Case Study: AFH Wealth Management grows into an 80-90 million turnover business

An interview with Jon Sturgess, Finance Director at AFH Wealth Management.

Hosted by Steve Berridge, Director and Consultant at The Access Group.

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Steve: Hi, Jon. It's amazing how time flies, but I think you said that you actually went live almost at the point of the first lockdown.

Jon: Yes we went live during the first week of Covid.

AFH Wealth Management’s pain points before switching finance software

Steve: I know that your decision-making process took some time because there were quite a lot of moving parts. You were a growing organisation organically as a wealth management business. There were some additional areas, not just wealth management but other things as well which you will talk about in a moment.

And also the fact that you have multiple legal entities and you also were acquiring more legal entities. You had a bunch of Sage databases not talking to each other, intercompany transactions all over the place; management information was very reactive, not timely, and probably not massively trusted in some ways because of the way that it was being all squeezed together in a pretty quick fashion. You also had spreadsheets all over the place.

I think the board realised that there was a need for change. And that in itself often creates the business case.

When is a good time to change systems?

So is there a good time to change systems? Not really. And if you want to blame it on VAT quarter or audit or “we're changing who we're banking with” or “because of making tax digital”, if you want to make a good excuse there is always a good one to have. And therefore, decisions take a while to be made, deadlines are often missed and all those things.
So what I find quite interesting is that actually the reality is that if you put systems in place you do start to free up time and you start to benefit from those things. But it's kind of a bit of a chicken and egg thing there. I think you probably agree that there is a need to reduce those mundane processes.

Benefits AFH Wealth Management saw after implementing Access finance and accounting system

Jon: Yeah, I think we were at a point as a business where our monthly report and MI that we were producing for the board was delivered on time. It was as accurate as it could be with, as you said, amalgamating probably 30 to 40 Sage databases. I think it was 34 in total that we transferred into your Access database and then there were certain entities that we didn't even bring across on phase one. And we kind of just manually set them up as new companies within the new database. But yeah, I think in moving we were able to bring the timetable forward. But as you rightly say, as soon as you start bringing the timetable forward, you find all the other things that you can now do. The big advantage for us was the fact that of these 34 databases in Sage, not every single one was being updated on a monthly basis. And therefore your MI that you are producing for the board is the best that you can do at that point in time but it isn't complete factual. So that was the big change for us.

Steve: Indeed, and I think from the conversation that we had last week you've continued to make acquisitions. You've grown by 40, 50% or so since going live. But actually some of the entities are relatively small and you just bring a trial balance in on a monthly basis because the reality of transferring them across system isn't really that relevant. The volume of transactions that goes through is basically a journal that comes into the model each month. Is that right?

Jon: Yeah. When we integrated with yourselves we had a business model of acquiring businesses that ultimately the trading assets wouldn’t novate into our main trading company. But actually what we've been able to do since taking on an Access Dimensions is actually keep businesses trading individually, which we wouldn't have been able to do using SAGE as easily or not without putting in a huge amount of resource to keep the financials up to date. So the fact that we've been able to do that has been an added advantage for us because we've been able to look at some bigger deals that we've done in the last two years.

Steve: Great. And that leads really nicely onto my next question. You have a Chief Finance Officer, yourself as a Finance Director, Jon. And then you've got a team of finance people. And it's important to realise what resource has to keep the hamster wheel running whilst the new system is being implemented at the same time. And I think in your example, it was James who took that sort of role that I like to call systems accountant - somebody that understands data but also understands systems. And you were then updating the board or making sure that everybody knew what was going on from a sort of sponsor level. And your involvement was pretty heavy during the “What is it we're delivering? How are we going to structure the nominal?” Because I think there was a lot of restructuring to get more information out. And then basically once what was going to be delivered was signed off on, then it was down to James to work with our team in order to deliver that. Is that kind of fair?

Jon: Yeah. James was my assistant, he was the Financial Controller at that point in time. He was responsible for the implementation of the new system. He took the data request that the board and the CFO signed off on and had to deliver it. There was a huge amount of time and resource that not only James but other people in the team had to present to go through to implement the new system. But as we've talked about, you actually find efficiencies and time savings. And actually from a headcount perspective, considering we've grown from, you know, probably 50, 60 million turnover to 80, 90 million turnover as a business and as a Group, we've not had to put in any more resource to maintain that level of growth.

Steve: It's like if somebody left the finance team, the first question is: “Do we need another finance person?”. And it should be “Do we have enough resources within finance to be able to do that?” - and actually become more of a service to the organisation rather than just reacting and trying to get them to self-serve as much as they can to.

The AFH Wealth Management switching project means that now the purchase ledger is working well, the invoice approval is electronic, which is quite important during the likes of a pandemic when people aren't necessarily sitting behind a desk. And actually now what we're looking to do is see if we can control costs up front through procurement, requisitioning, then we know what we’ve committed to spend and what we've actually spent against our budget, getting budgets in systems and the like and therefore having control over costs upfront.

It's always great to have SMART objectives. “What are we trying to do?” “Are we trying to deliver management information quicker?”. “Are we trying to automate the bank reconciliations, whatever these things might be?” But if we do that, we're able to measure it and gain advantage of all of those things.