{"id":17855,"date":"2023-04-10T05:53:08","date_gmt":"2023-04-10T09:53:08","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=17855"},"modified":"2023-04-04T06:07:36","modified_gmt":"2023-04-04T10:07:36","slug":"how-better-automation-and-integration-increases-revenue-and-margin","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/how-better-automation-and-integration-increases-revenue-and-margin\/","title":{"rendered":"How better automation and integration increases revenue and margin"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tTechnology & Innovation<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tHow better automation and integration increases revenue and margin\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Bill\t\t\t\tBill Fuesz<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

The value of increased revenue and margin can\u2019t be overstated. Improved profitability and financial performance help ensure the stability and security of any business, even in an economic downturn. More revenue and higher margins improve competitiveness and market position. Companies can increase their net promoter scores, reduce customer churn and find more cross-sell and upsell opportunities, and reduce time to market.<\/p>\n\n\n\n

There are a variety of ways to improve revenue and margin, including price increases, reducing waste and inefficiencies in the supply chain, and adding new strategic partners. One of the paths to improved revenue and margin runs through automation and integration.<\/p>\n\n\n\n

In its recent report The Total Economic Impact<\/em>\u2122 of Sage Intacct<\/em>,<\/a> Forrester quantified the impact of automation and integration and how these affect revenue and margins. Let\u2019s walk through the methodology it used to produce a real dollar figure.<\/p>\n\n\n\n

Forrester interviewed four customers with experience using Sage Intacct. For the purposes of their study, Forrester aggregated the interviewees\u2019 experiences and combined the results into a single composite organization, a technology services company, headquartered in North America with global operations. The composite generates $30 million in annual revenue, has 100 employees, and grows 20% annually via acquisitions during the three-year TEI analysis period.<\/p>\n\n\n\n

The four interviewed organizations said that, prior to Sage Intacct, their accounting and financial systems were disjointed, complex and problematic. The financial processes resided across multiple platforms, such as enterprise legacy systems, bookkeeping software, spreadsheets and other applications. These systems included Oracle NetSuite and QuickBooks.<\/p>\n\n\n\n

Due to lack of system consolidation and automation, the organizations used laborious manual processes to bridge data gaps, often requiring additional labor to perform maintenance tasks, such as replicating the data in prior legacy and third-party software solutions or tracking contracts and invoices in individual spreadsheets.<\/p>\n\n\n\n

After the investment in Sage Intacct, the interviewees acquired visibility into their organizations\u2019 financial performance and had confidence in their numbers due to the platform\u2019s real-time data. They gained financial insights and the ability to slice and dice the data, drill down on numbers, and isolate any issues with a particular number, which they could not do in their previous environments.<\/p>\n\n\n\n

With this, Forrester calculated a $598,500 total three-year margin benefit gained due to improved automation and billing, with a present value of $496,127. Let\u2019s look at the details.<\/p>\n\n\n\n

Evidence and data<\/h2>\n\n\n\n

In their previous environment, to sustain their high growth, interviewees said they had to hire additional personnel as the numbers of customers, orders, and transactions grew rapidly and started putting strain on their internal resources to cope with the redundancy in tasks. <\/p>\n\n\n\n

Sage Intacct offered improved integration and visibility across all the data platforms and eliminated tedious and time-consuming manual processes. The interviewees were able to access and analyze the data in real time without needing to increase headcount. The CFO at a cloud software and services organization noted: \u201cWe find ways to get more efficient almost every month as we refine our solution within the environment. As a result, there\u2019s no one on the hiring plan from an accounting standpoint in the foreseeable future because we think we can still scale quite a bit without adding more staff.\u201d<\/p>\n\n\n\n

The growth of interviewees\u2019 organizations was mostly sustained through acquisitions, so their numbers came under severe scrutiny from investors. Data accuracy, proper revenue recognition at the invoice level according to GAAP standards and multiple-entity detailed reporting were crucial to successful growth.<\/p>\n\n\n\n

In prior systems, interviewees required additional finance team members to compute revenue-recognition allocations. Sage Intacct\u2019s automated real-time accounting processes addressed GAAP requirements and eliminated the need to hire additional headcount.<\/p>\n\n\n\n

Interviewees whose organizations migrated from a bookkeeping solution to Sage Intacct replaced their external CPA at a cost of $15,000 to $20,000 per month with an internal accounting specialist earning a base salary of $38,000 per year. The CFO at an insurance company commented, \u201cYou\u2019re paying a higher-level resource because of the complexities that were introduced unnecessarily.\u201d<\/p>\n\n\n\n

Modelling and assumptions<\/h2>\n\n\n\n

Based on customer interviews, the composite organization assumes the following:<\/p>\n\n\n\n