It’s all about the data
“One of my key responsibilities, across the business and specifically in relation to the finance team, was to manage financial risk; to make sure knowledge within the team was spread around and not sat with only one person, reducing the risk to the firm and enabling the wider team – not just a few – to cope with curveballs. Albeit we didn’t envisage the curveballs would be quite as big as this one turned out to be!” she says.
One of the biggest impacts for the finance function during the COVID crisis has been a change in the team’s work and priorities. With senior financial management focusing on the firm’s strategic response, the wider finance team has had to pick up more of the senior business-as-usual (BAU) tasks. There have also been more demands placed on analytics support to provide the data to inform strategic business decision-making, an embryonic role within the business.
“We had been developing our analytics and reporting functions anyway, but that’s been significantly accelerated in the last three months. There is much more emphasis around capacity management, costs, profitability. Accessing and interpreting the data has probably been one of our biggest challenges,” says Amanda.
A challenge that could have been exacerbated by the move to remote working for the entire finance team. Fortunately, just as the crisis hit, the firm was only a week away from completing a comprehensive overhaul of its IT systems, designed to increase agility and upgrade operating systems and platforms.
Its main platform is Elite 3E, along with a new legal desktop solution, supplemented with specific practice management tools such as MatterSphere. As a result, the whole firm has been able to move to remote working relatively quickly and painlessly, to the extent that Amanda says her team now works just as effectively from home as in the office, albeit with new challenges around supervision and team cohesion.
“We’ve invested in the technology to support an agile way of working. We’ve consolidated our IT systems to make sure we’re all operating in a consistent way, which has improved performance. At the moment, it’s about enabling home working and agility, rather than necessarily the efficiencies,” she says.
Stone King is proud of its strong firm culture around people. The firm has found a way of prioritising commercial considerations, while still retaining its values and culture. This has been achieved through internal collaboration between support functions and the fee earner community, not just the finance function running in isolation from the rest of the firm.
As an example, the working capital team is working closer with fee earners to ensure bills are sent and invoices are paid on time, making them aware of the commercial implications of delays, working collaboratively, rather than as separate functions.
Before joining Stone King, Amanda worked in senior financial roles in several other professional services firms. During the financial crisis of 2008/2009, she’d helped to develop a tool which turned out to be invaluable during this crisis – an integrated three year profit and loss balance sheet and fund flow model.
Ordinarily, she says the firm’s financial model would be updated quarterly, but since the start of the crisis, they have been updating the model more frequently.
When the crisis hit, the firm was threequarters of the way through its annual budgeting process. All that had to be redone. With no real certainty of what even the next month would look like, let alone the next year, the three-year planning tool became vital in modelling different scenarios.
“It allowed me to revise our budgets quickly, assess the financial impact in terms of profitability and cash flow, adapt the modelling swiftly as current data changes, and use that information to have proactive discussions within the business and our external stakeholders” she says.
“It also means we can use these three year forecasts to have sensible conversations with equity members around strategies to manage the business through that period.”
One of the potential areas flagged up by the crisis as requiring additional attention for the finance team was around data analysis and reporting. Although the firm’s existing systems contain an awful lot of data, accessing and extracting it is sometimes a little ‘clunky’, says Amanda.
“It’s highlighted the need for real-time, accurate data. We need to be able to extract and interpret data promptly, to help inform business decisions. This requires the appropriate tools but also the appropriate personnel with the requisite skills, not something you can just pull out of a hat. In terms of developing the team and the systems, this is a real area of focus,” she says.
Amanda’s 3 Key Takeaways:
Strong internal engagement
By involving the firm’s different business units in key commercial decisions, Amanda has found it easier to ensure buy-in and retain a clear focus on commercial priorities, while protecting the firm’s culture and values.
Be open with clients around pricing
Stone King has worked hard to be open and transparent with clients around pricing and fee discussions; proactively managing the relationship rather than reacting when it’s too late.
Stay on top of the data
It is essential to stay on top of the data. The situation is changing so quickly, forecasts have to be agile. Simply remodelling your budget once a quarter is not enough.
Amanda joined Stone King in 2018, having worked in the professional services sector for 20 years. Since joining Stone King, she has refocused what was a relatively ‘traditional’ finance function of 12-14 people into a more proactive, agile team focused on three core areas: working capital management, cashiering support, and reporting and analytics. She believes this has given the firm a solid foundation to react to the events of the past few months.
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