Lessons learned from our first 800 borrowers: Open Accounting
In our latest episode of The Ledger, we're hearing from @Louisa Templeton, our Head of Customer Success, and @Phil Cannon, our Customer Success Manager. Louisa and Phil sat down to discuss the lessons we've learned from our first 800 borrowers using Open Accounting.
Phil Cannon, Customer Success Manager: I've been in the IF industry for 14 years. In that time, I've done a range of roles, including client management, senior management, operations, and underwriting.
Louisa Templeton, Head of Customer Success: I've been at Dancerace for about three years now, and a big part of my role and journey has been onboarding lenders and their clients and borrowers onto our Open Accounting technology.
PC: Let's start from the start, Lou. What do we mean by Open Accounting features in the Dancerace Lending OS (operating system)?
LT: You've probably heard us refer to Open Accounting as data extraction. Open Accounting is gaining access to financial data and management information from clients accounting packages.
PC: Can you please describe what our Open Accounting technology does?
LT: It does multiple things: you can start using Open Accounting right from the onboarding stage, which means you can have a seamless onboarding journey where you have access to your client's management information, ledger information, and sales information to help you make your lending decisions.
Open accounting can also be used in life as well. This is connected up with c3, e3 and Insight. Using Open Accounting in life means that you've got real time access to your client's management and sales ledger information.
Another key part of Open Accounting is our write back functionality. Currently we offer write back with Xero. This allows you to not only extract data from the accounting package, but it also to push certain transactions back into the accounting package, such as collections and payments.
PC: That must be a really useful tool to have for both clients and lenders. What types of lending facilities does Open Accounting work with?
LT: This is a really interesting topic and it's something that I've spoken to quite a lot of our lenders about in depth. Ultimately, e-Sync is the evolution of Open Accounting. However, you can also use Open Accounting alongside factoring products and ID bulk products.
Typically, with factoring and ID bulk, you'll use CSV uploads or bulk uploads. With factoring and ID bulk products, you'll either manually upload ledgers or use CSV files. Using Open Accounting, you've got the option with factoring to automatically upload the new ledger items, and with ID bulk you can remove the need to ask your client to send you packs of paperwork and instead use Insight to review that data.
PC: You've touched on some of the benefits already and it sounds like it's quite a seamless product for both lenders and for borrowers. Could you expand a bit more on the benefits for Open Accounting for both parties?
LC: For borrowers, it's actually quite a time-consuming process to send manual packs of data, to upload CSV files, and some borrowers out there still do manually input their ledgers directly into our e3 system. And so having that Open Accounting connection removes all of that process for them. They don't need to upload these manual ledgers or manual customers. It can be extracted from their accounting system at a frequency that the lender defines.
For lenders, I keep hearing this quite a lot at the moment, which is it's a ‘hygiene piece’. Being able to connect up to Open Accounting is just the evolution of CSV files. It's a new way to get that data seamlessly from one person to another person, i.e. from your borrower to your lender.
Because the data that then you are extracting is directly from the accounting package, the data is more reliable and trusted and therefore the lenders can make more informed lending decisions.
I know I keep saying this but I'll touch on it again because having worked in an operations team I know how time consuming it is having to chase clients or borrowers, to send you that information every month if you're chasing management accounts or you're chasing ledger information or even just chasing suppliers to do a contra check. It's really, really time consuming and Open Accounting removes all of the need to do that.
Phil: Speaking from experience, I used a similar product for about seven years, and the benefits were huge for both the lender and the borrower. I see it as a blend between risk and service, the risk for the lenders is hugely reduced by having a live ledger, especially when it comes to a potential collect out or making decisions around the lending.
But for the borrowers or the clients, it is a really seamless way to get information through to the lender to access cash quicker, which ultimately is what they want from the relationship.
For all listeners, we've done a previous podcast that describes in detail the benefits of Open Accounting for both lenders and borrowers, and we'll include that link in this podcast in the show notes.
Lou, what are the five key things lenders need to know before they implement Open Accounting for their business, and how can they make the process as easy as possible?
LC: This is a topic I'm very well versed with. @Harley Adams and I have spent the last 12 to 18 months traveling around the UK onboarding multiple lenders onto our Open Accounting product.
Interestingly, one of the challenges that we've seen with onboarding lenders onto the Open Accounting product or using the Open Accounting functionality has been the change in mindset. It's getting people on board with what Open Accounting is and the value that it's going to add, not just to their business but their day jobs as well.
We've also seen great success with lenders that build this into their objectives for their teams as well. It's one of their objectives - I mentioned it earlier. Open Accounting is a hygiene piece for, for lenders. Now it's a better way to get data and more seamless way to get data. It feels natural to have that as part of the business objectives and then building that into incentives for the team to onboard more customers onto Open Accounting has been, has been really quite successful.
PC: Could you say that it's a mindset that needs to be looked at when trying to implement accounting?
LT: It's definitely a mindset change. When we're speaking with onboarding Open Accounting, we find that there are processes within their teams and businesses that have been embedded for many years, that work for them. Having that shift in mindset to a more streamlined process that means managing by exception in a lot of examples has proved to be quite challenging.
We get around that by having a team of people that are engaged. Dancerace have very much gone on this journey with lenders. We've supported lenders through training, using our LMS system, using on-site workshops, having team training sessions, drop in sessions, all the way to the point where you're onboarding your first client onto Open Accounting. We will handhold you through that process and sit on site with you whilst you're doing it as well.
Sales teams absolutely love Open Accounting. Whenever we've been onboarding a lender onto Open Accounting, it's the sales team that are the champions because it's a really easy product to sell. It's seamless for the sales team because they don't have to chase up paperwork that would normally be sent as manual batches, but also for the prospect that they're trying to onboard.
It's a much cleaner, easier journey what I would recommend when you're starting your Open Accounting journey is make sure that you have the right people in the room, the right stakeholders and that should be people across operations, risk, but also people from your sales team because ultimately they're the ones that are going to be selling this product to your prospects.
I would say start with a lending product that you know. As I mentioned earlier, you can use Open Accounting with factoring, with ID Bulk, or you can use it with eSync. By starting with a product that you know, you're just learning the Open Accounting piece. Your teams aren't being trained on a whole new product and the benefits of eSync can come later.
Next up, I would say it's important that you have people in the business that are engaged. Going back to my first point around mindset, having members of your team engaged in what the process is going to be, engaged with training, using our wiki, using our learning management system, but also getting under the skin of some of the non-technical troubleshooting. If we have that buy in early, you've then got those people within the business that can become your super users throughout your whole journey with Open Accounting.
My next point would be, for your first client, stick to the accounting systems that are the most commonly used. Xero, QuickBooks, Sage 50. The reason this is so important is to ensure a smooth onboarding process while your users and your teams familiarise themselves with the process. Blockers that we've seen in the past is when edge cases are used so unique accounting systems. It's not to say you can't use those as you get further along in your journey on Open Accounting but using those really early on could mean there is stuff that Dancerace don't know. We don't know what we don't know on these rarely used accounting systems. To ensure that your teams have that seamless journey, to give them confidence, we recommend that you stick to these three accounting systems and then perhaps stage your approach. Maybe on month two, month three, start introducing your edge cases.
My last point here, and you wouldn't believe how many times I've heard this in workshops, is let's try this with a friendly client. My recommendation is please don't select a friendly client just on the basis that they're a friendly client, because they might have terrible data in their accounting system, and for Open Accounting to work, it's only as good as the data in the client's accounting system. Select clients that are good at maintaining their accounting system. They keep the data up to date and they don't do anything quirky. They don't raise invoices to you before they've put them in their accounting system. They don't close invoices before you've had collections.
All of those kinds of things are going to impact how the Open Accounting technology works with your existing product.
Those are the key takeaways really from the onboarding, that I have done with our lenders over the last 18 months. Phil, I know you've worked with similar technology for seven years. Do you have anything that you could add to that?
PC: To touch on the points that you made, I think you're completely right. I think the more times that lenders are incentivising their teams to try and push Open Accounting reduces the amount of hours that are spent chasing information that can be automatically pulled through to the system.
That saves huge amount of resource to actually look at things in the risk or the service aspects of the job. The sales team have always been huge advocates of Open Accounting. It also opens the door for potentially looking at specific debtors or a collection of debtors and changing maybe prepayments or pricing for specific debtors.
Again, that really makes it a more seamless transition into Open Accounting for a borrower. The next one that you mentioned was around how we can use Open Accounting for different products. I never used any kind of Open Accounting for factoring or bulk facilities. The fact that you can get management accounts right in front of you there and then is huge.
From my experience, we all had to use systems and train ourselves. I think the good thing about Dancerace is that there is a huge amount of resource both through the wiki pages, LMS and experience through the team that you can use. We want to be there to support our clients on their journeys.
The last two pieces of advice that you gave - looking at the accounts package and the client that you were using are really important. You don't want to be bringing on the wrong client onto Open Accounting. It doesn't have to be the best mate, it needs to be the right client for it. Putting in that consideration is vital.
LT: That's some really great insight, Phil. I really do believe that Open Accounting is the future in invoice finance.
It feels like the natural evolution, in the same way, you know, ten years ago, lenders and their clients were uploading ledgers manually, the hygiene piece there was moving on to CSV files, and now we're moving away from CSV files into Open Accounting.
In our latest episode of The Ledger, we're hearing from @Louisa Templeton, our Head of Customer Success, and @Phil Cannon, our Customer Success Manager. Louisa and Phil sat down to discuss the lessons we've learned from our first 800 borrowers using Open Accounting.
Phil Cannon, Customer Success Manager: I've been in the IF industry for 14 years. In that time, I've done a range of roles, including client management, senior management, operations, and underwriting.
Louisa Templeton, Head of Customer Success: I've been at Dancerace for about three years now, and a big part of my role and journey has been onboarding lenders and their clients and borrowers onto our Open Accounting technology.
PC: Let's start from the start, Lou. What do we mean by Open Accounting features in the Dancerace Lending OS (operating system)?
LT: You've probably heard us refer to Open Accounting as data extraction. Open Accounting is gaining access to financial data and management information from clients accounting packages.
PC: Can you please describe what our Open Accounting technology does?
LT: It does multiple things: you can start using Open Accounting right from the onboarding stage, which means you can have a seamless onboarding journey where you have access to your client's management information, ledger information, and sales information to help you make your lending decisions.
Open accounting can also be used in life as well. This is connected up with c3, e3 and Insight. Using Open Accounting in life means that you've got real time access to your client's management and sales ledger information.
Another key part of Open Accounting is our write back functionality. Currently we offer write back with Xero. This allows you to not only extract data from the accounting package, but it also to push certain transactions back into the accounting package, such as collections and payments.
PC: That must be a really useful tool to have for both clients and lenders. What types of lending facilities does Open Accounting work with?
LT: This is a really interesting topic and it's something that I've spoken to quite a lot of our lenders about in depth. Ultimately, e-Sync is the evolution of Open Accounting. However, you can also use Open Accounting alongside factoring products and ID bulk products.
Typically, with factoring and ID bulk, you'll use CSV uploads or bulk uploads. With factoring and ID bulk products, you'll either manually upload ledgers or use CSV files. Using Open Accounting, you've got the option with factoring to automatically upload the new ledger items, and with ID bulk you can remove the need to ask your client to send you packs of paperwork and instead use Insight to review that data.
PC: You've touched on some of the benefits already and it sounds like it's quite a seamless product for both lenders and for borrowers. Could you expand a bit more on the benefits for Open Accounting for both parties?
LC: For borrowers, it's actually quite a time-consuming process to send manual packs of data, to upload CSV files, and some borrowers out there still do manually input their ledgers directly into our e3 system. And so having that Open Accounting connection removes all of that process for them. They don't need to upload these manual ledgers or manual customers. It can be extracted from their accounting system at a frequency that the lender defines.
For lenders, I keep hearing this quite a lot at the moment, which is it's a ‘hygiene piece’. Being able to connect up to Open Accounting is just the evolution of CSV files. It's a new way to get that data seamlessly from one person to another person, i.e. from your borrower to your lender.
Because the data that then you are extracting is directly from the accounting package, the data is more reliable and trusted and therefore the lenders can make more informed lending decisions.
I know I keep saying this but I'll touch on it again because having worked in an operations team I know how time consuming it is having to chase clients or borrowers, to send you that information every month if you're chasing management accounts or you're chasing ledger information or even just chasing suppliers to do a contra check. It's really, really time consuming and Open Accounting removes all of the need to do that.
Phil: Speaking from experience, I used a similar product for about seven years, and the benefits were huge for both the lender and the borrower. I see it as a blend between risk and service, the risk for the lenders is hugely reduced by having a live ledger, especially when it comes to a potential collect out or making decisions around the lending.
But for the borrowers or the clients, it is a really seamless way to get information through to the lender to access cash quicker, which ultimately is what they want from the relationship.
For all listeners, we've done a previous podcast that describes in detail the benefits of Open Accounting for both lenders and borrowers, and we'll include that link in this podcast in the show notes.
Lou, what are the five key things lenders need to know before they implement Open Accounting for their business, and how can they make the process as easy as possible?
LC: This is a topic I'm very well versed with. @Harley Adams and I have spent the last 12 to 18 months traveling around the UK onboarding multiple lenders onto our Open Accounting product.
Interestingly, one of the challenges that we've seen with onboarding lenders onto the Open Accounting product or using the Open Accounting functionality has been the change in mindset. It's getting people on board with what Open Accounting is and the value that it's going to add, not just to their business but their day jobs as well.
We've also seen great success with lenders that build this into their objectives for their teams as well. It's one of their objectives - I mentioned it earlier. Open Accounting is a hygiene piece for, for lenders. Now it's a better way to get data and more seamless way to get data. It feels natural to have that as part of the business objectives and then building that into incentives for the team to onboard more customers onto Open Accounting has been, has been really quite successful.
PC: Could you say that it's a mindset that needs to be looked at when trying to implement accounting?
LT: It's definitely a mindset change. When we're speaking with onboarding Open Accounting, we find that there are processes within their teams and businesses that have been embedded for many years, that work for them. Having that shift in mindset to a more streamlined process that means managing by exception in a lot of examples has proved to be quite challenging.
We get around that by having a team of people that are engaged. Dancerace have very much gone on this journey with lenders. We've supported lenders through training, using our LMS system, using on-site workshops, having team training sessions, drop in sessions, all the way to the point where you're onboarding your first client onto Open Accounting. We will handhold you through that process and sit on site with you whilst you're doing it as well.
Sales teams absolutely love Open Accounting. Whenever we've been onboarding a lender onto Open Accounting, it's the sales team that are the champions because it's a really easy product to sell. It's seamless for the sales team because they don't have to chase up paperwork that would normally be sent as manual batches, but also for the prospect that they're trying to onboard.
It's a much cleaner, easier journey what I would recommend when you're starting your Open Accounting journey is make sure that you have the right people in the room, the right stakeholders and that should be people across operations, risk, but also people from your sales team because ultimately they're the ones that are going to be selling this product to your prospects.
I would say start with a lending product that you know. As I mentioned earlier, you can use Open Accounting with factoring, with ID Bulk, or you can use it with eSync. By starting with a product that you know, you're just learning the Open Accounting piece. Your teams aren't being trained on a whole new product and the benefits of eSync can come later.
Next up, I would say it's important that you have people in the business that are engaged. Going back to my first point around mindset, having members of your team engaged in what the process is going to be, engaged with training, using our wiki, using our learning management system, but also getting under the skin of some of the non-technical troubleshooting. If we have that buy in early, you've then got those people within the business that can become your super users throughout your whole journey with Open Accounting.
My next point would be, for your first client, stick to the accounting systems that are the most commonly used. Xero, QuickBooks, Sage 50. The reason this is so important is to ensure a smooth onboarding process while your users and your teams familiarise themselves with the process. Blockers that we've seen in the past is when edge cases are used so unique accounting systems. It's not to say you can't use those as you get further along in your journey on Open Accounting but using those really early on could mean there is stuff that Dancerace don't know. We don't know what we don't know on these rarely used accounting systems. To ensure that your teams have that seamless journey, to give them confidence, we recommend that you stick to these three accounting systems and then perhaps stage your approach. Maybe on month two, month three, start introducing your edge cases.
My last point here, and you wouldn't believe how many times I've heard this in workshops, is let's try this with a friendly client. My recommendation is please don't select a friendly client just on the basis that they're a friendly client, because they might have terrible data in their accounting system, and for Open Accounting to work, it's only as good as the data in the client's accounting system. Select clients that are good at maintaining their accounting system. They keep the data up to date and they don't do anything quirky. They don't raise invoices to you before they've put them in their accounting system. They don't close invoices before you've had collections.
All of those kinds of things are going to impact how the Open Accounting technology works with your existing product.
Those are the key takeaways really from the onboarding, that I have done with our lenders over the last 18 months. Phil, I know you've worked with similar technology for seven years. Do you have anything that you could add to that?
PC: To touch on the points that you made, I think you're completely right. I think the more times that lenders are incentivising their teams to try and push Open Accounting reduces the amount of hours that are spent chasing information that can be automatically pulled through to the system.
That saves huge amount of resource to actually look at things in the risk or the service aspects of the job. The sales team have always been huge advocates of Open Accounting. It also opens the door for potentially looking at specific debtors or a collection of debtors and changing maybe prepayments or pricing for specific debtors.
Again, that really makes it a more seamless transition into Open Accounting for a borrower. The next one that you mentioned was around how we can use Open Accounting for different products. I never used any kind of Open Accounting for factoring or bulk facilities. The fact that you can get management accounts right in front of you there and then is huge.
From my experience, we all had to use systems and train ourselves. I think the good thing about Dancerace is that there is a huge amount of resource both through the wiki pages, LMS and experience through the team that you can use. We want to be there to support our clients on their journeys.
The last two pieces of advice that you gave - looking at the accounts package and the client that you were using are really important. You don't want to be bringing on the wrong client onto Open Accounting. It doesn't have to be the best mate, it needs to be the right client for it. Putting in that consideration is vital.
LT: That's some really great insight, Phil. I really do believe that Open Accounting is the future in invoice finance.
It feels like the natural evolution, in the same way, you know, ten years ago, lenders and their clients were uploading ledgers manually, the hygiene piece there was moving on to CSV files, and now we're moving away from CSV files into Open Accounting.
