Increased government compliance, vast volumes of transactional data and tighter scrutiny is putting the pressure on businesses to invest in more data-driven fintech strategies, in order to build resiliency and thrive in 2021.
Addressing transactional inefficiencies
Last year saw Australian businesses suffering, on average, around a 20 per cent financial loss which required them to examine their existing processes to find efficiencies and increase margins.
Given this clear economic impact of COVID-19, Australian businesses absolutely needed – and will continue to need – to identify and plug financial leakage quickly. As an example, Profectus reviews hundreds of thousands of invoices and agreements on behalf of its customers, and last year discovered, on average, between 3.5-4 transactions per 10,000 financial transactions contain an error. This can add up to millions of lost dollars each year.
This is because many clients still use Excel spreadsheets to record data, leading to significant human error in what can amount to billions of lines of data. This led us at Profectus to leverage the leading AI-driven platform for infusing analytics everywhere, Sisense, to ensure absolute transactional accuracy and better safeguard businesses across Australia from transactional errors that lead to significant financial waste.
Making sense of the data in real time
We wanted to have algorithms, ‘visualisation stations’, that actually tease out the differences in the data in a much more automated way, so that we’re not just throwing more and more human capital at it, but actually leveraging smarter technology.
For instance, we ran a representative data set we had through a competing solution, but we killed the process after 20 minutes because that was already unacceptable both from a customer experience and cost perspective. With Sisense, we ran the same data set, and it processed the query within 20 seconds. We were stunned. This sort of data efficiency gain is a big deal for anyone, particularly in a compliance heavy environment, because it helps to achieve the scale needed to serve customers and grow as an organisation.
It is clear data increasingly can offer the margins needed for businesses to simply stay in operation. To be able to get all the information, you need to understand where your biggest issues are quickly in order to focus management attention where it really needs to be.
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Increased compliance requirements in 2021
Looking at the next 12 months, it would be fair to say government compliance on business reporting will only become more prevalent, and we’re already seeing this in Australia.
This kind of ongoing and mandatory government scrutiny places a significant burden on businesses to comply, not only because of the time it takes to surface and serve up the required reporting, but also because this time ends up taking employees away from vital revenue generating activities.
However, ongoing compliance requirements will have positive outcomes as well, mainly because it will mean businesses will have to, out of necessity, become more data-driven in their financial strategy, which in itself carries a number of inherent advantages.
This year, Profectus and Sisense have expanded their partnership to help reduce the compliance burden of the new Government Payment Times Reporting Scheme (PTRS) for Australian businesses
Effective as of January 1 this year, PTRS requires businesses and government enterprises with an annual total income of over $100 million to biannually report on their payment terms and practices for their small business suppliers. These reports will then be made publicly available via the Department of Industry’s PTRS website.
The Payment Times Reporting Scheme places considerable pressure on businesses to both surface data and report on payment times swiftly and publically. Profectus and Sisense take a highly automated and data-driven approach to this PTRS compliance in order to save businesses time and money by:
1. Submitting the reports to the Department of Industry on the organisation’s behalf,
2. Setting up reporting for multiple entities,
3. Gaining access to live remediation reporting via its Delta BI platform (powered by Sisense), and
4. Providing visibility of progress against the PTRS metrics.
Compliance legislation is a burden to Australian businesses and can be time and labour-intensive, often involving the use of manual spreadsheets. However, by using technology, AI, automation and a data-driven approach, this burden becomes an opportunity for large organisations to start thinking about how they can improve their business operations, whilst supporting the vital cash flow of the small suppliers they work with.
By going beyond traditional business intelligence with an insights-first approach, it saves businesses hundreds of hours of time – and it actually becomes a proactive approach to improving parts of large organisations.
The resilient road ahead
The next 12 months will no doubt bring to the surface a new set of challenges for businesses given the current global economic conditions. But at the same time, we will also see fresh opportunities to leverage the right fintech innovations and a data-first mindset to eliminate transactional inefficiencies and build stronger, more scalable business models.
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