When Your Finance System Cannot Keep Up: The Online Betting and Gaming CFO’s Challenge

High transaction volumes, multiple entities, multiple currencies, multiple jurisdictions, PSPs, player balances and regulatory scrutiny make finance within online betting and gaming unusually complex. For the CFO, this complexity is not an occasional challenge. It is built into the operating model.

An operator may be processing significant volumes of player deposits, withdrawals and other transactions while simultaneously managing payment service providers, bank accounts, suppliers, affiliates, gaming duties, multiple licences and legal entities across different jurisdictions. As the business grows, the finance operation has to keep pace, and this is often where the limitations of an existing finance system begin to become apparent.

The challenge is not necessarily an overreliance on spreadsheets. Many operators already have established accounting or ERP systems and well developed finance processes. The issue may simply be that a system which served the organisation perfectly well five or ten years ago can no longer deliver what the business requires today. Reporting may require more intervention, integrations may be difficult, additional modules or third party add ons may be needed, or an on premise system may no longer fit comfortably within an increasingly cloud based technology environment.

For the CFO, this raises an important question: Is the finance system genuinely supporting the way the business operates today, or is the organisation increasingly adapting its processes to accommodate the limitations of the system?

When growth creates financial complexity

Online operators rarely grow in a straight line. A new licence can introduce another jurisdiction and its associated regulatory and reporting requirements, a new market can bring another currency and banking relationship, an acquisition can introduce additional entities, and a new PSP can create another settlement and reconciliation process. Increased transaction volumes can place further pressure on integrations and the month end close, while management may simultaneously demand faster and more granular reporting.

None of this means the existing finance software is necessarily inadequate. The organisation may simply have moved beyond the requirements the system was originally selected to address. The warning signs tend to appear gradually, processes require more manual intervention, reporting becomes harder to produce, integrations become more cumbersome and new requirements increasingly depend on additional modules or third party products.

Add ons themselves are not the problem. They can provide excellent specialist functionality and extend the useful life of an established finance platform. The question is whether the overall technology environment remains efficient, manageable and appropriate for the organisation it now supports.

The GL reconciliation challenge

Reconciliation is important in every finance function, but the sector can introduce a very different level of transaction volume and complexity. The general ledger may need to reconcile with data originating from gaming platforms, bank accounts, PSPs, payment gateways and other operational systems. Deposits, withdrawals, PSP fees, commissions, settlement timing, chargebacks, refunds, bonuses, adjustments and foreign exchange can all contribute to differences that finance must identify and explain.

A transaction appearing within one system does not necessarily mean that the corresponding movement has reached the bank or been recorded in the GL in precisely the same way. For a growing operator, reconciliation therefore needs to become a controlled, repeatable and increasingly automated process.

The objective should not be for finance to manually inspect every transaction. A more scalable approach is to automate the predictable and focus people on the exceptions. Established matching rules can deal with transactions that behave as expected, while the finance team concentrates its expertise on discrepancies that genuinely require investigation. This principle of managing by exception can substantially reduce the administrative burden while retaining financial control.

Multi entity, multi currency and multi jurisdiction

For an online operator, international expansion is about considerably more than supporting another currency. Different jurisdictions can introduce separate legal entities, licences, banking arrangements, tax treatments, gaming duties, regulatory requirements and reporting obligations. The CFO still needs to maintain a coherent view of the group while preserving the appropriate controls and reporting within each individual entity.

Finance should therefore be able to manage individual entities appropriately while consolidating information efficiently at group level. The CFO should be able to understand performance across entities, currencies, jurisdictions, brands and other relevant dimensions without creating an unnecessarily complicated reporting process.

Intercompany accounting is an important part of this. Management charges, shared costs, central services, technology, marketing and other expenditure may need to be allocated between companies. If transactions have to be created independently within separate company databases and subsequently reconciled, the administrative workload can increase substantially.

A modern multi entity platform can automate much of this process, helping to ensure that both sides of an intercompany transaction remain aligned. This allows finance to maintain individual entity control while gaining a clearer and more timely view of the group as a whole.

Financial control without slowing the business

Operators need to move quickly. Marketing teams launch campaigns, technology teams procure services, new suppliers are introduced, advisers are engaged and operations may span several departments, entities and territories. Finance needs to maintain appropriate control without becoming a bottleneck.

Authorisation workflows therefore need to reflect how the organisation actually operates. An approval route might depend on the legal entity, department, transaction type, value, project or responsibility of the individual involved. Higher value transactions might require additional levels of approval, while certain expenditure may require specialist authorisation.

The value of a well designed workflow is that these rules become part of the process rather than something finance has to police manually. For the CFO, it provides a clear record of who requested a transaction, who approved it, whether they had the appropriate authority and what subsequently happened.

This is particularly valuable in a regulated environment. When an auditor, regulator, board member or investor asks how a transaction was processed, finance should not have to reconstruct the story from emails, separate applications and supporting documents. The audit trail should be created as part of the transaction itself.

AP automation and the wider finance workflow

Accounts payable is another area where an established system can begin to show its limitations. A modern operator may have a substantial supplier ecosystem covering technology, software, data, marketing, professional services, property, contractors and other operational expenditure.

The issue is not simply entering supplier invoices. It is the complete process of receiving, coding, reviewing, authorising, posting and ultimately paying them. Where each stage requires manual intervention, the finance team can spend a disproportionate amount of time administering the process.

AP automation allows the system to undertake more of the predictable processing while finance retains responsibility for review, control and exceptions. Combined with configurable authorisation workflows, it can also provide better visibility of invoices that have been received, approved or are awaiting action, giving the CFO a clearer picture of upcoming liabilities and cash requirements.

Is the underlying architecture still right?

As requirements become more sophisticated, organisations can find themselves adding functionality around a core finance system that was not originally designed for their current level of complexity. AP automation may sit in one application, reporting in another, document management elsewhere, with additional products supporting consolidation, expenses, approvals or integration.

There is nothing inherently wrong with a best of breed approach. However, the CFO should periodically consider the total architecture rather than each component in isolation. What does the complete environment cost to license and maintain? How many integrations need to remain operational? Where does the data reside? How easily can the organisation upgrade or introduce new requirements?

The same scrutiny should be applied to cloud technology. Being able to access an accounting system remotely does not necessarily make it a modern cloud finance platform. More relevant questions include whether servers still need to be maintained, whether software has to be installed locally, how upgrades are managed, how readily the platform integrates with other applications and whether teams in different locations can securely access the same financial environment.

For an international group, these considerations can become increasingly important. The finance architecture needs to support a distributed organisation without introducing unnecessary technology or administration.

A faster close and better management information

One of the clearest indications that an organisation may be outgrowing its finance environment is the amount of effort required to produce reliable month end information. If the finance team spends significant time collecting information, reconciling systems, posting repetitive journals, processing accruals and prepayments, resolving intercompany differences and consolidating entities, the underlying processes deserve closer examination.

A modern finance platform should automate repeatable activity throughout the month rather than leaving finance to reconstruct the position at month end. Reconciliations, recurring journals, accruals, prepayments and other predictable processes are all areas where greater automation can reduce repetitive work and allow finance professionals to concentrate on exceptions, analysis and decision support.

A faster close is therefore more than an efficiency measure. Management information becomes more valuable when management receives it sooner. The CFO who has reliable information earlier has more time to understand performance, identify emerging issues and influence what happens next.

The quality of that information matters too. A statutory chart of accounts will rarely answer every question a CFO needs to ask. Management may want to understand performance by entity, jurisdiction, brand, market, department, cost centre or another operational dimension. The core finance platform should provide sufficient analytical flexibility to make that information readily accessible.

The objective is not to eliminate spreadsheets. They remain extremely valuable tools for finance professionals. The objective is to ensure that the core finance platform remains the reliable source of financial truth, with spreadsheets used for the tasks they are good at rather than to compensate for limitations elsewhere.

Where iplicit and 4GL Concepts fit

iplicit is designed for organisations that have reached the point where entry level accounting applications or legacy finance systems are no longer providing the functionality, flexibility or scalability they require. Its cloud based financial management platform brings together capabilities including multi entity and multi currency accounting, GL and bank reconciliation, AP automation, configurable authorisation workflows, intercompany processing, consolidation and real time reporting.

For online operators, the attraction is not any single feature. It is the opportunity to bring more of the core finance operation together within an integrated environment that can support the complexity of a growing, multi jurisdictional business.

Technology alone, however, is only part of the answer. 4GL Concepts Ltd is an authorised iplicit partner, operating from Gibraltar and London and working with organisations in Gibraltar, the UK and internationally. Our experience encompasses both cloud and on premise financial management solutions, so our starting point is not that every established system needs replacing.

We work with organisations to understand how their finance operation functions today, where the existing technology is performing well and where limitations are beginning to appear. For operators, that means considering the wider financial environment, including entities, jurisdictions, currencies, reconciliation, reporting, controls, integrations and future business requirements.

Where iplicit is the appropriate solution, 4GL Concepts can support the journey from initial assessment and system design through implementation, migration, integration, training and ongoing support. The objective is not simply to replace one accounting package with another. It is to help create a finance environment that is appropriate for the organisation today and capable of supporting where it wants to go next.

The question for the CFO

The question is not simply whether the current accounting software still works. In most cases, it probably does. The more revealing question is how much effort the organisation now expends compensating for what that software cannot do.

Reconciliation becoming increasingly difficult, consolidation taking too long, new jurisdictions creating disproportionate complexity, reporting requiring excessive intervention or important functionality continually requiring another add on can all indicate that the underlying finance environment deserves another look.

Perhaps the most useful test is to look ahead rather than at today's requirements:

If the business doubled in size, entered additional jurisdictions or significantly increased transaction volumes over the next three years, would you want to run the finance function on the same architecture you have today?

If the answer is uncertain, 4GL Concepts and iplicit can help you explore what the next generation of your finance platform could look like.