By Sebastian Marchon, CEO at Rydoo
Finance Operations seem to face never-ending pressures, with an ongoing need for teams to be more efficient and do more with the same (or less). So how can you supercharge your finance department and make some time in your day to do those value-add tasks that you really enjoy doing?
We’ve put together a list of the 7 best ‘big wins’ that can really transform your finance department and help you make the jump to the next level.
#1 – Ask yourself “why?”
This has to be the very first thing you need to do if you want a truly slick finance operation. Instead of asking yourself how you can do something quicker or easier, ask yourself “Why are we doing this?”
It’s no surprise that in many organisations there are lots of tasks that are being done just because they always have been. For example, producing reports with no real use by the recipient, or spending hours filing paperwork when you realise it could be paperless.
If there’s no good reason for a task to be done then don’t do it.
#2 – Delete, delete, delete
This is one of Elon Musk’s favourite sayings and it seems to have stood him in good stead. His view is that if you haven’t reached the point where you think you’ve deleted too many processes then you still have some work to do. Now, whilst deleting processes until the wheels fall off is not recommended, there is a lot of sense in this lean-approach.
In finance, departments tend to seek comfort in doing the familiar old routines to manage the daily finance operations. However, many times these old routines don’t add value, improve control or produce insight. Therefore they need to go.
#3 – Trust your people
If you are having trouble asking “Why?” about all of your processes then the question has to be “Why are you trying to do it yourself?”.
Your people have a wealth of knowledge about their jobs and the company they work for so asking them to help with your systems and processes is a good place to start. Make it a finance team special project and get everyone involved. Get them asking why they do things and see if any overall themes emerge.
Very often you’ll find that there are whole chains of tasks that different people do that can be deleted, but they haven’t been because nobody ever asked the question “Why?”.
Tell your people what you are trying to achieve and then trust them to think about their own areas of responsibility.
#4 – Get your COA right
The General Ledger is the heart of the finance system and the Chart of Accounts (COA) is the heart of the general ledger. Companies jump through huge amounts of hoops just to cope with a poorly designed and organised COA.This often happens when companies acquire subsidiaries that have totally different COAs. There then appears a cottage industry of accountants all frantically trying to make the different postings match up.
Get your COAs right and you’ll find that you don’t need that cottage industry anymore. A well-organised COA also helps with reporting and you can often find that simple reports fall out of the system rather than having to resort to macros and reporting software.
However, it’s important not to launch suddenly into changing things as this could do more harm than good. Take some time to consider your approach and only make the change when you know what subsystems will be affected.
#5 – Stress your system
One of the most interesting aspects about finance department systems is that the departments very rarely use all of their capabilities. This stems from companies paying for the new systems that only then pay for consultants to work on getting a minimum viable product up and running.
This means that in many companies there are lots of other tasks that their systems could do but they just haven’t been switched on or implemented. Have a good look at your systems and see if there are other functions that could be used.
#6 – Use apps to take the strain
Apps are everywhere nowadays, you can find an app to do almost everything. If your main finance system can’t do something, take a look around for an app that can fill the void. Often it is better to use a best-in-class app rather than trying to force your finance system to do something that it wasn’t designed for.
#7 – Automate your reporting
One of the biggest drains on people’s time is generating reports. Very often we see people spending hours just producing, checking and formatting reports when they could be adding insight. Once you have a well-structured COA and you’ve deleted reporting that nobody uses, look at ways of automating report production.
This will free up your staff to add value and insight for managers to use.
Summary – It’s all about a process
When you first look at making your finance department more efficient it can seem a bit daunting. However – there’s a method. The above tips have been presented in a particular order as following this process makes the whole project easier. For example, if you delete processes because they are not needed then you don’t need an app to do them. Or if you organise your COA properly then your reporting should be a smooth process. However, valuable time can be wasted automating a process, if you realise later that the user doesn’t need it and therefore it needs deleting.
Divide your transformation process up into manageable bite-sized pieces and do a little at a time. That way, the whole project won’t seem as scary and you’ll feel better about the smaller tasks that need to be completed.
Combining these crucial steps with innovative and automated tools will help you to replace your traditionally manual processes – such as expense management and reporting – with speed and ease. If you’re already thinking about ways to make your finance department more efficient, make sure you understand the needs of your team and collaborate with the right technology partners. Then, watch your processes simplify themselves.