CFO 4.0 - The Future of Finance

248. Automation in Motion: How Finance Keeps Getting Faster and Smarter with Daniel Healey

• Hannah Munro

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In this episode of CFO 4.0, Hannah Munro talks with Daniel Healey, Group FD at Direct Heating Group, about building a finance function that never stands still.

Also covered in this episode:

  • From manual processes to a fully automated, scalable finance team
  • How to prioritise automation projects and prove ROI to stakeholders
  • Overcoming resistance and redefining finance’s value beyond transactions
  • Using automation to free capacity for strategic, value-add work
  •  Why continuous improvement beats perfection in transformation
  • Daniel’s practical tips for starting small and scaling smart with automation

Links mentioned:

SPEAKER_03:

Welcome to CFO 4.0, the future of finance. The CFO role is changing rapidly, moving from cost controller to strategic visionary. And with every change comes opportunity. We are here to help you take advantage of this transition, to win at work, drive your career forwards, and lead with confidence. Join Hannah Monroe, Managing Director of ITAS, a financial transformation consultancy, as she interviews key experts to give you real-world advice and guidance on how to transform your processes, people, and data. Welcome to CFO 4.0, the future of finance.

SPEAKER_04:

So, hello everybody, and welcome to this episode of CFO 4.0. As usual, I am your host, Hanuman Rowe, and with me today is Dan Healy, who is Group Finance Director of the Direct Heating Group, and he was very kind. He let me say Direct Heating Group rather than the longer name. So Dan, just tell us what's the longer name, how uh how others might hear about you guys.

SPEAKER_02:

Oh, we you may have heard from us as Fireplace Warehouse Limited or Flu Inducting Limited. And there's a couple of subsidiaries, but Furries Direct Heating Group is what we go by.

SPEAKER_04:

And and what about yourself, Dan? How did you end up as uh group finance director at at the group?

SPEAKER_02:

Oh, well, um when I left school, I had no idea what I wanted to do. I didn't know what finance was, you know, being an accountant, accountancy practice. Totally did not understand, you know, what that was that involved. So I left school and I knew I wanted to earn some money at the same time as learn. So I did a two-year apprenticeship with the council. That ended and basically applied for anything and everything going. So then I started a training contract at the local practice. That was a fantastic footing for me at that time because um, with it being small practice, we could get involved in everything. So I was doing small sole trader accounts up to tax returns, small limited companies, partnerships, tax returns, and then they also ran VAT. So I said, Well, can I get involved in VAT? So I had a one client who was a farmer, and I drove up to his farm every quarter and grabbed this bag of receipts and bring it back, tip it out on the desk, and it was full of everything pig muck, chicken muck, all over the paperwork. Um and so, yeah, so I did VAT returns there, and he had a payroll department, and I got involved in the payroll department, so I ran payroll for 20, 30 clients there, and I felt like at that time it gave me a real good insight into what finance was, all the elements of it, but I fancied to work working in industry more than in practice. So I'd started my ACCA qualification while I was there, and then hopped into industry, and I had a variety of changes as I moved on through industry, as I was qualifying on my way up and as I was getting experience. So I had a role that was prominently sales ledger and you know credit control, and then I changed to one that was prominently purchase ledger, and then I went into one that was being a financial accountant all the time on qualifying, and then my first kind of role where I could really get my teeth into it was at a small business that did sort of two, three million turnover, but they just put in small accounts teams. So it was myself who led it as a finance manager and as assistant, and basically we had a blank slate because it'd been an owner-managed thing and there was no real script. So that was my first opportunity to really develop a system and develop processes and procedures, and I really, really enjoyed that. So, you know, it was simple things, you know. On one side they didn't have uh expenses forms, but on the other side, you know, we needed to change banks and we needed to set up the account system and the nominal ledgers and all that. So that was really, really interesting, really enjoyed that. Um, but again, I'm qualifying and moving up, so I then moved from there. I went into um an engineering firm, which is where I ended up qualifying at. Um that was really interesting again, but it was a bit more of a um your typical finance role, whereas I kind of wanted to push forwards more into automation and that side of things. So I moved there from there when I was fully qualified and went into my first entity that was with PE as well at that point in time. So yeah, that was that added another dynamic to things working with PE for the first time. Um, I had an enjoyable couple years there, but unfortunately that business was um in a very competitive market. It just gone through COVID, it was a difficult time for the business. Um, and then I left there and then I wound up at Direct Heaton Group, which is about four years ago now.

SPEAKER_04:

And and there is a I I think people underestimate the difference in once you get into that P world, the pace that everything works is the bit that I've always seen.

SPEAKER_02:

Yes, it does shift the gear. Yeah.

SPEAKER_04:

It feels like everything on an accelerator, isn't it, as you make that as you move forward.

SPEAKER_02:

So exactly that. Okay, coming from an owner-managed business where you know if you uh you know someone's taking a holiday or it's been particularly busy this month, you go, well, you know, the management accounts might be a little delayed. Owner-managed business, yeah, totally get it, understand it, but in PE, obviously, they have their shareholders to report to. No, it's you know, your deadlines are enforced, so yeah, it's a bit of a it's a definite shift when you move into that industry. But but for me, I do enjoy that. I do thrive off having that that pressure. I do think some of the best work comes from under pressure, so um yeah, interesting transitions, definitely.

SPEAKER_04:

So you talked about obviously the part of finance that you particularly enjoy is automation. How do you approach thinking through automating processes? We know where where do you start?

SPEAKER_02:

Yeah, so when I came to uh Doubt Heating Group, I came pre-merger basically. So so four months after I joined, there was some private equity that that came in and we merged the whole group, and we were looking at systems that were totally inadequate for doing what they were doing. So I really had a blank slate at that point in time. We had um a product that was capable of dealing with about three million turnover, but it had about ten million turnover going through it, and we had another product that just wasn't set up correctly. So I started really from purchasing the right piece of software, and we looked at a few different products um and then expanded it out from there. Once we got that embedded, it was looking, and and the automation side of things comes from looking at what does your team do? What do they do? You know, they may not realize that we could automate this or not automate that. So there was a colleague who works for me, and I noticed that she was taking an invoice home, you know, every other day. She's taking this invoice home because she needs to check it, and it you know, it takes 20 minutes or so, and she's just not had time. So then I spent some time looking at what what is it that consumes her time that is a you know a transactional kind of repetitive task that doesn't require the same level of concentration as you know checking through this particular invoice. Um, so it's it comes down to spending time with the team and understanding what they do. You can't come in day one, obviously, and automate the process. You need to know what happens and why it happens, why we do it this certain way, and then how we can automate that going forwards.

SPEAKER_04:

And what um and I really liked what you said there about, you know, it's not necessarily about automating the thing that's causing the problem, it's about looking about what are the other things that are easy to automate and prioritizing those first. Because I think sometimes we we get distracted with let's automate the thing that's particularly prominent and in front of us versus actually if we create capacity elsewhere, then that gives more time to those difficult processes.

SPEAKER_02:

Yeah, exactly exactly that. I mean, we you know, as businesses in general are under pressure to deliver more with less, you know. We so looking at those repetitive transactional tasks that we do day in, day out, just because that's the way we've always done it, and that's the way we're always gonna do it, is where what we need to address. So, in this particular scenario, we look at our sales ledger function. This this lady who was taking the invoices home every night to deal with would spend an hour to two hours every morning posting invoices, printing them, posting them to the ledger, exporting them to PDF, emailing them out to the customer's email address that's on his account, and that repeated every single day. Well, that is essentially just a it's a button-clicking exercise. Click the invoice click, post, click, print, click, so we looked at that and designed an automation that would do all that if the dispatch team had dispatched it.

unknown:

Yeah.

SPEAKER_02:

And so the criteria then went if it says dispatched here, do this, do that, do the other, email it off to the client, here's the template that needs to go with it, and done. So that automation run runs every day, all the time, never takes a day off, never breaks down touch wood. And so that this individual now has excess capacity to focus on these value-added tasks and this value creation work in terms of monitoring KPIs and reporting those and and dealing with complex queries and problem solving that we weren't getting an opportunity to do prior to this automation. So, yeah, you've got to sit down with each individual member, and then sometimes I feel a little bit like, well, we've done quite a bit of work in this area, we should look at this other area now and this other area. Um, but automation never finishes. You know, you would I wouldn't install an automation and not revisit that again further down the line.

SPEAKER_04:

And and did you ever get any resistance to because obviously you've taken two hours of that person's work a day. Was there any worry about what that actually meant for their role, the moving forwards?

SPEAKER_02:

Yeah, yeah. I mean, we we have a very the finance team sits in one office and this there's seven of us, so we do have quite a good bit of banter, and there is occasional comments that, you know, I want to replace everybody with robots is the comment that comes up. I don't have to explain, I don't want to do that, but that the your value isn't in clicking this button, clicking that button, and clicking the next button, your value is in problem solving and value, you know, looking at the detail of these KPIs that's going to give management the insight to make decisions for the future that we didn't have the ability to produce before. And so it's about switching people's um mindset. But ultimately, the finance in general is moving down that road in terms of automation and in terms of process improvements and and just being backward-looking transactional team isn't the future of finance. You know, we need to be forward-looking, it needs to be as real-time as possible, which the automation allows, it's real-time invoicing, there's no delay in that so we've got the real-time information to look forwards.

SPEAKER_04:

Yeah, you're you're singing from my hymn sheet. I think we I but I also think there's a bit about if you resist the change, like genuinely, I have this conversation a lot because obviously with AI coming and all of these new developments, there is a worry. But I'm like, if we don't define what the value of finance is now and we don't start working towards it, then someone else is gonna do it for us. And I don't see the point in that. So so you you obviously talked about the team moving to more value add pieces. What are some of the things that they've been able to do now that you've created capacity that they weren't able to get involved in before?

SPEAKER_02:

Oh, well, yeah, I mean, there's lot there's lots of things that we can do now. So we're we're seasonal, so we would find that actually during the winter months our volume can double. Okay, and so actually I've removed some of that stress from the the busy season because our processes are more slicker, so so there's less less stress in the busy period, which I see is a very big value to those individuals. Um, more generally, one of the benefits that we've got of being on this automation pathway and and financial transformation is that I've moved us from being day one when we came into having these old antiquated systems to being right on the front foot now so that when we're talking about strategic business changes, whether that's a new internet, uh new website platform, you know, whether it's new software that plugs into that website that that finance is sat at that table, dictating what we would like as well, rather than being the people who find out afterwards and no sat there saying, Well, actually, it needs to give us this output because you know we're going to automate that into the system and we're gonna you know be able to give you more information out of it. So shifting it forward really puts the whole team collectively on that front foot and more of a a value you know, value-adding department to the business, because we are involved in those kind of discussions now, which won't happen if you leave it, you know, and you sit in the back office.

SPEAKER_04:

Well, I do find and and and I have seen a pattern with a lot of organisations where finance almost gets lumped with the decisions that the rest of the business makes, and then you don't have that influence and capability, like they'll think through the sales process and they'll put in a new CRM, but they won't think through how that impacts us.

SPEAKER_02:

Yes. Yeah. I think in today's day and age, you you know, if if you're um running a finance department, you need to be sat at that table at the front, you know, because everything, if you find out about everything a week later, you know, you you you're always constantly chasing your tail, and it's information you need to know to update forecasts and budgeting and all that kind of stuff. And so we've seen huge benefits to this project that we're now really a strategic player in the business when it comes to these software developments, and we've been able to branch out then and improve what the other teams are doing because we our system and automation's at a level where we can push some other stuff into other departments so we can make their jobs easier because they don't need to do this, that, or the other. Really, it becomes a big web that feeds in.

SPEAKER_04:

So, for me, one of the most important things about any transformation project is the partners that you work with. And whilst I'd love to list off a whole host of reasons why ITAS is the perfect partner for your transformation project, why don't I let our customers do the talking for us?

SPEAKER_01:

One really good thing working with ITAS is it's dramatically reduced my blood pressure. Obviously, an account system is critical to uh anyone's business. So, innovation data, without that, like every company, we couldn't function as a company. So, you know, it's one of the most critical pieces of software, and any sort of vulnerability we have with that sort of keeps you awake at night. And now working with ITAS, I don't have any concerns about our account functionality and our account system and the usability and all of that. Working with previous partners, um, I've got some grey hairs and uh sleepless nights from that, as I say, because it's so critical. So been an absolute pleasure and yeah, long may the relationship continue.

SPEAKER_04:

And you mentioned obviously, with obviously you've got a reputation for, you know, and it and and many many a true word was said in Jess about replacing the team with robots, which I find you know, it's it's it's great that you've got that reputation for wanting things to be automated. I guess, you know, when you first started on this journey, before, you know, now obviously now it's a bit of banter and a bit of a joke, but when you first started on doing that first wave of automations, what was the reaction from your team? You know, was that pushback?

SPEAKER_02:

Yes, uh yeah, there was a bit of pushback. It for some people it's a huge amount of change, you know. Uh especially when you in finance a lot of the processes and procedures are repetitive. So if you're looking at somebody who might have 10, 15, 20 years' experience of doing something in a certain way, because this is the way we do it, that change is is scary for people, is daunting for people. I mean, pre me doing any of this stuff, I also looked at this as being, oh, it's a bit scary that because what does it do? How does it do it? What if it goes wrong? Would we know if it went wrong? Um, so yeah, there's we uh we have open discussions about it in the office, debate how it could work, how it's going to benefit us, and then try and pe bring people on board with that. I'm always explaining, I mean, I'll talk to anyone about what it does and how it does it. Um they just have to ask. So we do speak about it, we do bring people on board with it, and one of the key things for that is that we have a roadmap in the finance team of what we want and how we want to do it. So in in three months' time, you know, we may want to look at improving our credit control with some credit control software. So so it's plotted in a roadmap that I share with the team, and so we know coming up is this, so it's about all about the communication with the team to get them on board, to get their buy-in, you know, they've got a particular task. Um, so that we we've transitioned to some AP software as well. And the two ladies who work on purchase ledger, you know, sifting through paper, printing it off, walking there, walking there, filing it in this, and to explain to them, well, actually, you're not gonna need to do this. You know, you've just been you know stood at the photocopier, printing off a load of things, and now you've had to go to the store room for a file. This is an upside to it, so don't be don't be daunted by the fact that we're going to be using some new software that's gonna be digitally scanning your invoices. Actually, this is a good thing, because it's gonna save you a huge amount of time in doing this, that, and the other, and and take the pressure off when it comes to that month and close. So we have to explain those those upsides to it.

SPEAKER_04:

And and I guess when you were going through because AP is one of the obvious places to do automation, and and certainly, you know, we s we see a lot of that. When you know, what I guess how have you repurposed their time? Have you spent it on actually validating and looking at the you know the data that sits behind your procurement, or where have you sort of reallocated that time to?

SPEAKER_02:

So we we have stock in our in our software, and getting detailed information on those stock items, how much they cost, when they cost, how much they were, um, how many we got in stock is of tremendous value to us. Now, previously, because the volumes were so large of invoices we're processing, we couldn't always collect all of that information through the system. But now we do. So the value creation comes in A, we're collecting huge amounts of information now off our invoices. So there's huge amounts of information going in the system. B, we're now able to do nice quick month-end close, which takes the pressure off people, it gets the information out quicker, and we can then spend more time preparing those uh payment runs for the suppliers dealing with queries in a reasonable time. So queries were always an issue that would get kind of put to the back of the shelf, and then by the time you come in to look at those queries again, it's it's historical information. So being able to catch ourselves up into real time, you know, and then we've been also able to we used to have the role manned by two full-time people, now we have one person and a part-time person do it. So this so there's a cost saving there, and then it's a time saving in being able to deliver everything much quicker, suppliers are happy. So we when I first joined the business, we were given a three-year forecast, this is where we were going to be in three years' time. And so there for me there was no point in looking at that and then thinking, well, I worry about this in three years' time. So I've developed a system now and we're always putting in automations with a view that in X number of years we're going to be doing, you know, 50% more than what we're doing today. So how do we make sure that we got the building blocks in place to cope with it now?

SPEAKER_04:

Yeah.

SPEAKER_02:

So a lot of this will be benefits today, but we'll deliver more benefits over time. As we throw more volume through it, we can cope with it and we can be better positioned for that future growth.

SPEAKER_04:

Yeah, and I guess you're building in so you're not only building in, you know, the ability to cope with the seasonality, which is obviously a challenge in your industry and that going up and down. Um you're building in the scalability, so because you've got this plan to grow as well.

SPEAKER_02:

Yeah, that's it. So when I came, we could have easily continued doing what we were doing because that's what we'd always done, and just wait for the growth to come. Um, but nowhere to build a system that could cope with it because there's a you know, for me, I don't want to be the bottleneck to growth. You know, I don't want to say, oh, we need to dial back on this advertising or we need to just slow down here because we can't keep up. No, we need to make sure that bottleneck is, you know, dealt with and isn't going to be an issue for us. So I think you should always be focusing on some of a some of the benefit that you're gonna see today from this software, but B, the benefit you're gonna see in the future, and the fact that we're not gonna be tripping ourselves up and the fact that we are gonna be able to cope with future demand and future growth. So you should always have that in the back of your mind when you're designing a system. Yes, it may save us three or four hours a week. This today, but it will also save us six, seven hours a week in three years' time when you know we're doing more than what we're doing today.

SPEAKER_04:

And and how much like how much buy-in have you got from the wider organization from uh like do you have to justify or each of the automations, or do they pretty much let you get on with just doing these now?

SPEAKER_02:

Well, yeah, the the two of the directors, Adam O'Reilly, they're fantastically supportive of me. So when I came in on day one, we knew we had two systems that were terrible. And so actually they'd never had any investment in them at that point in time. So for me to suddenly go, Well, actually, we need this and we need this, I needed quite a lot of buy-in from them to do that.

SPEAKER_04:

Yeah.

SPEAKER_02:

And equally, you know, the PE was on board with as well. Although this is what I've scenario's word actually, the PE was very helpful because they knew what good looked like and where we should be with it. So I had a good amount of buy-in from them that at that stage, once we got the system set up, I'm just appraising each automation and each plug-in on a case-by-case basis, and it's very easy to prove the value for them. So we do, you know, 20,000, 25,000 purchase invoices a year. So to prove the value of adding in an automation that might help with that or an AP software, you know, if you're saving yourself a minute per invoice times by 20,000, 25,000 invoices, you know, that that really adds up. So we appraise each one as we go. Some of what we do as well, but with it being totally bespoke, so the automations, for example, are not a product off the shelf, but it's a it's a development that we've paid for, developers' time and had it written. Some of that qualifies to be um an intangible asset as well, because it's quantifiable, we control it, we know the cost of it, and it's expected to deliver future economic benefits. So some of that we can capitalise, and so actually, at the same time as building this system that's really, really good, we're also building an intangible asset, you know, an increase in the balance sheet value as well at the same time. So, yeah, I've got a huge amount of um backing to deliver, the trust that what we're doing is going to be adding value to the business. And once that initial big project of changing software is done and you've got the big cost in, the bolt-ons are a lot easier to appraise on a case-by-case basis.

SPEAKER_04:

Yeah. And and I think that goes back to your piece about you're never really done with automation. You're always picking like the next thing to focus on because there's always there is, and you know, you're always getting new features, new capabilities that you could be taking advantage of. So I guess how do you decide what to prioritize? What do you look at? Because it it sounds like you're really and your team are really invested in making things as efficient as possible, but it must feel a bit like a kid in a sweetie shop sometimes, where you've got all of these things you could do.

SPEAKER_02:

Oh, yeah.

SPEAKER_04:

How do you look at what you should do?

SPEAKER_02:

Definitely kid in a sweetie shop. So we recently went to an event and there was all these software providers there, and I was going around writing all of them down in my book, going, Oh, we need this, and we definitely need that, and I love the sound of this one. How do we prioritize that? That is a very good question. Um the the bottleneck is evident on a month-end close, I think. Yeah. You come to your month-end close, and which is it purchase ledger, is it sales ledger, is it the management account, where does that bottleneck sit? And so that really is a good place to look to decide, okay, this this might need a high priority because we could save ourselves three, four, five days on a month-end close with that. Equally, we're looking at debtor days, creditor days, stock days. Okay, is there anything slipping out there that actually we could do with improving? If our debtor days are slowly creeping out, okay, we might need some assistance in that area that might help us with you know an automation, like I say, that raises these sales invoices and gets them straight out, or maybe we need a credit control software that's going to aid us in automating reminders and you know, statements and that kind of thing. So I weigh them up on that basis, discuss them in the office. Does anyone have a particular preference? Maybe, you know, it's a very open door, uh open door meeting, we can all make suggestions. So, you know, who who needs a bit of help in an area? So who's making the most noise could also be it. You know, so last year we sat down with someone who's you know making a bit of noise, and when I looked, we was clicking this, clicking that, clicking the other, clicking, okay, well, we can do something about this pretty quickly.

SPEAKER_04:

Yeah.

SPEAKER_02:

So there's a variety of factors, but yeah, definitely a kid in a sweet shop because there's so many good products there at the minute, and you'll put one in that that was good today, but in 12 months' time you may need another one that's you know a bit better than that. But yeah, in terms of automations, we we do revisit them all the time because you will we'll be importing in sales in one way and we'll go revision. Would it be really good if we could split discounts out and post them somewhere else? So we revisit again. I think our sales automation, we've revisited that about four times. Because you I could never have designed what it is today on day one.

SPEAKER_04:

Yeah. You just don't know enough, do you?

SPEAKER_02:

No, I think it's that. Um I liked Facebook's motto when they first started, which was um move fast and break stuff. I think it was move fast and break stuff, isn't it? Um and if you're not moving fast enough, if you're not breaking stuff, you're not moving fast enough, basically. So so yeah, we we just we'll look at an automation and we'll try and get it in, try and get it working, and then come back and do a bit of snagging afterwards with it.

SPEAKER_04:

Yeah, and I think that's the scary that's the bit that puts off a lot of people is they they worry they're gonna break stuff. But actually, it's genuinely how you learn. When you put in a an approach a new process and automation, as long as you're monitoring it and it once you catch the issues, then actually you've got a much better solution than if you've sort of spent three years designing it and never actually put it in.

SPEAKER_02:

Yeah, I I agree with that. I think if we'd not, if we didn't move fast with this approach, we probably wouldn't be where we are today. You know, you we're never gonna get it right when we first think of something, or we first think, will this software work, or that one work, or will can we automate this and can we have the you know commands doing this and posting it here and posting it there? You I'd have never been able to write it down on a piece of paper day one. So let's get it, get it 90% accurate, plug it in, and let's just address it over the next week as we see things and and fix them. So that certainly has worked well for me, you know, it evolving that system, and then we revisit the integrations further down the line and go actually maybe it should just do this or just do that, or it's got a fail-safe where it only looks back so far, and little pieces like that.

SPEAKER_04:

And when you've like when you've obviously you've put in a number of automations and you've kind of got a reputation within the organization for that sort of automation, increasing productivity. What's been the perception, I guess, from the private equity house when you when you've done this? Have you had any commentary around what you've done and how you've done it?

SPEAKER_02:

Yeah, I think I think in the early stages it it's very difficult to articulate what you're doing because there's quite a lot of groundwork that goes in at that point. So at that point in time, you can spend a huge amount of time putting a new piece of software in, you know, transitioning from one software package to another, that does take a lot of time and really doesn't deliver any shiny benefits that you can see straight on the face of it. You're now just typing invoices into a different system. The further down that line you get. You start to get better outputs from the system because it's about getting the good information in. So you have to spend quite a while doing that, but then you can get the nice KPI dashboards that you can get designed and out output. And then you can, you know, within seconds give them information on top selling products and what the GP is on it. And so it's a bit further down the line that you actually see the benefits of what you've done there. Um and then obviously you can demonstrate that in saying, Well, you know, some of the automation we've done, our debt today have reduced by around four days per month. That's you know, that's the type of statistic that you know we like in the board meetings. So yeah, I think the back end of the project is where you see a lot of the benefit. Up front, quite a lot of hard work, and then as it, you know, your core of data and your core of team is they're used to using it and use it in the right way, you then get a lot of benefits out of the back end of it by putting in place little tweaks here and little tweaks there that deliver huge benefits.

SPEAKER_04:

And you've made two interesting comments there. I think the first one is not to think that you're gonna get all of the automation in the first wave. Because that is a genuine, I think a lot of people think we're just by putting a new system in, we're automatically gonna automate everything and do that. But actually what you're saying it's the lift and shift, getting onto that new platform, and then you need to think about right from there, where do we go now in terms of automation and improvements?

SPEAKER_02:

Yeah, there's a there's a huge I mean, I don't think anyone thinks switching accountancy system is an easy task, but there's a huge amount involved in that, and then embedding that in you know, there's lots of differences between software and so getting people used to that, getting that set up, working out what information the new system can take. You know, we never used to record individual products, now we can, now we can split out carriage discounts, we can split them out. And so kind of getting used to that, and then you don't have any usable data in that format for at least 12 months. There's no way you can do a look back to what what how many of these did we purchase last year, or or what was the GP. You so there's a huge, you know, you need 12 months to 24 months to end up with a catalogue of usable data in that format. So the huge upfront work there, perhaps quite a lot of hard work with probably a little less credit than you get at the end when you can bolt on then all the bits and pieces that really support the software. There's perhaps less effort, but you get more credit for because you know the quality of data that's already in the system. Um, so yeah, you've got to persevere with it.

SPEAKER_04:

I think I think that's a really good point. And and I also noticed that you're it seems like you're pretty good at identifying the benefits of the system as well. You know, you're talking about here are the key KPIs and this is how we've impacted, we've reduced month end by this many days or decided by this. So and I think that's that's I think I think in finance we can be a little bit um we can hold ourselves back from actually shouting about what we've achieved. I think it's more you hear it more in other areas, don't you, where they they yell about the great things they do. But finance, we are like, oh, this is just expected of us, rather than actually you you you you've re obviously identified the benefits and you're talking about those in the board meetings.

SPEAKER_02:

Yeah, yeah. I think it's important when we do the board meetings, you know, we carve out a section just for finance, what have we been doing this month? And so that then gives me the I suppose the pressure to have something to talk about in the next board meeting, which then gives me the pressure to think, right, we need to change something this month, what are we gonna change? What's the benefit of it? I think it's very easy for anyone and I've been the same to we'll we'll do something next month, we'll we'll think about it next quarter, we'll put something in place. But actually a couple of years ago I kind of set a you know New Year's resolution, if you like, to say every month I'm going to think of something. There'll be something we can do because if I'm still doing the same thing this month that I did 12 months ago, we've not moved on, we've not evolved, we've not changed, everything else is changing. You go to any of these uh exhibition shows where they're talking about new software, everything's changing at a rapid pace. If we're not, we're gonna end up, you know, in the history box. So we're always I'm always looking for something, and so having having that little bit of pressure to think, right, we need to talk about something, we need to do something, what can we demonstrate here? Actually, you know, there's always something going on.

SPEAKER_04:

And obviously, P is known for you know throwing like reporting requirements on you at the drop of a hat and and asking for all sorts. How do you find the balance between delivering on those things plus obviously the business usual plus all this automation work? Like, how do you find the balance?

SPEAKER_02:

Um at the start it was very difficult because you know you're doing a tremendous amount of work here, and I was always hesitant to um you know ask for help, I think was one of the kind of things in the early days. I didn't really want to ask for help, and then it came to a point where I said, look, we we need another person in the team, and we need them at this level, and and this is what they need to deliver. So so I asked for some help. We we employed that person, built the team out, and I've seen tremendous benefits from doing that. Juggling the requirements then becomes a little easier because you have some more capacity to deal with it, um, and the system is geared to do that because we've been working with this PE house for nearly four years. We know exactly what it is they're gonna be asking for, so we can develop the software, um, develop the reporting to deliver what we're after. So it's always a little bit difficult, I think. You know, if you don't have the information to hand in a board meeting, you can follow up with it and then go away and very quickly work on that information. Um but I think that will always be there's always curveballs, doesn't matter whether it's you know, PE or just a normal director or the bank, someone will ask for a piece of information that you don't have, that you don't you'll have to go away and get that.

SPEAKER_04:

And and when you look back on obviously the last couple of years, where's been your biggest challenge? What's been the hardest thing about going down this automation route?

SPEAKER_02:

Oh the hardest thing about going down the automation route is um thinking what you need to automate. I think was the difficult thing. What what do we need? Because well the system that we're doing at the minute works. Okay, it might be a bit on-winded, but it works. So, you know, thinking of automation, how can we do things different and driving that? So you really need to get get yourself some revo resources that are giving you that information. It's reading technical articles, press releases, listening to podcasts, going to events, just speaking to other finance directors and CFOs and and people in the profession and hearing their stories and what are they working, and then you come away with it and you actually this is the thing I need to I need to look at this thing, this is the next big thing. And that's always difficult because you could just off the shelf do this, that, or the other. A lot of what we've wrote is very bespoke because actually we want it this way because of that thing or the other thing, and we need to collect this information because we want to know exactly how much money we're giving away on discounts and who's using it, and so getting the inspiration I think sometimes can be a little difficult. And if you're not somebody who goes out to the events and goes see the cinema seminars and reads the reports, you're probably not picking that up so much.

SPEAKER_04:

So I think Yeah, getting the inspiration in the first instance.

SPEAKER_02:

It is, yeah. I think as you you know, as you progress to to become an FD or a the head of finance CFO, your interaction with other FDs I've found reduces a little bit. But actually, if you you know you're um working in the team, you've obviously got interaction there with the rest of your team members.

SPEAKER_04:

But it I think it's really true, actually having the opportunity and it to be honest, it's one of the reasons I started the podcast is that I think as you get higher up and you start having different conversations, right? You're in different roles. It's harder to find the time and the the places to actually listen and meet other FDs and other CFOs because everyone is so busy. They don't have no, you know, it's like do you do do you go spend an entire day event or do you spend all that entire day building out a forecast? You know, it it can be hard sometimes to justify the benefit of actually going out and doing that.

SPEAKER_02:

Yeah, yeah, I agree. And there was you know a period of time where I when I was in that boat and not getting out there and not visiting people and not seeing you know what's going on in the industry, but actually there's a tremendous amount of value that comes from that.

SPEAKER_04:

Yeah.

SPEAKER_02:

Really opens doors, really opens your eyes as to what you can be doing and gives me at least a lot of motivation and a lot of enthusiasm to come back and implement some of these things and look at it. Um, because you'd be surprised what you can do in the system and how you efficient you can make it, and you know it's the benefits to staff and you in terms of morale improve because actually there's a bit of investment going here into what I do as a day job. Someone's recognised that my day job is a bit difficult or a bit time consuming, they've invested in it. Well, that makes them more motivated, it makes the systems better, so retention of staff is better. And then if you did need to recruit, well, look at us, we've got these good bits of software, and it's going to save you this amount of time. You could come play with our new toys, you know, it makes that whole kind of package uh more appealing. Um, yeah, to kind of invest in the team and invest in the department is refreshing from places I've been before where we've not done that.

SPEAKER_04:

Yeah, and and and when you think about the cost of recruitment, the cost of training, the cost of actually bringing on somebody new, as in the resource they take, if you can not do that more than once, then you're saving yourself a huge amount of effort. It's when when I started building out my ROI models, that was the one thing I focused on because I think we underestimate how negatively turnover impacts us as organisations.

SPEAKER_02:

Yeah, there's there's a lot of hidden costs in that that you don't realise. Time, CV sifting, all of that. So yeah, if you can invest in the systems, which in turn return makes the employees more feel more valued and improves retention, then there is all those costs which you necessarily wouldn't write down in an appraisal paper for why you should buy it, but but they exist. They definitely exist.

SPEAKER_04:

And and when you if you had to give somebody a um some top tips on how to start their automation journey, maybe they've put in a new system and they're going, actually, yeah, we're not getting as much value out of this system than we thought. What would be your advice?

SPEAKER_02:

I think I think everyone can go away and do some automation in their software. And it doesn't have to be a big shiny piece of AI software that costs the earth. Because actually, in quite a lot of scenarios, you might not need an AI piece of software. You may just need a nice normal automation piece of software. It can be the simplest things that deliver the biggest benefits to you. So you shouldn't be put off or daunted by that side of things. There's very simple things you can do that we've seen big benefits from that are just built into the software. So if you've got bank feeds and you've not set them up, well you should go ahead and set your bank feeds up and set some rules because that's going to save you a huge amount of time. If you're issuing out invoices, you can put a little pay now button on your invoice. That's not a big integration, but that saves a huge amount of time. Better customer journey experience. You know, you can integrate your card merchant into your software. So you can be sat on the customer's account and you could take a card payment right there in your software and it posts it straight to the ledger. There's lots of little bits of automations you can do without having to do a huge big project. So I think for anyone who's struggling on something like that, it's to just start small and build it from there. You know, everyone can go away and do those three things in their software without too much trouble, you know, over the next week. And then you start to, okay, well, now I do this, this is the next bit of a bottleneck, and then this is the next one. So that's how I kind of look at it. There's lots of different bits you can do, but just make a small bite-sized piece first. Dip your toe in the water, see how it works, and then go from there.

SPEAKER_04:

I think that's a really great. We like I I call it the change snowball. That's my favourite phrase to use, is that you just need to start scrolling. Once you create the momentum for change, it becomes so much easier. But you need that first like push off the top of the hill to get you rolling.

SPEAKER_02:

Absolutely. Absolutely. You'll start with you know having a recurring journal for your accruals, and then before you know it, you're onto banks needs and then you're onto this, you're onto that, you're onto the other snowball like that, and then you'll look at a month and you go, I've not got anything planned this next month. What what what can we put in here that's gonna help us out? Uh yeah, it never ends, and you've got to be thinking of that end road. You know, if you plan for growth because your sales director is gonna be planning for growth, and so's your ops director, and you so you need to do the same thing, and you need to have you know automations being in put in place today and designed, you know, and add-ons that are gonna help because there's lots of add-ons you can put into your software. It's not an automation, it's just a an enhancement pack, you know. But that enhancement pack gives you all these features which also save you a second here, two seconds there, three seconds here, adds up very, very quickly.

SPEAKER_04:

And I think that whole point about getting ahead of the change, because I see so many finance teams that that don't plan ahead, so they don't try and create capacity, you know, to follow where their sales team or their managing director's going. And then they're in a place where it's a lot harder to make that shift because they're coping with that additional volume.

SPEAKER_02:

Absolutely.

SPEAKER_04:

When they've not got the the automations and the systems to support it. So then it costs so much more to put it in later on than it does well, you know, as you're going along.

SPEAKER_02:

Absolutely. Yeah, when I came in and and what side of the business had this software that was way under capacity for the volume going through it. We then bounced straight into an audit and we were stuck because it just wasn't the right software for doing it. We couldn't get the right information out, so we did have to work through that and then go right, well, we're not having that again. Well, we know you know we need to we need to do things this way because that's the way it's gonna be. We need a better piece of software, we need this, you know, sales orders feeding in in this way and completing at that point in time, and so yeah, definitely the wrong way around to be, you know, get but you've got to get that buy-in from the rest of the board early doors to say, look, this is where we need to be. If you're planning for growth and you're planning for growth, I need two as well. And this is the tool that I need to get there.

SPEAKER_04:

I think that's a really great shout. So if you know, if your organization has big growth ambitions, you need to be thinking now how you're gonna be ready for those great ambitions in two, three years. Because it's it's what if you're doing it in two or three years, you're already too late. That's the reality.

SPEAKER_02:

Yeah, a hundred percent. Yeah, and so you know, and some of this stuff is not expensive, but there's lots of little products out there that will that will help. So yeah, you've definitely got to be on the front foot with it.

SPEAKER_04:

So um we have we have talked longer than we really should have, but it's been such a great conversation, Dan. Thank you so much for joining me on the podcast. Um, so if you want to learn more about the organization um and what you guys do, where is the best place to find you?

SPEAKER_02:

Well, I'm on LinkedIn, so you can search for Daniel Healy on LinkedIn. We've got a LinkedIn page called the Direct Heating Group. And then we have a couple of websites. So we've got Direct Fireplaces, Direct Stoves, and we've got Flu Inducting. So if you want to check us out on any of those, feel free. Or if you need to uh speak to me for any reason, you want a bit of inspiration, you can reach out. I'm more than happy to message anyone back.

SPEAKER_04:

Amazing. Well, thank you so much, Dan. Really appreciate your your in your inspiration for for those out there that are struggling with where to start. It's been a really great conversation. So thank you so much.

SPEAKER_02:

Yeah, thank you very much.

SPEAKER_04:

So, for all of our listeners, if you have enjoyed this episode, um then please do le uh leave us a review, send me a message. Um always looking for ideas and thoughts on new episodes. Um, and of course, a big thanks to Dan for joining me on the show, and we'll see you next time on the CFO 44 podcast.

SPEAKER_00:

Hey Google, what's the best accounting software for my business? Give it a couple of years, and I bet you she'll be able to answer you pretty accurately. But for now, it's still one of the few questions Google can't give you an answer for. But we can. Take our free quiz and find out which Sage products is the right fit for your business. Just head to itsolutions.co.uk.

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