Why you need real-time, reliable data to manage cash flow: Interview with aVers

Real-time, reliable data allows you to manage your cash flow based on what’s happening in the present. Though historical data and future projections are important, current data gives you an upper hand. Accountants and bookkeepers can take advantage of accounting integrations and software that automate the process of gathering and organizing data.

As part of an interview series we’re running with a range of accounting technologists listed on the Amaka Advisor Directory, we spoke to Nick Dorogavtsev, Data Engineer & Accountant at aVers Cloud Solutions. This is number one of three snippets discussing the growing importance of data and software in the accounting profession.

Below, you’ll find the recording of the interview snippet, a summary of key points and the full transcript.

Key points on managing cash flow with real-time data

  • Business owners and managers need the instant feedback from real-time data to help with motivation and to have access to more accurate data
  • Software can help to make access to data significantly easier, however, you can’t rely on it entirely, you need to be able to cross-check data to ensure everything matches up
  • Accounting professionals now need to have a high-level understanding of integrations, APIs and how data flows between systems
  • Learn the process behind building valuable visualizations and dashboards with real-time financial data
  • The only thing you can control is the now, that’s where the data needs to be in order to really manage your cash

Full interview transcript with aVers Cloud Solutions

Gian Ottavio (Amaka)

Hey everyone. Today I am joined by Nick Dorogavtsev from aVers Cloud Solutions. aVers Cloud Solutions is a 100% cloud based bookkeeping practice that also specializes in cash flow management for small and medium businesses. Nick has over ten years of experience in the field as a certified data engineer. Combining his passion for accounting to deliver A-class cash flow visualization reports to clients.

Nick, thanks for joining us today.

Nick Dorogavtsev (aVers Cloud Solutions)

Thank you. A pleasure to be here.

Gian Ottavio (Amaka)

Cool cool. Now look, the one thing that I wanted to start off touching on was cash flow. I know it’s a very broad topic. It’s something that I think a lot of small businesses overlook the importance of. And there was actually an interesting piece written by our friends over at Float earlier this year, that cited that 82% of small businesses that went bust actually listed cash flow as the main factor.

Now, it shows that I think, you know, cash flow is something that maybe isn’t paid as close attention to as it should be. But I mean, in you producing, you know, your cash flow visualization reports. What would you classify as the most important pieces of data that small business owners really need to keep a grip of when trying to improve their cash flow?

Nick Dorogavtsev (aVers Cloud Solutions)

It’s like it’s almost like business zen because you have something in the past that affects the future. If you have a future that is very hazy because no matter how hard you try, things change. The only thing that you can control is now. And if you focus on now, that’s where the data is. And people have been talking about it for a very long time.

They call it real-time data, for example, or as real-time as we can get to it, because it’s never really real-time. There is always a delay. So control of what’s really happening right here, right now in terms of the finances is the true management of cash. Yes, we can do projections, things like that, and that’s okay.

And I’ve been doing that for a number of years. But what I found is at the end of the day, it’s all like creating a story sort of speak. And really the data that business owners need, no matter the size, is as real time possible data of what’s happening now or what happened just a few days ago or a week ago.

But it needs to change on an ongoing basis. Harvard Business Review, they named the Discovery of Progress principle as one of the most important discoveries in management of this century. And it shows the importance of instant feedback. Basically, the study is itself and I will start a little bit far, but I will come back to the cash flow. It studied what motivates people in the workplace, basically.

Is it extra bonuses? What makes them excited? Is it extra pay? Is it the nice holidays that they’re looking forward to? Is it work-life balance etc.? And a lot of studies around that. What they found around 10 to 12 years ago is its progress, which is instant feedback. When people get on the work that they are doing.

And this is where cash flow management of the business is coming at. You try to get that data as real time as possible, and interaction with that data becomes more than a game, more than life. It’s something that you do. And this is where you guys come in and do your product with business trackers. And that is very important because you pull out that data and this data and there are different pieces and for different businesses it would be different pieces that are required.

There is no one magic number that needs to flow in you and your product is a very important part of that puzzle because you put data from two different sources. I started my career as an engineer, petroleum engineer, and then I went into more into data acquisition, put equipment in the well for production of oil and gas right after they drilled it and measured the data and started putting the equipment up and collecting all this data from measurements.

So this is where my passion for real-time data comes in, because that data then for satellites goes directly to the head office and people can see it straight away. They’re sitting there and they hit the oil or gas or whatever. So these processes of acquiring data in real time are very different to what normally is happening in accounting.

In accounting, we’ll look at the periods you do the checks before you lodge some sort of compliance documentation, your tax returns, bases etc. Now multiplied by thousands, the complexity. If you want to provide real-time or as close as possible, real-time data to clients taking into account yes, the adjustments might be made in the future, but you need mechanisms that allow you to control that data and control the quality of the technology is always a blessing and a curse at the same time.

When you introduce an automated process, it’s fantastic. It saves a lot of labor and it saves a lot of time and it gives you much more accurate data. However, the curse side of it is that mechanisms of checking it now are completely different. And imagine this and you guys deal with point of sale systems and e-commerce mainly, and that’s a very interesting area to be in for real-time data because you have something that used to be a cash register, which is manual and there used to be the processes of the day to day till closure.

So closing it and doing a lot of checks, checking these two, checking that to you, making sure you’re counting your cash, making sure that your EFTPOS  is balancing to your what your closing balance of that machine is. And now all this software comes in that makes point of sale much easier. It and now we have, I don’t know what exact percentage, but a lot of business owners entering this business and they have no price test for till closure for them because they’ve been sold by software companies that it’s a magic that it’s you know it’s just push the button and it’s all done for you.

And there is, I think, a whole generation, at least, if not second generation now, of business owners who come in, they run their cafes or retail stores or whatever. They don’t care about what they read. The ins and outs of closing the till are. They rely fully on the software just pushbutton and it’s kind of done and this is where the problem starts. So when you deal with the real-time data I found the two main problems that new software brings. It solves a lot of problems, but it leaves this gap.

So imagine a retail store that used to have this register there. So you had a person who installed this IT. This IT guy comes in, makes sure that the printer is working, it’s communicating to certain things. Now it’s in the cloud. You don’t need that IT guy. Pretty much it’s replaced with the business owner just ordering the stuff it arrives.

They plug it in, it’s plug in play. Works in the majority of cases without them doing much.

And so now you’re throwing away that IT side, okay. That’s good. However, you’re bringing in the guy to integrate it with your accounting system and it’s not an accountant because an accountant is not a specialist in it. They don’t know what APIs are. They don’t know what things are. So when at the end, with the period there are problems with certain balances in the bank account or sorry, in accounting accounts because it’s integrated to the trust people who are involved.

And we have an IT guy who did the integration, business owner and the accountant there and the question from the business owner is okay, what’s wrong? Who’s at fault? And then people give them.

Gian Ottavio (Amaka)

Finger pointing exercise actually.

Nick Dorogavtsev (aVers Cloud Solutions)

And it’s natural because it’s never been a responsibility of people. The accounting for accountants like it’s your integration. It’s not my business. I don’t know. In the majority of cases. Plus we’re talking about real-time data and this is data. Multiply it by a thousand because it’s not just this, What is the balance at the end of it?

Yes, there are problems often, but it’s in time, every day or every hour or every minute the data is flowing through. So when someone comes in and changes within the integration, a few buttons, it doesn’t do the retrospective changes to that. It doesn’t go that these historically would be re-coded or whatever. Yeah. No, it’s now a new process and it does it in a new way.

And this is really an accountant’s nightmare because for accounting, the motto is always you. Whatever you do, do that consistently, right? Because honestly, if I get a look at the balance sheet and etc. and it’s my or you know, and there is something wrong. It’s much easier to fix if it’s been done incorrectly but consistently rather than if it was seven different methods of doing it wrong.

Yeah. Now we introduce the real-time data with the integrations, etc. That’s the reality of life, correct?

Gian Ottavio (Amaka)

Correct. And so that’s what I yeah, that’s definitely what’s happened is there’s almost too much data. But to avoid the finger pointing exercise, it’s almost like you need tools that allow all different sides of the party to understand the outputs, which you know is where tools like Google Data Studio and other reporting apps like Spotlight Reporting, just as an example, they present data in a way that is so understandable.

But to your point, as well as an engineer by background, you’re more interested in what’s the data behind the nice graphs? Is it all correct? Is it all flowing? How is it being brought into the software? You know, there’s many different layers of things.

Nick Dorogavtsev (aVers Cloud Solutions)

You need other methodologies. So with dashboards you now have multiple levels and with the eyes and how our system was created in the nineties, noughties and in the tens, less. We always had people in parts of the data acquisition that as I gave you the example with the point of sale, they had a process of checking for that till closing the process is forward.

Yeah. Now all these point of sale systems are coming in saying it’s magic. It does it all for you. No it doesn’t. Like every system would have a tool closure screen when you close the tool and it gives you it and asks you to balance it all out. But people don’t do that. Yeah.

Gian Ottavio (Amaka)

Yeah. It’s almost like there’s always been too much trust in the software.

Nick Dorogavtsev (aVers Cloud Solutions)

Yes. And they should. And it’s not that software is doing something wrong, it’s following the process. But no one teaches them. There was no guy who came to them and told them how to do it. This procedure is till closure. Procedure will also be different from business to business. They might have different processes that are happening more old fashioned businesses obviously have their process, but I see so many now coming in and nothing that’s happening, they’re to adjust or people have the process for till closure.

They record it but there is no communication to anyone about it. So yes, there was a big problem, but no one knows about it.

Gian Ottavio (Amaka)

Yeah, it’s very interesting. It’s very interesting.

Nick Dorogavtsev (aVers Cloud Solutions)

Yes. So now we have the BIs (business intelligence), we need visualizations and systems to check the reliability of data. And in a lot of cases that is missing.