Optimizing Technology in Financial Management

Posted on June 10, 2010 by

Clayton & Mckervey

Clayton & McKervey

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CFOs, controllers, and business owners recently gathered to discuss approaches and technological resources successfully used by financial executives. What works? What challenges might be addressed by technology? What is “cloud computing”? Summarized below are key points of conversation. While many products and vendors are named, our intention is not for promotional purposes, but to cite resources suggested by attendees.

Cloud Computing in Finance

Much of the discussion related to Cloud Computing (a.k.a. “software as a service,” “SaaS,” or “on-demand”), which is a new way to access, use, and pay for a wide range of business support systems. It has quickly become an extremely popular and accepted model globally and offers many advantages.

Cloud computing offers the promise of business systems that:

  • Are always up to date
  • Are always available, easy to deploy, and accessible anywhere
  • Are quick to set up and integrate
  • Need only minimal in-house IT infrastructure and support

Cloud computing applications are generally priced on a subscription model – so customers may pay a monthly or annual usage fee rather than the more established model of purchasing software to run in-house.

Today’s financial executives reported using cloud computing to access a number of web-based services that enable teams to gather, share, and manage critical business information. One example is to outsource the exchange server for e-mail. QuickBooks online is another example, where multi-user capability, robust software, cost effectiveness, and the ability to use the software anywhere are advantages. One attendee suggested Intuit QuickBase. This online database allows the user to modify, share, and manage data and documents with this web-based data-sharing program. The attendee used it for opportunity management on the sales side and project management on the consulting side. Systems such as these provide a knowledge base for correspondence on engagements, have web applications, operate in real time, and can be accessed anywhere.

Back-Up System Solutions

Online back up IT systems for data being used are Carbonite and Mozy. Services such as these back up irreplaceable files, e-mails, business contacts, and financials. They offer peace of mind and automatic and secure back up of company data.

Downtime due to power outages or other disasters is always a concern; this can be overcome using laptops and a remote disaster recovery service. One suggestion was to be mindful of using an Internet security provider to assure data is secure.

Payroll and HR Solutions

Attendees are also using independent providers of online payroll services and HR solutions. These providers combine the flexibility and control of an in-house package with the time and money savings associated with an outsourcing solution. Benefits include cost savings and the ability to be paperless.

One such provider, Paylocity, is used by one attendee who reported superior reporting and improved information. Plex, a web based ERP system, collects and processes payroll data online, and then converts it into a format suitable for a payroll service such as ADP or a third party payroll package. This system was noted as one that an attendee is using successfully in a manufacturing environment.

Meeting Solutions

To reduce the costs of travel by employees, several online meeting solutions were discussed. These resources can combine real-time desktop sharing with phone and video conferencing. One attendee finds it is far more productive than e-mailing files and struggling to get everyone on the same page over the phone. Examples include WebEx and omNovia for phone and video conferencing. One observation was that while there is a definite cost saving, the usage of the system can become expensive. Dim Dim is another resource, and offers a free trial. One attendee’s company invested in Vidyo equipment, business video conferencing systems and software, and reported that while the hardware purchase can be expensive, the cost was offset by the reduction in employee travel costs. The quality for meetings is very good, and multiple webcams and presentations can be viewed simultaneously. Bandwidth has been an issue and the attendee also noted that the costs of hardware for systems with these capabilities are dropping, so shop around.

In answer to the question, “Is migrating to an outside source reversible?” the advice was to migrate systems in stages, test, and evaluate the vendor at each phase, and keep some of the soft cost of internal IT in house.

To access desktops from remote locations, and were suggested as web resources. These are good alternatives for employees who travel. Costs are minimal for these web services, and both offer free trials.

Employee Fraud Solutions

Fraud is an ongoing concern of all attendees. Several discussed their experiences with fraud and noted it is advisable to work with sophisticated tools such as Positive Pay and Positive Payee.

Positive Pay is an automated fraud detection tool offered by the Cash Management Department of most banks. In its simplest form, it is a service that matches the account number, check number, and dollar amount of each check presented for payment against a list of checks previously authorized and issued by the company. All three components of the check must match exactly or it will not pay.

Positive Pay requires the company to send (transmit) a file of issued checks to the bank each day checks are written. When those issued checks are presented for payment at the bank, they are compared electronically against the list of transmitted checks. The check-issue file sent to the bank contains the check number, account number, issue date, and dollar amount. Sometimes the payee name is included, but is not part of the matching service.

When a check is presented that does not have a “match” in the file, it becomes an “exception item.” The bank notifies the client and the client instructs the bank to pay or return the check.

There is generally a fee charged by the bank for Positive Pay, although some banks now offer the service for free. The fee might well be considered an “insurance premium” to help avoid losses from check fraud.

Another resource, Positive Payee, has the ability to review the Payee name on the “Pay to the Order Of” or “Payable to” portion of commercial checks. The payee name is compared against the file submitted, and exceptions are reported back. Positive Payee adds the fraud protection ability to assure payees are recognized, and allows the user to set parameters for payees.


One common theme from today’s discussion, “everything is headed to web based systems,” means change in the way businesses use technology. All attendees are at varying stages of changing to these new technologies. We still need to deal with the fear and risk associated with allowing others to have access and control of our data. Managing this type of change will be a challenge. Cost savings, ease of use and virtual accessibility, and superior reporting are among the many advantages of the inevitable change over to web based systems. Cloud computing is here to stay.

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