How Mayday solved SPM's problems
May 3, 2023
SPM stands for Sic Parvis Magna - ‘Great Things from Small Beginnings’.
But great things need great software.
A Multi-entity Business With an Unmet Need:
SPM has 3 entities: SPM Applications in New Zealand, SPM Assets New Zealand, and SPM Assets Australia.
SPM Applications creates software that the other entities use for asset management consultancy. It only generates internal revenue by charging for use of their intellectual property.
There are also expenses that are incurred by all 3 entities for the benefit of the others, so these costs need to be redistributed.
Intercompany charges are an integral part of SPM’s monthly finance operations, to ensure that costs and revenues are allocated fairly (and legally). As a New Zealand headquartered technology business, SPM were early users of Xero. It makes producing regular and accurate income reports easier in many ways, but not when it comes to intercompany recharges.
Kelly He is responsible for the onerous task of calculating SPM’s intercompany recharges. Given that intercompany charges are such an integral part of SPM’s financial activity, Kelly needed a way to calculate these charges on a monthly basis. Unfortunately, Xero had little to offer as a solution to this requirement.
So SPM made their own
SPM's Homemade Solution
A few years ago, SPM deployed an in-house team to develop a software solution for their intercompany recharge requirements. After around a month of work to get this software up and running, the finance team were able to start automating parts of their month-end process.
Even with this technology solution in place, Kelly would spend several days retrieving numbers that their makeshift software had left out.
After ensuring that all of the necessary transactions had been included in the calculations, Kelly would set to work generating the corresponding invoices. She would have to post invoices from each entity, and corresponding bills in the others. All of the entities would normally be posting some (or many) recharges to the others, so a large amount of Kelly's month end workload came from generating invoices.
The team had to make regular enhancements to the software to keep it functioning as they needed it to, yet still there remained significant gaps in its capabilities.
When SPM’s Finance Director, Troy Swanson, decided to find out if there were any existing alternatives to their DIY software, he came across Mayday Recharger on the Xero Marketplace.
Kelly was more than willing to give it a try.
A New and Improved Solution
Troy and Kelly booked a meeting with Mayday’s CEO, David Tuck, to see how Mayday Recharger works. During this session, they learned how to create a recharge group for their 3 entities, and how to set up Recharge Rules that would ensure that the correct costs and revenues would be distributed appropriately.
Troy and Kelly liked what they saw, but they decided to put Mayday Recharger to the test. They took advantage of the 30-day free trial to run Mayday alongside their old system.
In the contest to close SPM’s month end, Mayday came out on top. The team found that the Mayday’s numbers reflected a higher degree of accuracy than the solution that they had been using for the last 10 years. However, Mayday’s strongest selling point was the reduction of Kelly’s workload.
With Mayday Recharger, Kelly saves an day of work every month. Thanks to the robust recharge rules, a larger number of relevant transactions were pulled by Mayday Recharger than their previous software, and the automatic generating and one-click posting of invoices saves Kelly a significant headache every month.
After seeing first-hand the improvements in accuracy and the savings of time that were possible with Mayday Recharger, SPM opted for an annual subscription straight away.