How did your school approach digital transformation of the accounting function?
Our transformation to a paperless environment was actually driven by need. The number of pupils at our school has increased from 1,100 to 1,500 in the last 20 years and we expect it to keep growing. But there are still just two people doing all the accounting, so we just had to find a smarter way.
In 2018, we included in our annual plan the move of all accounting-related records and data to a paperless environment by the end of 2020. That’s one of the reasons why our transformation happened so quickly: having a clear goal really helps to stay on track.
With so many pupils, your school surely does a lot of purchasing. How do you organise and control this?
Wellington Girls’ College has no central purchasing department but more than 60 cost centres, each with their own budget holder who can purchase or incur costs within a certain limit. Budget holders can be teaching staff, or support staff who run large departments such as IT or Property, or parents who organise dances and balls for the school.
We keep it quite simple. Budget holders usually do their purchasing themselves, mostly online. As we’re a semi-government organisation, we can join in some government contracts to get a better deal. This is voluntary, we still have the discretion to buy where we want. But we have taken advantage of a number of government contracts so far, such as for stationery, IT hardware and photocopiers.
So, no need for proactive spend control with purchase orders – but it happens at invoice level?
Correct. A few years ago, we would have raised a purchase order and given it to the respective teacher who then had to go to a shop and hand over that document. But these days it’s all done online. We have a couple of departments who do a lot of ordering, and often purchase overseas. It basically depends on where they can get the best deal. That’s why they actually have access to a credit card – with a set limit.
There’s no need for rigid controls at the level of purchasing because we work in a high-trust high accountability environment. It’s my job to watch out for situations where purchases are above or not part of someone’s budget. But this happens very rarely, so it’s not an issue. Staff are aware that other people review each purchase as part of the process.
Can you describe the way you used to work before going digital?
Invoices used to arrive through the post, attached to deliveries, or by email either to the purchaser or the finance department. A paper copy was passed on to the respective budget holder, who had to sign and return it. If required, the finance department would send it to a second approver. Paper invoices literally worked their way through the pigeonholes in our staff room. The tricky part, obviously, was getting approvals from external people. For them we used to scan in and forward the invoices.
Then, prior to payment, the business manager reviewed the hard copies of every single invoice to check coding and appropriateness of the spending and if they had been correctly approved. Once paid, invoices were boxed and stored until needed for an audit.
What tools help you now to get rid of paper?
First of all, back in 2018, we moved to Xero. I actually hesitated for a bit because it was difficult to find a good reporting mechanism for it. But then I saw a presentation of Monty that answered all my questions, and we introduced Xero and Monty shortly after. Monty provides quick reporting for management purposes, and emailing reports to budget holders and teachers is very easy. And, there’s no need to log into Xero.
Next, we chose Hubdoc as the data capture tool to get invoices into Xero. Before that we had to manually enter them either into the old accounting package or into Xero. It could be up to 700 entries per month, so it was a lot of work. Pushing documents from Hubdoc to Xero is still a very manual process but that’s not all bad because we like having some control and decide things like to which department an invoice has to be allocated.
Finally, we got ApprovalMax for the paperless distribution of invoices and easy tracking of the approval process. It also lets us set up multiple approval levels depending on invoice amounts.
What does the overall process look like these days?
Invoices are submitted to Xero, where Approval Max picks them up. They are then routed to the responsible budget holders, who also get a notification about new approval requests by email or by the phone app. Once approved, every invoice goes to the business manager who acts as the second approver. She completes the same checks as before and approves the invoice for payment. Invoices over a set amount must be authorised by a third approver, the principal. When all required approvals are in place, payment can proceed.
Well, it looks like you have reached your goal of going paperless. What are the main benefits for you?
In general, it saves us a lot of time. Suppliers are encouraged to email their invoices straight to Hubdoc and the finance department makes sure they go directly to the responsible budget holders, who’ll find a digital copy in their ApprovalMax records. So, nothing gets lost any more. Every invoice with the complete approval history is stored in Xero, which has significantly reduced both the on-site visit time for annual audits and follow-up enquires.
An unexpected benefit of moving our accounting processes to a digital environment is that our finance team can operate seamlessly even under the current Covid-19 restrictions. A year ago, we certainly could not have continued “business as usual”.