The ‘back office’ is a phrase that I’ve never really liked, or understood. It’s a phrase that would probably send my 14 year old self into immature fits of giggles! I always thought the back office is where you might find folks that just can’t bear conversations with the public or struggle to communicate naturally with colleagues. However, as my corporate life has evolved and I’ve gathered experience, I’ve realised that this couldn’t be further from the truth.
This is especially true in finance. The qualities and skills of a Credit Controller, Credit Risk Analyst or Accounts Payable Specialist, require just as much ‘front office’ skills and knowledge as someone in sales or customer service…yet they are deemed to work in the ‘back office’?
Some aspect of this is down to outdated views but some, I believe, is down to the technology that is used – or lack of it. If you’re a senior manager/director in finance then why invest in a function that you feel is a direct impact your margin? The reason why is exactly that, by not valuing it or investing in it, it’s being left behind in a myriad of mundane tasks. A recent study of B2B midmarket companies found that 53% still use spreadsheets to manage their accounts receivables.
This inevitably results in;
- Manual errors
- No traceability or accountability
- Low employee and team morale
- Fewer value-add conversations or activities
In fact, the lack of technology is severely impacting the balance sheet more than finance leaders realise. According to PWC, $1.5 trillion dollars of working capital is tied up in un-collected receivables, enough to boost capital investment by over 50%. Add to that, the impact of a marketing leading receivables platform has on DSO reduction, bad debt provision and un-applied cash. The downstream effect of automation in these areas is not only on financial performance, it also makes its way to the end customer, ensuring a better service and experience.
So whether it’s front or back office, let’s think about it in more simple terms. Invest in your people, giving them the tools they need to do their job and more purpose and a feeling of contributing to success. The positive impact on your financial performance will be inevitable and invaluable.