Renewable Energy Accounting Software provider AccountsIQ is our Event Partner at RenewableUK Finance & Investment Conference, #RUKFinvest22 on 15 November in London. Here they give an overview of how modern, Cloud accounting tech can support renewable energy finance teams, by Darren Cran, COO, AccountsIQ.
Many of the technologies needed to achieve the UK/EU’s Net Zero strategy already exist. But we need to deploy them at scale – and fast. This presents many challenges for finance leaders in the renewables sector.
You have all the complexities of financing any surging industry, such as managing growth and maximising the returns of multiple assets. But you also have to assess all the different sources of public and private finance that are urgently needed to accelerate the energy transition.
Implementing a flexible and powerful Cloud-based financial management system (FMS) is the first step for renewable energy finance teams who need to:
· Track costs against individual renewable assets while under construction
· Manage multiple renewable assets (usually via SPVs) once operational
· Spread costs across multi-site operations with a dispersed workforce
· Handle multi-currency transactions for assets in multiple jurisdictions
· Consolidate group-wide results
· Deliver multi-dimensional management reporting
Here are 5 ways Cloud finance tech is helping renewable energy companies power their growth:
1) Automating and streamlining finance workflows
The manual data entry and processes involved in managing multiple SPVs can be huge and they get more complex as the number of SPVs grow. But processes like raising purchase orders, approving invoices, allocating costs to each asset, and handling inter-company/SPV recharges can all be automated.
We estimate that up to 90% of manual SPV accounting tasks are ripe for automation.
Justin Ampofo, Finance Manager with global renewable energy provider BayWa r.e, estimates that implementing AccountsIQ has freed up over 20% of his finance team’s time. That’s mainly due to automating key processes, such as expenses and approvals. Automation has also enabled them to go paperless, while maintaining full traceability and reduced human input errors.
Technology can also simplify multi-currency accounting and inter-company recharging. Global geoscience and consultancy group Getech used to manage their Sterling and US dollar accounting in Excel. Now, their finance system holds all the exchange rates centrally, with all subsidiaries using common exchange rates and the system automatically handling realised and unrealised gains/losses.
Getech’s Financial Controller, Simon Brown explains:
“AccountsIQ’s currency revaluation feature creates an automatic routine in the system which ensures accuracy in the calculations and reporting. The other aspect of our internal process that has greatly improved since we have implemented AccountsIQ is the inter-company invoicing. The system tracks what we are invoicing internally; when an invoice is received, it registers automatically in the subsidiary accounts.”
2) Access your finance system from anywhere
Although your renewable assets are at a fixed location, your teams are not. With a Cloud FMS they have complete anytime/anywhere access to real-time financial data. They can work from home or any of your sites and you won’t need expensive, high-maintenance servers in each location. Approval of POs and invoices can be via mobile app. All documents relating to accounts or transactions are stored in the Cloud platform and are accessible at the touch of a button.
3) Multi-entity consolidation
Renewable energy businesses are rarely single entity and often cross into multiple jurisdictions. That means you need a finance system that can consolidate multiple entities in multiple currencies in just one-click. This gives renewable energy finance teams full visibility of group-wide results, including their currency exposure, without the need for complex Excel models to consolidate results.
Consolidated reporting is an absolute must for any CFO managing multiple SPVs. Going off-system to manipulate data in Excel gets more difficult as the number of SPVs grow. One-click consolidation of actuals and budgets/forecasts, with proper handling of inter-company balances, accurate FX re-evaluations, and multi-dimensional reporting in the group’s currency is a major time-saver.
4) Multi-dimensional reporting across any number of SPVs
The advantages of controlling renewable assets via SPVs are significant but that doesn’t need to come with the disadvantage of having information spread across individual companies. Finance needs the ability to securely view the real-time results of all your individual SPVs and the consolidated results in your base currency across multiple jurisdictions – all on one platform.
Fincovi provides commercial asset management services to clients in the renewable energy industry and according to their CEO, Ray O’ Neill:
“We adopted AccountsIQ’s financial management software because the key to successful commercial asset management is the ability to see KPIs at a glance across the whole portfolio.”
Multi-dimensional reporting gives you the flexibility to design and build your reports with almost no restrictions on what, when or how you report. When you have less ‘noise’ in your finance system, you get much better visibility of financial performance. This makes it easier for finance directors to monitor performance, assess opportunities and manage risk across a complex portfolio of SPVs and assets.
Here’s an example of how this multi-dimensional reporting can work in practice:
Simon Brown of Getech believes:
“The biggest benefit that we see with AccountsIQ is that the data is dynamic; it is not just a report. We can drill down into the data, solve the query, and re-run the report accurately. We simply update or correct as necessary.”
5) Adding new SPVs or other entities is quick and easy
Renewable energy assets take time and considerable cost to build. Tracking the cost of the asset before it becomes operational is vital. AccountsIQ’s BI coding structure allows costs to be tracked easily to individual assets.
BI coding can be setup in an SPV from day one or transferred to an SPV once it is completed and ready to become operational. In AccountsIQ you can set up any number of new BI codes and SPVs/subsidiaries in minutes with the BI tracking all the way from the build cost to the operational performance. That’s important in a fast-growth sector like renewables.
As Simon Brown of Getech explains:
“The initial design of the subsidiary system becomes the template for new businesses within the group. The process for expanding AccountsIQ is simple, requiring only additional licences and the roll-out of the core system as it has already been modelled for Getech companies.”
Find out more about how finance technology can power your growth
As Event Partners, we’re delighted to be attending the RenewableUK Finance & Investment Conference, #RUKFinvest22 on 15 November in London. Our COO, Darren Cran, will be speaking and we’d love to see you there.
Watch the recording of our 30-min Finance Technology To Help Renewable Energy Companies Power Their Growth Webinar.
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