CFO Profile: Peter Jones, CFO, Westhaven
Peter Jones arrived in the aftershock of a shakeup at community-based charity Westhaven. The not-for-profit, turning over $50 million a year, had attempted to implement an on-premise ERP two years earlier which had ultimately been unsuccessful. The failure had a profound knock-on effect to the business; a new CEO had embarked on a major transformation that included sourcing a better financial platform.
“It wasn’t so much a case of whether we needed to put a new ERP in, it was accepted that the existing one wasn’t fit for purpose,” says Jones, Westhaven’s CFO.
One of Jones’ goals was to make sure the ERP didn’t require constant maintenance, had no issues exporting data, and was not near the end of the product’s life – the three main shortcomings of the previous system.
Another lesson from the failed implementation – keep a tight scope. A contributing factor to the previous project’s failure was an overly ambitious goal that required heavy customisation. “I always had the view that we were going to be better off using an ERP for the core finance function and then integrating best-of-breed technology solutions for our industry,” Jones says.
Jones organised demonstrations with the leading vendors and selected Oracle NetSuite. He pared back the modules to the essentials – accounts payable and receivable and the general ledger – the leanest setup that NetSuite would agree to implement.
“Implementing an ERP just for the core finance functions is a major project. By not expanding that out to the sexier side of what a system can do, you stand a much better chance of that going smoothly,” Jones says. The project took three months with Westhaven’s 12-person finance team managing the implementation alongside Oracle NetSuite’s team.
Knowing the numbers
Westhaven’s greatest concern was improving its reporting capability. The previous system was very clunky to use which made it difficult to extract data. This created huge challenges given Westhaven’s complex corporate structure; nine entities, one of which has a further nine business units.
Westhaven restructured on February 2021, after the NetSuite implementation. Jones uses NetSuite OneWorld’s reporting tool to create consolidated reports of multiple entities, run comparisons or drill down into single business units.
The OneWorld edition also eliminates intercompany transactions which Jones says greatly simplifies month-end reporting. He can run sense checks using template reports and investigate anomalies during month-end reporting much faster.
“I just didn’t have any visibility previously. I was entirely reliant on somebody in my team running a report and emailing it to me as a spreadsheet,” Jones says. “Now I can see what’s happening. “If I want to, I can drill down and do my own analysis. Not just me, that’s the whole team. It really improves the scrutiny and efficiency when we close our month-end.”
Month-end now takes five days instead of seven.
Faster, more detailed reporting has transformed Jones’ role as CFO. He has reduced his involvement in daily operations so he can take a more strategic perspective. Jones has implemented a mode of “trust but validate”. The finance team operates independently during the month, then Jones analyses the monthly reports and poses questions in the role of a difficult board member.
“We go into board meetings now having battle tested our numbers and our results. That’s a big change for us. It’s a big comfort for me as CFO,” Jones says.
The new ERP has created efficiencies outside the finance team. Senior managers now authorise invoices online, a process which has gotten rid of a whole load of paper.
Jones has aspirations to take accounts payable paperless too. The process is already faster, saving a day a week, Jones says.
“It’s not just the time (saving). It’s that aggravation factor of losing invoices and annoying customers and people taking phone calls because suppliers weren’t paid,” Jones says.
Jones also wants to roll out Oracle NetSuite to other managers in the organisation so they can view business metrics themselves rather than relying on the finance team to push out the reports.
Westhaven’s senior managers are experts in care delivery rather than commercial finance, Jones says. The finance team would need to assume the role of mentors to help line managers use their reports and make the right commercial decisions, Jones adds.
“Down the track it would be nice to say, ‘Here’s your dashboard, you also have responsibilities in the finance area.’”
On the horizon – integration, payroll and productivity
Westhaven has tripled in revenue over the past five years by providing services through the NDIS. Since implementing Oracle NetSuite, Westhaven has experienced double digit growth and now has almost 700 employees, up from 500 when Jones joined in May 2019.
“We have a system that’s more than capable of managing an organisation multiple times the size of ours,” Jones says.
Jones is aware that there is a lot more potential to squeeze out of the ERP. “We’ve got a Ferrari, and we are driving it like a Holden Commodore. If we need to put the pedal down and want to invest, those tools and capabilities are there.”
The finance team manually uploads data files for the CRM and also for payroll, currently running on Ready Pay (HR3). Jones says he is keen to integrate the payroll application to eliminate the manual uploading.
Other integrations on the list include productivity suite Google Workspace. The finance team will then export reports directly into the cloud-based spreadsheet Google Sheets rather than downloading first in an Excel format.
The finance upgrade comes at a time when the not-for-profit industry is on the edge of consolidation, Jones says. Operators with business systems in place that can deliver services efficiently will survive.
“The funding squeeze is already coming. Operating efficiently is going to be the name of the game. So I think we’re in a good position,” Jones says.