In this episode of Tech in the Arts, AMT Lab Lead Researcher Ian Hawthorne sits down with Stewart Urist, General Manager of the Pittsburgh Public Theater, to discuss their transition to Sage Intacct, a cloud-based financial management software. They delve into the challenges of migrating from a legacy system, the benefits of automation and AI in financial processes, and how tools like Sage can empower nonprofit organizations to streamline operations and improve budget transparency. Whether you’re considering a software transition or just curious about nonprofit financial management, this episode offers valuable insights for organizations of all sizes.
Transcript
Ian Hawthorne
Welcome to Tech in the Arts, the podcast of the Arts Management and Technology Lab here at Carnegie Mellon University. My name is Ian Hawthorne. I am the lead researcher here at AMT Lab, and today I'm going to be interviewing Stewart Urist. Stewart's the general manager of the Pittsburgh Public Theater, and today we're going to be talking about their shift to Sage Intacct, a financial management software, and what that was like for them as an arts nonprofit, and what other arts nonprofits might expect from a similar shift to a similar type of software.
So, I would love if you could just start by giving a bit of a brief overview about what Sage is. I know some people who are listening might not be finance professionals. They might not have a lot of experience in the finance department. So just if you could give a brief overview of what it is, what the software does, and why it's important.
Stewart Urist
Yeah, sure. So, Sage Intacct, which is the cloud software specifically that I have is an accounting platform like QuickBooks that many small nonprofits use (e.g. NetSuite, Dynamics). There are a bunch of different providers that are in this space. Basically, it's a tool, a specialized kind of database that we use to record all the financial activity of an organization, and what I would say distinguishes Sage Intacct is that it’s cloud based. So, it's accessed via the web which makes it very convenient and friendly to desktop computers or PC access, and the amount of customization and integration that is possible with it, which I know we might talk a bit about later. But I would describe it as a fully featured platform and one that is in active development.
Ian Hawthorne
Nice. So, people who may have experience with clunkier platforms or desktop-based platforms, this is much more streamlined. This is much more web-based.
Stewart Urist
Yeah. I mean, it was designed more recently than some of those kinds of legacy platforms. And so, it was able to benefit from that more contemporary design thinking. So even if you're using an old platform, like before I was using Sage Intacct at the theater, I was using a platform called Fund EZ, which is meant to be hosted on a computer and, even when you access it remotely like they offer a service to, it's called hosted access. It's just running on a box that they control. So, you're remoting into a computer. The differential in something that's made to be access online by the cloud - the touch and feel experience of that, the speed experience - versus remoting into a virtual PC to access the software, it's much, much better. And then you add the active development cycle on top of it where they are able to follow contemporary trends and they have AI, which is a big thing in accounting, for example. They have some AI tools that are in their AP space to look at things that you regular code and they'll try and get in there and help you. So, they're pushing forward in interesting ways.
Ian Hawthorne
Yeah, it sounds very advanced. I know that personally, and many of our listeners may have experienced with those server-based programs if they've been in any nonprofit who has less of a budget or just has been operating in the past 10, 20 years. So, this is definitely more contemporary.
I want to talk more about the AI features maybe a little later. To pivot in terms of how easy it was to use, you did mention in your article, a process of moving your organization from one financial management system to Sage. I'd love to hear a little more about the background of what that was like.
I don't know how many people have been through an internal financial transition like that, but I know that it can tend to be a bit messy, a bit prolonged. I think you said it was from June to September, which actually feels quite short for something like that, but I could be wrong. So, I'd love to just hear a bit more about that story.
Stewart Urist
Yeah, for sure. So, I started with the theater following a lot of the kind of turnover that many organizations experienced in COVID, right? So, at the time, at the organization, the finance director had moved on and then the other full time staff member had moved on. So, when I came in they had one part time staff member who was doing mostly AR for a few years. And then, they had some consultant support, but that was it. They were about five months in without a finance director. So, it really was one of those “opening the tomb” situations. All the skeletons came out and you're like, “Oh my gosh what is this?”
Trying to discern financial process and figure it out, and bolt it all back together. And that was working in an unfamiliar database, Fund EZ, that I got some training in and also just discerning how this accounting department worked, which most of his processes were designed by a long time staffer which is the way of nonprofits that you have a great person, you hold on that for a long time. So, they were there for the first 39 years of the company, which was pre-internet, pre-spreadsheet. So, the legacy of that paper-based thinking was very evident in all the processes. We had to get the plane flying again first and the first priority was staffing back up. And trying to discern the existing, like how we could finish out the year and how to get the routine entries done. So that work happened in Fund EZ.
First, I learned the old system and kind of discern, divide the old processes. We did look for some opportunities to streamline there because we were coming in after the pandemic, people used to remote work and out of necessity during the pandemic, they had built out some processes some internet-adjacent processes. So instead of printing out the check requests in triplicate and having them signed, they would get them e-signed and then they'd all be filed in directories by check requests in that week' s run. Now, is that as simple as an accounting system where you can attach the backup directly to the invoice and have that be your full database - which is what you would want? No, it's not, but it was a step towards that process. And so, we did some incremental change early on moving away from that. We used to print out the credit card statements like the PDFs for everybody, and then they would hand code the little expenses. So just going to a spreadsheet where like you could import that into even the legacy system allowed for that. So, the initial process was figuring out how it worked, getting a team on board that could support me in some of the day-to-day, and trying to take some easy wins where we could.
That was like summer of 2022, up through the rest of that year. And then as we got into 2023, we really knew the system was deficient. We knew Fund EZ was deficient. And that's when we started thinking, when are we going to move on from this?
Because you can only get so far pushing things into spreadsheets and then pulling those spreadsheets up. It's better than hand typing things in, but it's not as good as when computers can talk to each other and things can be integrated and be automated. And the issues with like our VPN making remoting into this environment challenging. We were recognizing all the deficiencies of the system and, over time, came to a conclusion that we really needed to make a change for the good of the business.
And then, as you said, once we actually made the decision to move, it was from June of 2023 to September that we did all the crosswalking and all the migration, all the data imports. It was a very fast process. I'd recommend more time if you have the luxury, but our season starts, our fiscal starts with September. So, breaking it on the fiscal period kind of made the most sense for that move.
Ian Hawthorne
So that is pretty impressive that it was able to happen essentially in what three to four months, basically. And building off that, I'd love to know what Sage's role was in helping you onboard. You mentioned before that you worked with a consultant in order to help onboard you and your staff. So, I'd love if you would just talk a little more about that and their role in it all.
Stewart Urist
Yeah, so there's a number of different ways I think that accounting systems get implemented. But Intacct, how that team prefers to work, is your subscription is directly with Sage Intacct. That's where you license the software from, and they do have resources like Sage University which has training videos and they have customer success people who will talk with you and can do some kind of targeted consulting.
But for the implementations, they work with partner firms. Typically, these are accounting firms that have a tech wing. The firm we worked with was called Armanino, and they had a lot of experience working with nonprofits. And they had recently done an implementation for, the people I was working with, for the nonprofit opera company that used Tessitura, which is our CRM system as well.
So, they had to find that familiarity with the particular practices of the nonprofit arts to have, consultants, via this firm that we could work with on implementation. And this firm is actually bringing a solution to the Sage marketplace, to integrate Tessitura and Sage Intacct. They were good folks for that purpose, a better level of support than I would have been able to get working directly with Intacct staff because they had specialized in this nonprofit practice.
Ian Hawthorne
Nice. Would you say that Sage integrates very well with Tessitura, which is currently your CRM? And if so, what does that kind of look like for someone who might be more familiar with a CRM, but less with a financial software?
Stewart Urist
Yeah. Well, we're not yet there. That's one of the areas of opportunity. And there's different ways that people go about these type of integrations. But I would say our mindset has been like a “crawl-walk-run,” is what you might call it. So, starting with something less automated, more hands on and working up to the systems actually talking to each other.
So we're in the crawl phase right now. And the first thing that's got to be done is the codes that are in our Tessitura ledger in Pittsburgh. We have a remarkable collaboration called shared services, and there are 10 cultural institutions downtown. The shared services initiative is housed in the Pittsburgh Cultural Trust, which owns a lot of the venues downtown, including our theater. But for the shared services initiative, we have one big Tessitura instance, which is great for cost management, for having administrators, for being really at the bleeding edge, and learning across the district.
But my point is that we need to… There are codes in there that mean nothing to us that were set a long time ago. So, we need to provide the Tessitura instance with ledger codes that mean something to us. So that first we can crosswalk the Tessitura to our regular ledger to just have a kind of spreadsheet-based import. And that's what we're working on right now is just can we get codes out here that result in something importable. And once we have that in place, then we can go to like the next level that Armanino has built out or another provider that would allow the systems actually to pull it in and have kind of, ideally a draft journal entry for that day that you would just approve on. But right now, with the complexity of how contributed revenue is booked, especially of a capital campaign going on, how earned revenue is booked, which has all these different events and considerations about timing, like when you would release money from like a restriction because it's for a future period. There's enough complexity there that our finance team still wants to be hands-on with it. But I do have high hopes that you know, like this is something I did build out at Forge Theater where they had DynamicsGP and I got that up past the crawl phase of like we had a file that came right in, we could review it, we could approve it, we could push it, and it saves so much data entry time.
So, I think it's a good objective to work towards. And then it's just removing some of the human errors of people like hand keying in the numbers from one system to another. You're going to have mistakes that way, and it's a lot easier to get it in clean and to focus your kind of management and cleanup effort elsewhere.
Ian Hawthorne
Definitely. But the capabilities are there, which is a very important part there, particularly with Sage.
Stewart Urist
Oh, yeah, for sure. I said there's like a marketplace of different integrations and implementations. It likes to talk to payroll providers. It likes to talk to credit card expense management programs. That's one of the strengths of Sage Intacct. In general, it's built for this type of integration to external systems, you know, and we do have it talking directly to BILL Spend & Expense, which is what we use for our credit cards. So those can push in directly. And it talks to our banks, which is having those transactions loaded right in and being able to have things match or even create journal entries automatically based on rules that we have configured. It really smooths the bank reconciliation process. And again, it ensures the completeness of your activity. If everything from your bank trend, from your bank feed, like from your bank statement is showing up in your accounting system, you can't miss anything. You just need to make sure you attribute or match the activity.
Ian Hawthorne
Yeah. And so, I know you had mentioned this in your article as well. While we're on the subject of integrations, have you ever, since starting Sage, have you added integrations that you maybe didn't initially request in the setup phase? And if so, what was that like? How easy was that? And how easy was it also to educate staff on that going forward when it came up?
Stewart Urist
No, it's a good question. I would say in the integration realm after implementation, because this was only less than a year ago that we went live. So, Tessitura is the next big hurdle for us and that's where I've focused on is getting past this mapping in this phase. We also brought in a new leader of the finance department. So just handing off the platform, having the benefit of crossover, like me having been in that seat and handing it off to another individual to lead the department. I think we were focused on how do we train people in the system and manage the existing tools smoothly and not have any backsliding versus trying to add new, new, new.
I would say the thing we focused on is really leveraging, instead of adding new integrations, it's helping our budget managers utilize the tools that exist within Sage, which are robust, and building processes around it. So, they're checking in on their budgets, which they can see live now, which is huge for them, you know, that budget versus actual activity. So, this chapter has not been so much about integration, although I do think we're going to come back to trying to streamline everything. It has been about given that we have a higher-level software, that now instead of it being gatekept by finance, other users have a view-only access, which is huge, how can that make them better budget managers, better able to administer their programs and, give them timely information on their attainment of the organization's financial goals?
Ian Hawthorne
That's an excellent point. Let's talk about that for a second, because you did mention an open budgeting process, and I know a lot of people listening who may have experience in an arts organization or even just a nonprofit organization know that budgeting is a huge task. A lot of people approach budgeting very differently, and so I'm just wondering how Sage helps in the budgeting process, what that may look like for people both in the finance department and outside of the finance department, and how you are managing something that is able to make it more open like Sage seems to do.
Stewart Urist
Yeah. So a couple of threads to tug on here. I think starting from the endpoint, actually, where the budgeting has been done and it has been uploaded into Intacct. Right? There are a couple of ways to get it in there. But just imagining that it's in there. Having timely access to budget versus actual figures seems so rudimentary, but because of how long it can take to close a month and have financial reporting ready, often organizations work on this delay. And so, the nice thing about it is you can build dashboards, or you can build reports that will show up directly in people's email inboxes. You have a lot of automation possibilities, just putting them in regular contact with their numbers and down to the day. Like If I enter an invoice, and I book it to somebody's department, they're going to see that invoice, data to date immediately in a live way in their actuals. So, it removes that time delay. you know, you do need to have financial period closing and look at it in periodic chunks when you know all of a month's activities are in. But it puts people more in touch with their numbers and it removes the nuts-and-bolts questions that you get of like, “Hey, did this person get paid yet? Has this bill been entered?”. They can click right in. They can see. “Oh, yeah, it was check 6782 and it was cut on this day.” So, I don't even have to go bug the finance people. They can focus on their stuff about it. I have that info at my fingertips. It's great and the staff really likes it.
But in terms of getting it into the system in this open budgeting, there's a lot of ways to accomplish it. So, we used to have this monstrous Excel workbook that I'm sure many people can relate to having their own monstrous Excel workbook and every department had a slice of it. They did their budgeting. We stitched it together and then it was like, “sorry, you gotta cut 15%, so like, have fun.”
So, It's a lot of passing sheets back and forth, which results in version control issues, or if you're sharing access to the sheet, you're worried about somebody breaking something they shouldn't have access to. You can certainly do it that way, and you can get that into a CSV and import it into the Sage and then have all the benefits that we were just talking about in terms of the live access and that budget information lives there according to how you built it. But the other tool we opted into, is called Sage Intacct Planning (SIP), which is like another tool that they own, and that's an integration., but it talks directly to the budgeting module. So, the advantage of SIP is that I can slice, I can share pieces of that with individual budget managers. If I have a marketing director, I can share just the marketing slice there. And then, so maybe I built out, where I think, the things that are known for marketing, I know what the salary and wages are going to be. I know basically how much they spend on each show. And then the marketing director can have the ability to get in there and edit and then I don't worry about them breaking anything. But they see live, if something changes or needs cut, they have access to that right away. There's no issue of “oh, I had an old version of the spreadsheet.” “I didn't know that the budget changed this way.” “I only discovered it when it came into the system.”
So, we're building it together in a kind of collaborative way. And it's the same thing that can be done for forecasting in there, which is really nice. When you're coming back together mid year, you can share those same slices of the budget or, if I'm working with the managing director, I can share the whole thing and we can go down through all of it.
But maybe they only have view-only access because they want the finance staff to do the editing on it. So, it's quite a nice tool. And then, actually pushing it into Sage, you know, it's like one button. And then it just like puts it in there. The old version of the budget gets saved as a copy so you don't lose anything. If I have reports built that are looking for my annual budget or whatever, they will all point to this new version that I pushed up if that's how I've configured it, which is nice to have something that’s so complete and you can see all the history really easily. You can revert things. It's just a lot less prone to error than a big messy spreadsheet is. You know, you mess up a formula somewhere and like, oops, that was 50, 000 bucks that didn't make it into my budget.
Ian Hawthorne
Definitely. I'm hearing a lot on access and expediency, which seemed to be some of the biggest things here where you can slice and dice it. This person or this department gets all they need. They don't need to be overwhelmed by anything. Access can be easily controlled.
Stewart Urist
Yeah. It's about what do you believe the role of a finance department in an organization to be, right? Are they gatekeepers that enforce process and keep the rest of the organization in line? Or is it essential, underpinning machinery that when it is working well it's relatively quiet, but makes everything else that happens in an organization a little bit easier to do. I do believe in the importance of setting standards and processes, but I do think that finance departments need to serve the main mission of a nonprofit organization, right? And need to be focused on helping people know where they are against their budget, and be able to get payments and things. It just needs to be focused on that streamline, that expediency, that making it easier for everybody, in my opinion.
Ian Hawthorne
Yeah. I love that note you made about it not being gatekeepers because I do feel like a lot of people can develop this dynamic and a lot of finance departments might not do much to help alleviate that. But it really is such a fundamental machinery. Like you said, every organization needs a healthy finance department and they also need people to be able to work with the finance department so that it all functions, so that you make your year-end, so that you can pass your audit.
So, two last questions. You mentioned AI and this is the Arts Management and Technology Lab. So, I have to ask where would you, you don't have to give a comprehensive list, but where do you see AI impacting this type of software the most? You can focus on Sage, but also what have they maybe been advertising in terms of AI, increasing their capabilities, making your life easier. What's the state of AI there?
Stewart Urist
Yeah. I mean, I think there is a lot of routine, repeatable activity that happens in the accounting world. And that's personally, and being new-ish to this space too, where I see the opportunity for AI. But when I engaged with AI tools, it was not a replacement yet, perhaps for higher level critical thought analysis, the judgment that comes from knowing the specifics of your industry and how things need to be applied and enforced.
But when it comes to, “oh man, here's a health bill. It always gets coded to this place, it's health,” the accounts payable or accounts receivable these things that have a lot of like routine like “Here I go, typing in the five digit account code, it's this department.” That's the type of stuff that I think it's some of the initial places that I've seen Sage Intacct focused on is like, “Hey when there's trends here, let us suggest what's going on.” Instead of a human having to take the time to like, “Okay, the PDF bill goes into my invoices box. I'm going to open this up. I'm going to look at it. I'm going to type the vendor information and I'm going to decide what code it is. And then I'm going to send it to the manager for approval.” That's stuff that it's good to have a human's eye. You need a human's eye on that at some point in the process to make sure it's going right. But certainly, OCR, you know, text reading exists, so it can scan that it can pull out the address and the vendor and stuff. And it can look to where you've coded things for that vender before and make a pretty good guess about what's going on in here. So, I think that's the no-brainer space where AI can come in and help streamline some of the routine coding. Like AI is good at looking for patterns to, when it comes to routine entries, allocations, and things you do periodically. I think there's probably potential in that realm too. Although I'm not well educated enough to know the mechanics of it, I know there is, within Sage Intacct, an “Enable the AI” kind of support, and then there are different ways that they're looking at building that. That's pretty recent in their release notes, like one or two versions ago adding this and I'm sure that’s where they're going to be interested in because it's where they can, it's a much more expensive platform than my previous software was. That is the other side of this stuff. But it's a way to demonstrate that value and to bring the benefits of a more sophisticated, higher level systems there.
Ian Hawthorne
Yeah, no, that's exciting, definitely for all the accounts payable professionals out there who can save some time on the routine monthly bills.
Stewart Urist
Right. And focus on the higher-level work they would wish to be doing in terms of going back and managing that balance sheet or seeing what's outstanding, sending those dining notices, and building the relationships with the vendors that are going to make things, getting on electronic payments. The things that our person-to-person, that are discretion, that are management based, and are less like, "I'm going to type the numbers from this thing into this thing," which will numb you after a while.
Ian Hawthorne
Absolutely. Maybe get people even more excited about wanting to pursue finance careers or roles in this space, that they maybe even didn't think about because they did think, “Oh, it's just a lot of data entry,” or something like that.
Stewart Urist
Yeah. I mean, there's so much need in the finance space. If that's an opportunity that comes with it, that'd be great.
Ian Hawthorne
Absolutely. And so last part I'm glad you mentioned pricing because I want you to have the space basically to recommend to any nonprofit out there or financial manager of a nonprofit. If you are thinking of changing your financial management software, whether it's to Sage or just you need a change, what would be your pieces of advice in terms of balancing costs, access features, AI? What would be your pieces of advice for someone on a high level?
Stewart Urist
Yeah. I think like with any technological platform, tech is a tool, right? It's like a means to an end. It's not like a solution in and of itself. It's not something that's virtuous for its own sake. So, I think you have to start within the needs assessment frame about how much do we actually need.
For a nonprofit that has maybe a couple million dollar operating budget, QuickBooks online might be exactly where you need to be. But in that needs assessment, you might notice things that are deficient in your system. Like ours could not talk to the bank. Ours could not receive, in an automated way, any external reports or any data sources. Our reporting was deficient, right? We couldn't kick a balance sheet and a P and L out from there that was usable for presentation purposes, so I had to kick it into Excel and spent hours and hours.
So, you need to identify, what are the desired functionalities, and then try and price how much would it be to seek that out. Like, I knew we had an interest in reporting and timeliness of data in integration, and I vetted a few platforms. Sage was the right fit given the size of our business, which is about an $8 million operating budget, and the complexity, which we had more than a dozen different departments and programs within that. The dimensionality of it was very complicated and not well served by that old system.
So, I don't think you need to just seek out the biggest, shiniest thing. It's not going to be right for everyone. But if you have unmet needs like, it's good to check in - is this tool adequate for our needs? And would a different platform provide benefits such that it outweighs it? The Sage folks actually had a worksheet where they showed what they anticipate in terms of staff time savings, on the kind of routine aspects that would be able to automate to help us make the case for why this is right. Because on paper, it was 10 times more expensive than our previous implementation. But the quality of what the finance department is spending its time doing instead of data entry, very manual paper-based reconciliation process, the ability to automate the routine work and focus more on the quality of that reporting on the timeliness of our month-end close. Overall, the business results make it worth it. Our machine is better and quieter under the hood from having gone through that. But I think you also need to be worried about not biting off more than you need. Sage is a mid-level solution. Oracle or something like that is what the big enterprises use. There are good platforms at various levels, but I would be wary. You get what you pay for a little bit. And not to ding my friends at Fund EZ, who I think are offering a product at an unbeatable price point. But I think in a contemporary accounting environment, I felt so much was missing in terms of where I know things to be that even, a tool like QuickBooks Online, which is much more affordable than Sage is. Even the amount of integration and automation that exists in a platform like that, you can get snippets of this at a lower price level, depending on what your needs are.
Ian Hawthorne
Absolutely. So matching the size and scale of your organization to the needs, to what the platforms provide.
Stewart Urist
Yeah. Start with what you need and don't let the salespeople tell you.
Ian Hawthorne
That's a very important point to end on as well. Do not get pushed by salespeople unless they're giving you exactly what you need, in which case might be good.
Stewart Urist
Yeah. In kind. We love that.
Ian Hawthorne
In kind. Well, thank you so much, Stew, for talking to me today about Sage Intacct. Really appreciate this. Hopefully this is helpful for anybody out there managing finances, dealing with finances, or thinking about a change like this. Thank you so much.
Stewart Urist
Yeah. My pleasure. Thanks so much for the time.