the US (and in the process perhaps making many other nations think twice as well). This is not great news for American tech companies, for whom China is a major export market; many will suffer in the short term, and in the long term they face the risk of being cut off from the world’s largest market.

In at least one area, China and Huawei are already far out in front. Huawei is the world’s largest manufacturer of network equipment. It also holds critical patents over the fifth-generation (5G) mobile technology which is beginning to be implemented around the world, and is expected to start seeing mass adoption by 2025.  5G, which promises mobile connectivity as fast and reliable as the fastest current wired connections, is a potential game changer, enabling everything from autonomous vehicles to remote surgery.

It’s Huawei’s dominance of network equipment, of course, that is behind the US ban in the first place. The ostensible reason is that Huawei’s ties with the Chinese government are too close and that allowing its equipment into critical network infrastructure is a national security risk. Those of us outside the US are perhaps justified in viewing this with some scepticism. The US government, defence establishment and the tech industry have deep links going back many decades; indeed, the Internet itself has its roots in DARPAnet, a project of the Defence Advanced Research Projects Agency. If Huawei is a threat because of government links, should we not be asking equally difficult questions about Cisco, or other US-based firms whose equipment is embedded in US and other global telecommunications networks?

The US already arrogates to itself significant powers to monitor global network traffic and seize private data around the world. The Clarifying Lawful Overseas Use of Data (CLOUD) Act, passed hastily by Congress in March 2018 without any committee review or hearing, compels US companies –like Google, Amazon, Microsoft, Apple, Dropbox, and many others --  to release data they hold to US authorities, even when this data originates and is stored overseas. This will require a lawful warrant, of course – but the warrant will be classified. And with the US having a notably elastic idea of what constitutes a threat to national security, it’s easy to imagine that most warrant requests will be granted with little scrutiny – especially if they don’t affect US citizens.

Whether the US battle against Huawei is a matter of national security, anticompetitive meddling to protect its own economic interests or a bit of both, the implications reach far beyond America and China. When elephants fight, goes an old African saying, it’s the grass that is damaged; and in this fight, it’s the rest of us who are grass.

As published on AccountingWeb - 1 July 2019

Wednesday, 10 July 2019

IDU partners with Sage Intacct



IDU Partners with Sage Intacct, bringing together powerful Financial Planning and Analytics capabilities with the innovation and customer satisfaction leader in cloud financial management solutions.

SAN JOSE, Calif. – July 10, 2019 – IDU, a leading provider of Financial Budgeting and Reporting solutions, today announced its official partnership with Sage Intacct. IDU has been listed as a certified Marketplace partner with Sage Intacct. This partnership means the idu-Concept solution has been thoroughly reviewed and approved by Sage Intacct's partnership team, and that Sage Intacct users can use idu-Concept to integrate seamlessly with their cloud accounting software.

Sage Intacct delivers incredible value to users by empowering finance teams with deep functionality that automates complex processes and provides deep financial and operational insights to help companies grow. Sage Intacct also offers an easy path to extend the solution by seamlessly connecting with other best-in-class solutions like idu-Concept for their financial budgeting, reporting, and forecasting requirements. Sage Intacct focuses on delivering a solution that puts client success first, and that commitment has allowed it to earn the highest customer satisfaction in the industry.

IDU makes budgeting, forecasting, performance management and reporting tools to simplify financial management. Our flagship product, idu-Concept, provides easy, effective budgeting and financial reporting for medium-sized to large businesses. idu-Concept integrates easily with Sage Intacct, reducing budget cycles from months to weeks.

The idu-Concept integration with Sage Intacct offers real-time, online access to information in a format that is easy to use and understand by both financial and non-financial managers. Instant access to key information allows the business to react faster to deviations from the plan. It also increases cost-center managers’ involvement, empowerment, and ownership of the numbers. 

We’ve built a thriving partner community and marketplace, with solutions that help companies extend the value of Sage Intacct,” said Eileen Wiens, VP of Business Development, Sage Intacct. “Our customers choose Sage Intacct to drive efficiencies across their financial processes, and by automating their budgeting, forecasting and reporting with this integrated solution, IDU helps them further this goal.”
IDU’s Sage Intacct integration is available to customers via the Sage Intacct Marketplace. To learn more visit the IDU profile page on the Sage Intacct Marketplace.


About IDU
IDU delivers top of class packaged budgeting, forecasting, performance management and reporting tools to simplify financial management. Our flagship product, idu-Concept, provides easy, effective budgeting and financial reporting for medium-sized to large businesses. idu-Concept integrates easily with ERP software, but unlike more cumbersome offerings, idu-Concept can be implemented quickly, requires little or no ongoing consulting fees and reduces budgeting cycles from months to weeks. For more information on IDU, please visit www.idusoft.com

About Sage Intacct
Sage Intacct is the innovation and customer satisfaction leader in cloud Financial Management. With the powerful combination of Sage and Intacct, the Sage Business Cloud offers the best capabilities of both companies. In use by organizations from startups to public companies, Sage Intacct is designed to improve company performance and make finance more productive. Hundreds of leading CPA firms and Value Added Resellers also offer Intacct to their clients.

Sage Intacct is based in San Jose, California and an entity of Sage, the market and technology leader for integrated accounting, payroll and payment systems, supporting the ambition of entrepreneurs and business builders and a FTSE 100 business. For more information on Sage Intacct, please visit www.sageintacct.com or call 877-437-7765.


Tuesday, 2 July 2019

Am I an asset?



The accountants attending our annual user conference earlier this year paused for thought about how to navigate the rapidly changing workplace as we move into the fourth industrial revolution. And, they asked some insightful questions about what it means to be a valuable employee today.

Sameer Rawjee, the founder of Google’s Life Design Lab, and currently working with companies and schools to tackle continuous learning and purpose at work, sparked a lively audience discussion during his keynote address. This was when one of the attendees asked: “Am I an asset to my company? Or am I just OpEx?”

Only an accountant could have summed up today’s workplace existential crisis in this way. And it neatly frames the conversation about how to ensure we stay relevant in our own roles, plus how we can help our people stay valuable in our companies.

My view is that on day one of our jobs, we are all assets to our company. But that we run the risk of depreciating every single day, unless we actively work to ensure our own growth, and the growth of the people around us, in order to stay relevant and valuable in an ever-changing world.

And don’t think that as accountants we are exempt from this tidal wave of change. Previously we may have had a predictable career path where hard work and experience progressed us along the ranks. Sure, we got better at what we did, we might specialise in a certain area, or we might encounter unusual jobs that gave us unique experience, but, fundamentally our core skills remained relevant.

Today, this is being entirely destabilised, with AI and automation promising to take over more of our roles. This is a double-edged sword: we’ll be saved a lot of the repetitive mundane work, but will have to find ways to replace the experience gained from some of the basic work machines can now do, as well as constantly reinvent ourselves, learn continuously and move fast to stay ahead of the machines, always adding value by doing what they can’t.

It is essential that these new skills and capabilities align with the goals of the company. For this to happen, companies need to ensure that everyone is very clear about the business’s vision, goals and plans. Just like my advice to canvass the grassroots of your organisation during the budget process, it’s the people on the ground who know what they need to learn to remain relevant, and happy, in their roles.

Get this right, and then, there will be no doubt that you, and your people, are true assets, constantly appreciating, and continuously adding value in ever-changing times. And never becoming expenses, or worse, liabilities.

Invest in learning
Companies will need to spend some of the gains achieved by digitalisation’s greater efficiencies and productivity on helping their people learn. In the same way that businesses have an imperative to digitalise in order to survive, they have a moral obligation to their people to help them adapt to these changes. During a recession mindset, business leaders might be tempted to save by not investing in ongoing learning. But retraining your people makes good business sense as well. For AI to be effective, it needs to work well with people who can keep shifting to the next area of competency that AI has not yet reached.

As published in ASA Magazine - 21st May 2019