Author Agneta Venckute
In financial services’ business, neither the size or age of the company defines whether the business is ready to upgrade to leasing software solutions. Certain companies could carry on managing their business using a spreadsheet for years, whereas others will need to make an immediate switch for different reasons. In this article, I will be giving an overview of the industry-specific indicators, which show that your business has already reached the point when the leasing software is needed.
1. Your Business growth plans
One of the first questions that you need to clarify is your business growth. If you are planning for business expansion, and still use spreadsheets, you are putting your business at risk of not being able to cope with the increasing incoming load. Especially if you are trying to grow in hundreds or even thousands of leasing contracts per year, in three years’ future, etc.
Consider the fact, that growth would most likely mean having more personnel, more customers to deal with and more data to evaluate and analyze. Don’t expect to do tomorrow’s business using yesterday ‘s methodology. Otherwise, you will not only fail to scale but even worse, you will be left far behind from your competition.
Another example of business growth is when the company wants to introduce a new financial service to the market. One of our customers DnB Nord Lizingas had an opportunity to introduce a new operational leasing service for their customer’s thanks to a reduction in manual tasks and improved functions such as automatic data entry and simple graph creation. This service became popular in Lithuania and helped increase the company’s market share in the local market. As a result, their portfolio has expanded by LTL50 million (€15 million) in the first two months in 2008 and allowed them to stay competitive in the leasing industry.
The indicator here is simple: if you expect to grow your business significantly, you need to get the right tools to manage the growth.
2. Manual business processes management and low employee productivity
Having to do a lot of manual work makes your staff waste time and may even increase their dissatisfaction with work conditions, not to mention, their work efficiency will be affected.
Manual tasks were becoming a true headache for one of our customers from Albania. The company’s employees had to do almost all their business tasks manually because they were without a suitable software solution. For example, for each disbursement, the company had to open an Excel file for the calculation of installment and interest calculation for factoring. There were a lot of inefficiencies; not only it was tiring and time-consuming, but at times, data loss and inconsistency occurred. The company to solve this situation had implemented Soft4Leasing & Factoring solution and having all their data on one software (accounting and contract management) has facilitated many usable processes for their daily work. Undeniably, it reduced the cost for the business (because it became time effective) and eliminated some of their previous administrative tasks. The team estimated, thanks to the new software, that they eliminated manual business tasks such as interest calculation and handwritten billing which the software makes automatically, and they now save 3-4 hours per day.
Automated leasing process can improve business process management and increase employee productivity. It can also provide benefits such as reduced cost per transaction (as the number of customers grows but operating costs stay nearly the same) and minimize human error; thus decreasing related operating risks.
3. Your business fails to meet regulatory compliance
Statutory regulations are part of any leasing business’s point of interest, as the lack of compliance may result in penalties, lost reputation or even closed business. If you have already had even the slightest issues regarding one of the mentioned subjects, then you must start looking at compliance requirements more seriously.
The core software has a huge role in meeting the statutory requirements. We have seen this through cases in practice, in which the solution does not have the required features to meet the requirements (for example, a lease-management system loosely related to General Ledger and Financial Accounting system, which leads to poor data quality or even inconsistency). Besides, they do not prevent the company from noncompliance.
So, don’t put your business in situations where you risk losing your reputation and money!
4. Your Customer Satisfaction Decreases
Decreasing Customer Satisfaction rates, the rising level of complaints can signalize about the urgent need for changes. Again, it may be related to your employee productivity or the speed of transferring from one business process to another, and even issues to get the essential data a customer needs in a timely manner.
One of the most common causes can be the overtime your employees spends going through the business process stages (for example, quotation to application).
Business process automation can partly help to solve these issues. How exactly? Well, by making it easier to give prompt and accurate replies. Besides, receiving notifications which allow a business to present their customers with the best possible experience and proceeding significantly more applications or even close more deals within the same timeframe and still having the same number staff. The possible KPIs you can measure here is time to credit decision, time from quote to application and to the contract and more.
Tirana Factoring and Lease CEO Ervin revealed that having to manage all their business processes manually, made them lose time for any decision making. Each time their employee would have to do Excel calculations where the data would be obtained from various sources, like accounting software or Excel. They had to analyze it all and only then could they make the decision.
Currently, this process has been simplified because the calculations are done with just one click. Ervin pointed out that now the whole process is kept on the software from offer to decision, so they can monitor all the processes for each department. Previously, if a department had not completed its task this prevented the work of another department so with the software they now can see where the job has stalled.
You can’t affect customer satisfaction directly with a software solution, but you can certainly empower your employees to go through the business processes faster.
5. You are using separate software solutions and it slows your business down
Having to manage your business’s lease management, lease accounting, financial accounting with a few different software solutions may not only cause information loss and duplication but also raise the risk of a human error. Another challenge is keeping your data in different software databases up to date. Plus, it may evoke serious disruptions, causing more complicated credit decision making process and even bring chaos.
It may also result in higher operational costs. For example, one of our leasing clients from Australia estimated that after getting Soft4Leasing solution the company saved around 120 000 AUD annually for extra staff in the back office and around 30 minutes of employee time for each quote!
If data loss makes you waste money, time and nerve cells, immediate changes are needed.
6. The ERP system you use now is no longer supported or updated
You might be using the old good, perhaps the individually customized solution to fit your leasing business needs. Although the upgrades are too costly and even more time consuming, not to mention the functionality is not sufficient enough (and it has been this way… for a while now). Well, it only means that the day you will have to go through the software change is coming faster than you thought.
Another issue with the outdated software is its incapability to integrate with the modern technology you use for your everyday operations. One more warning sign is that the outdated systems cannot be scaled. In the worst-case scenario, if your current software is no longer supported by the manufacturer, it indicates that if sudden software disruption occurs, there will be no possibilities to have it fixed in a timely manner if possible. Why put your business in such risk?
7. You lack real-time business information and insights
Software is intended to help you manage a business, and if you are struggling to get the needed information from the system easily. It not only slows down your decision-making process but also prevents fast problem-solving. As a business leader, you should be constantly aware of what issues your business is facing, be able to make management decisions which become hardly possible without the real-time data.
According to Microsoft, one of the data related challenges an organization may have is delays in critical decision making that may affect the sales yield, inability to view forecasts, sales performance, and KPIs in one place and even makes it difficult to spot trends.
The system provided real-time data helps increasing business transparency (as data is accessible for all departments), gives benefits for departments such as marketing and empowers the organization to make business decisions on time. Possible business threats can be spot and resolved on time.
Having one software solution with all the business data in one place gives you another tremendous benefit – you can analyze your data by any metric you please, have Power Bi diagrams, use pipeline, and portfolio reports, etc.
If you found yourself agreeing with more than one statement from the ones listed above, it is time to take action and start considering leasing software solutions‘ options immediately.
Don‘t forget the fact that in order to stay competitive in the market, you have to keep up with the trends and without the right solution is hardly possible.