Finance functions are an essential part of any well-run organization.
Finance plays a significant role in collecting and analyzing data and using that information to contribute to sound management decisions. But as we’re bombarded with more and more data each day, it can be challenging to work efficiently and separate the signal from the noise.
Unfortunately, optimizing your finance functions for efficiency doesn’t have a one-size-fits-all solution. Maximizing finance’s performance requires focusing on simplification, prioritization, and automatization.
But first, you need to define your goal.
In business, few things are as important as defining your objectives. This applies to overarching company goals, like revenue and number of customers, and how you’d like your internal processes to run.
Define the perfect picture for your finance functions and set clear goals, so you have something to work towards. These goals should be specific enough that each team member knows what they need to do to achieve them.
Start by reviewing all existing policies and procedures to ensure they align with the company’s overall strategy and goals. Then, define the areas that need improvement.
Create a specific plan with clear objectives and timelines for each project so employees understand what to do, when to do it, and how much time it should take.
Follow up at regular milestones to ensure the team is on track.
Automating basic processes allows the team to focus on higher-value tasks such as analyzing data to make better financial decisions or planning for future growth.
Begin by ensuring your systems are up-to-date and fit your company’s size and growth goals. Upgrade your accounting software or other core systems regularly. The availability of cutting-edge SaaS tools means you don’t need to settle for systems that don’t offer the features or functionality you need.
Eliminate manual work by using third-party applications to automate standard functions like invoice processing, payroll, and A/R & A/P. Consider automating complex processes once they are stable and repeatable.
Finance processes should align with business processes and vice versa. Prioritizing integration ensures they work well together. A seamless flow of information and transactions between multiple departments makes access to information easier for all users.
Integration also eliminates overlap. Different departments or teams handle multiple parts of the same process in many organizations. This overlap in responsibilities reduces employee productivity because numerous people work on the same topic.
Integrating systems across departments, can eliminate these inefficient overlaps and streamline different processes.
When optimizing your finance functions, engage your team members. Encourage their suggestions and input as you’re searching for efficiency improvements.
Contribution from the team helps boost buy-in and engagement if they understand what to focus on and why. Ensure all team members understand their role within the company and train them properly, if necessary. This training will help them to better support other departments and provide valuable insights.
Engagement also helps with approval processes and gives the team an idea of why their work matters. Effective task prioritization gets the important things done faster, and learning to delegate where necessary frees up time for other, more urgent topics.
Finally, set clear deadlines for employees to focus on what they need to do and when to do it. The ambiguity surrounding unclear schedules can be highly frustrating. The more efficient your team is, the more productive they will be.
Accurate and precise reporting is essential. Good reporting shows you how everything is working, what needs fixing, where your money comes from, and where it goes.
Efficient finance functions should allow you to run up-to-date reports on demand to make quick decisions. If you don’t have this information at your fingertips, it will be challenging to make intelligent decisions about improving efficiency or profitability.
It’s not only financial reporting that’s essential to running a successful business; there are also non-financial and operational metrics you can track. Like monitoring financial metrics, following internal metrics can help you identify how well internal processes are working and where you need to improve.
Finance functions can be a significant expense for a business, primarily if they’re operating inefficiently.
An inefficient finance organization creates several issues. Not only are your team members putting in more effort than necessary for fewer results, but they’re also slower to deliver critical information so that company management can make informed decisions.
A company’s finance functions are often at the center of business operations, and improving their efficiency is essential.
If you’re not sure where to start, contact our team of experts at Founder’s. We can help you optimize your finance functions to make your team more effective and efficient.