Why Do I Need a Facebook for Finance?
Do you have doubts about the “Social Media for the Enterprise” hype?
Do you think Social Accounting is an oxymoron and there is no room for a Facebook in Finance? Do you fear your people will be playing around in yet another social media application and not getting the real work done?
While some accounting and finance teams may be skeptical of the latest hype from Silicon Valley, “social” is already spreading to the enterprise as it has in the consumer world, with significant impact on how we do business. However, accounting is lagging behind. In the 2010 Social Business Report by NetProspex, finance ranked lowest for use of social media among all corporate job functions. It only beat out the maintenance department.
When we look at the practical application of social media, we’ll realize it may be just what we need to increase efficiencies and collaboration, while making accounting a more vital part of the business.
The Shift to Social
Within the pervasive “social” landscape there are three dynamics at play: changing online behavior, the evolving make-up of accounting departments, and technology innovation.
First off, social media continues to grow in popularity. According to the latest Nielsen findings, social networks and blogs reach nearly 80 percent of active U.S. Internet users; they represent the majority of Americans’ time online (22.5 percent), far surpassing email use (7.6 percent).
Americans also spend more time on Facebook than on any other U.S. Web site (“State of the Media: The Social Media Report – Q3 2011”). The new generation entering the workforce expects this same constant interaction via social channels when they’re on the job.
Second, accounting and finance teams have changed over the years. Home workers, temp workers, smaller teams, use of more specialists and the need to work more closely with external CPAs have contributed to a trend toward virtual teams that need new ways to engage across departments and geographies.
Teamwork and collaboration are no longer goals, but requirements. On top of that, controllers and CFOs want to be more integral to the business: a trusted advisor to the lines of business rather than an isolated department. Today’s lean and agile companies need new ways to break down the walls between siloed departments and leverage the finance department’s skill sets.
Lastly, the espousal of cloud computing has set the technology groundwork for social accounting to succeed. Cloud-based applications, like those built on the proven Force.com platform, create a cost-effective, efficient way to centralize and share data, increase visibility into accounts and improve collaboration.
To be clear, “Reply All” is not collaboration and email is no longer the most effective communication medium. Social media technologies made specifically for business have arrived just in time to help finance teams take on a more visible and collaborative role in their companies.
Putting the Social in Accounting
Finance teams have been working “socially” for years, but they’re doing it the hard way – staying up to date with different teams through conference calls, Skype, emails and IM. Such sequential, one-on-one communication isn’t broadcast to everyone who needs to know and leads to slow approval cycles. It’s out of step with the younger Facebook generation, and doesn’t provide the necessary audit trails and audit backup that corporations require.
Enter social communication for business, which comprises real-time interactions, personal profiles, company-wide groups, private groups and messages, and chat streams – set in the context of business information. With tools like Chatter, a Facebook-like app from salesforce.com that’s embedded directly into cloud-based accounting and CRM applications, all relevant history, documents and conversations are attached to the accounts and accounting records, creating an instant audit trail pertaining to a business situation or event. The conversations are embedded with journal entries, invoices, accounts, etc. They are not lost in email or someone’s memory of a long ago conference call. This is like having Facebook inside your accounting application, but with a corporate twist.
Consider some examples of what accounting and finance teams can do with social media tools:
• Accounting becomes a part of the business – Follow sales people and Chatter streams on big deals in the works, then suggest ways to structure a deal financially to help sales win business.
• Automatic knowledge sharing – Create hashtag subject groups (those # symbols you see on Twitter) around common interests, such as #PeriodClose or #CashFlowGroup.
• Instant audit trail and audit backup without looking anywhere – Attach Chatter streams to significant events and accounting entries. e.g., the write-off account. Chatter conversations about write-off become part of your accounting audit trail without relying on a separate tool like email.
• Aligned teams, shared knowledge, lower DSO – The financial application itself can create Chatter streams to begin a conversation and bring an issue to the surface, such as “Account ABC is over 60 days due.” This notifies all stakeholders (e.g. sales, service and finance) and allows finance to get help from sales in collecting from the customer.
• Faster period closes – Have the system create a Chatter stream when invoice or expense approvals are delayed. This makes managers aware of bottlenecks and helps reduce time from the period close cycle.
As the social media scientists say, tools like Chatter can increase the ‘ambient awareness’ of your company. That might be a little too touchy-feely for the finance department. But what it means is that you are bridging the gap between departments so that anyone who needs to be involved in a specific account or business situation gains visibility and can refer back to the intellectual property that’s accumulated in the Chatter stream.
Accounting is already social, but it’s happening in an old-school way at most companies today. The simpatico of tools like Chatter in cloud-based accounting applications is modernizing how we do business. It extends what people are already familiar with in their consumer lives to the business world, triggering an immediate ripple that reduces the distance between teams and customers. The power of social media for business is now catching on, and can be used by accounting and finance internally, as well as in a broader context, across the entire company.
Before you know it, the familiar interactions of social media will become a natural extension of day-to-day business.
Tom Brennan is vice president of product marketing at FinancialForce.com.