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Mayday: What's all the fuss about?

May 10, 2023

Mayday: What's all the fuss about?

Last week, Mayday Co-Founder and CEO, David Tuck, was joined by two of our brilliant customers:

  • Harriet Hope, Financial Controller at Arbolus and month-end maestro, with her experience as a Xero and NetSuite user.
  • MJ Figg, Managing Director UK & Europe at OG. Global. MJ is also global CFO for the company which has more than 40 entities across the globe.

Harriet and MJ spent 30 minutes sharing how they, as multi-entity Xero businesses, benefit from the Mayday product suite. We learnt a huge amount from the discussion.

You can find a recording of the webinar here.

Key takeaways from Harriet and MJ:

  • Massive time savings with manual work reduced by 98%.
  • Accelerated management information thanks to Mayday reducing the time to close month end.
  • Improved accuracy and confidence in consolidation thanks to the efficient, automated rigour of Mayday.
  • Transfer pricing best practices opened up by Mayday’s ability to recharge specific costs and revenues, as well as charge interest on intercompany loans.
  • Financial control and fraud prevention from Mayday enabling centralisation and associated approvals and audit trails.
  • Cash savings as the centralisation that Mayday enables, results in centralised purchasing and volume discounts, as well as centralised billing and holding of cash to maximise interest earned.
  • E-R-Peace of mind from no longer worrying about  the ‘horrible and hectic’ move from Xero to an Enterprise Resource Planning (ERP) system that looms over multi-entity Xero-using groups

Core Fuss

Mayday eliminates manual pain for multi-entity Xero-using finance teams by:

The headline benefits of this are time savings and the ability to close month end earlier.

Time Saved

  • Harriet shared that intercompany recharges ‘would previously have taken about half a day plus any of the time taken to make changes’.
  • With Mayday, it’s all ‘automated, synced up’ and ‘it’s super quick to repeat that process and make the changes’.
  • Mayday reduces average recharge time for Harriet’s team by 98%.

Timely Management Information

  • MJ told us that ‘in the past, we were essentially putting accounts out three to four weeks after close’.
  • With over 40 entities, OG. Global had to tackle ‘a manual reconciliation in spreadsheets at the end of the month and posting manual journals. Still excel based so very prone to error and takes a lot of time to make the adjustments’.
  • With Mayday, OG. Global is able to put out their accounts much faster. The finance team’s workload is streamlined so they can focus on more interesting, value-adding tasks.

Bonus Fuss

Throughout the webinar, Harriet and MJ identified further benefits of the product suite, including improved accuracy, enablement of transfer pricing best practices, fraud prevention, and cash savings.

Improved Accuracy

  • Harriet told us how difficult it can be to achieve full accuracy when ‘you have limited resources and limited time’.
  • ‘In the past’, Harriet reflected, ‘it was such a task to update everything if we needed to make a change due to a late transaction. Sometimes you would say it’s not worth doing it this month, we’ll just push it to next month’.
  • This method would create ‘a big knock-on effect’ and the team would need to plug in numbers to balance the accounts.
  • Mayday gives the team peace of mind, Harriet shared: 'we can be confident in our consolidations and our numbers without having to put plugs in' and this 'sets us up for scalability and potential audits’.

Transfer Pricing Best Practice

  • Harriet told us that ‘with Mayday, now we can have a more complex, and best practice, transfer pricing matrix where not necessarily everything needs to be recharged’.
  • Mayday Balancer’s easy ability to charge interest enabled a step-change in what Arbolus could do to achieve transfer pricing best practice.
  • Interest on intercompany loans is something that Arbolus had never been able to prioritise a solution for. With Balancer, Arbolus can 'start thinking a bit more sophisticatedly about interest, which up until now we haven't because we have very fluctuating loan accounts’.
  • FX adjustments also became a secondary priority, Harriet told us 'with the FX adjustments, sometimes you just let them build up and write it off once a quarter or once a year’ but with Balancer, it’s ‘lovely to just be able to post those every month'.

Financial Control and Fraud Prevention

  • MJ shared that OG’s process for dealing with their 40-50 different Xero files was ‘decentralised spending and transactions, which caused a lot of problems for us’ including decentralised procurement ‘so not having tight order controls on who’s buying and auditing the process’. They had to do this due to how onerous recharging central costs had become.
  • This meant that ‘spend got difficult to manage and difficult to forecast because you don’t know who’s doing things, and there’s the ability for fraud’.
  • Mayday’s ability to recharge costs and revenues between entities enables OG. Global to centralise. In doing so, they now have an audit trail that ensures financial control and fraud prevention.

Cash Savings

  • MJ shared that centralising costs at OG. Global has enabled a higher level of control and purchasing efficiencies.
  • The centralisation that Mayday has enabled reduces the amount of transactions. OG. Global has therefore seen a ‘reduction in our bookkeeping resources' as there are 'less people needed' to cover the group’s work.
  • 'Much more centralised approval mechanisms’ have also reduced spend by creating 'an increase in volume discounts'.
  • The revenue recharging in Mayday has enabled OG. Global to centralise sales as well. They can now hold cash in a single bank account so they can earn more interest on their money.

The Ultimate Fuss: E-R-Peace of Mind

MJ framed that ‘usually when a company gets to our level of complexity and size they move to an enterprise software system’. Both of our speakers agreed that ‘we love Xero because of all its functionality and ease of use’ but also identified that it is not well-equipped to cope with ‘the growing pains phase of finance function’ as Harriet describes.

The alternative of a move to an Enterprise Resource Planning (ERP) system is notoriously painful. MJ notes that ‘obviously, no one wants to go through that pain of ERP implementation’. Harriet describes ‘two big costs to moving to ERP: the financial cost which is very significant and the time cost to implement’. The cost implications of moving to ERP are dramatic: Xero costs an average of $45/m per entity, whereasNetSuite works out at $2,600/m plus a $25-100k implementation cost. Additionally, ERP implementation failure rates can exceed 75%. It’s clear to see why finance teams need to delay the move as long as possible.

When Harriet was a Finance Manager at Peakon, the company initiated the move to NetSuite when they reached $25m in annual recurring revenue. Harriet speaks from experience of ERP implementations as ‘hectic and horrible’ and shared that ‘for me, Xero’s super intuitive, NetSuite isn't. These big ERPs are not easy to use’. An additional benefit of sticking with Xero is that ‘with limited resources, I love having more junior people on the team and training them up, like grads and interns. It's great and we’d love to stay on a product where they can hit the ground running’.

MJ reported that OG. Global have been putting off the move because ‘we don’t want the initial investment or complexity, and Mayday has changed that a lot for us’. Xero’s functionality is undoubtedly stretched by intercompany finance operations, but app partners like Mayday extend those capabilities to cater to multi-entity groups.

Harriet thinks ahead, sharing that ‘the pieces that Xero is missing other than intercompany are things like automated recurring journals. Those waterfalls take a long time to set up but I feel that may be on the roadmap for a certain product…’😉. We are continuing to expand upon Xero’s functionality, moving into accounting adjustments that also affect single-entity businesses. See our product vision which details exactly how we plan to achieve this.

Once again, we want to thank Harriet and MJ for joining David and providing us with such a rich discussion around the Mayday products and more widely about the pains of moving to ERP, and how Mayday delays that undesirable move. It was great to understand why there is fuss today and how there is lots of scope for us to generate more fuss over the coming months and years!

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