Why changing finance software without changing the process misses the point

Replacing an ageing finance system can be a significant investment. If the new platform simply recreates the same approvals, workarounds and manual interventions, much of the opportunity has already been lost.

“A new finance system should do more than reproduce the processes you already have.”

When organisations begin looking for new finance software, the conversation often starts with a list of current features. What does the existing system do? Which reports must be reproduced? Which fields and approval stages need to be carried across?

Those questions matter, but they can also anchor the project too firmly in the past. Existing processes are rarely the product of deliberate design alone. They have evolved around system limitations, organisational changes and years of local workarounds. Recreating them exactly may preserve the very problems the investment is intended to solve.

A finance-system project should therefore be treated as an opportunity to rethink how work moves through the business, not simply where the transactions will be stored.

Spreadsheets, email approvals and repeated data entry are easy to identify, but removing them is not simply a matter of automating individual tasks. It is important to understand why they exist.

An offline spreadsheet may compensate for reporting that no longer reflects the business. An email approval may exist because responsibility is unclear. Duplicate entry may bridge two disconnected systems. A month-end adjustment may have become routine because information is captured too late in the original process.

If these causes are not addressed, the workaround tends to survive the technology change. It may look slightly different, but finance is still left reconciling information, chasing decisions and correcting avoidable errors.

Effective process design begins by asking what the organisation is trying to achieve. For purchasing, that could mean ensuring spend is properly authorised, coded and visible before a commitment is made. For revenue, it could mean billing promptly and recognising income consistently. For reporting, it could mean giving managers an accurate view without a lengthy manual production cycle.

Once the outcome is clear, the process can be examined with fresh eyes. Which information should be captured at the beginning? Which decisions genuinely require approval? Who should be responsible? What can follow an agreed rule? Where are exceptions useful, and where have they become the norm?

This is also the point at which controls can become more effective without making the organisation less agile. Approval rules can reflect value, department, location or type of expenditure. Supporting information can sit with the transaction. A complete history can show who submitted, changed and approved an item. The control becomes part of the process rather than a separate exercise performed afterwards.

Finance transformation is sometimes discussed as though its benefits belong primarily to the finance team. In practice, poorly designed financial processes create friction across the organisation.

Managers wait for reports or struggle to understand their budgets. Employees chase purchase approvals. Project teams cannot see whether work has been billed. Senior leaders receive answers only after finance has assembled information from several sources.

A well-designed system reduces this friction by giving people appropriate access, clearer responsibilities and more immediate information. Finance spends less time administering the process and more time providing analysis and advice. The wider business gains greater confidence in the numbers and a clearer understanding of its own role in producing them.

Before translating current procedures into a new system, leadership teams should ask:

• Which activities add control or insight, and which exist only because of a current limitation?
• Where is information entered more than once?
• Which approvals are meaningful, and which have become habitual?
• Where do transactions leave the system and continue through email or spreadsheets?
• What information do managers need earlier in the process?
• How will the new approach be adopted and owned after go-live?

Software can automate a workflow, enforce a rule and provide a detailed audit trail. It cannot decide on its own whether the underlying process is sensible. That requires business understanding, constructive challenge and input from the people who perform and depend on the work.

With more than 34 years of experience, Pinnacle approaches finance-system change as a business transformation programme. We help organisations understand their requirements, challenge unnecessary complexity and shape processes that make better use of both their people and technology.

The measure of success is not that every old process has been transferred. It is that the organisation operates with greater visibility, stronger control and less effort than it did before.

If you want to discuss further with our experts, contact us now