Many financing departments would like to contribute to more value-creating work than they have time for due to their hectic schedules. So, how can you free up time and resources? Here are a few tips!
It’s no secret that most accounting departments struggle to get everything done on time, as seen in Azets’ various market surveys. Finance must have total control over budgets, accounting and reporting, ensure good control procedures and contribute with analyses and forecasts to the rest of the business. They must also be cost-effective and deliver with good quality on time. Parallel to this, finance departments often experience difficulties attracting and retaining personnel due to the so-called “great resignation,” a term used to describe the record number of people choosing to resign since the start of the coronavirus pandemic. However, there are several ways to free up both time and resources in the finance department.
Tight deadlines and a lack of resources combined with poor planning can result in the finance department failing to deliver budgets and financial analyses on time. What’s more, missing deadlines, such as those set by the tax agency, can lead to bad consequences for the company. Other possible major and undesirable consequences include flawed risk management, which can result in serious liquidity problems, poor bases for decisions or poor financing of operations where urgent capital needs are met with expensive short-term loans.
In other words, planning is everything and also provides the finance department with greater peace of mind. Having good planning tools in place can make all the difference to the company’s efficiency and well-being. This could be in the form of a task management system, shared departmental calendars and structured work in Excel. An overarching process wheel is recommended, with recurring planning on annual, quarterly and monthly bases to monitor all important deadlines.
We have noticed that finance departments are seeing increasing demands in one area in particular, which is to have reports and analysis of figures done quickly after the end of each month. This is an area where budgets and budget work are invaluable. In light of this, many companies are investing in external advice and support in the preparation of budgets, analyses and forecasts. External consultants have experience from several different sectors and are familiar with the processes and models that work best, freeing up time for the finance department.
The work of a finance department can most often be broken down into three primary processes: accounts payable, accounts receivable and accounting. The Chief Financial Officer (CFO) and the finance department have a lot to gain by taking a closer look at these processes and making them as efficient as possible.
Do several people work with the same tasks? Are there several ways to conduct the department’s tasks? These are examples of questions that can provide a starting point for efforts to gain better control of the workflow. Following this, it is time to standardise the processes.
Standardising processes entails the finance department reviewing how they can perform various tasks and choosing the best method based on selected criteria, such as which is fastest and/or delivers the best quality (smallest risk of mistakes). This involves preparing process descriptions, procedures and templates, including the following up of deviations from standards. It is important that everyone who works with a process then does so in accordance with the established standard.
Azets’ surveys have shown that a lack of time governs the priorities set by CFOs. The automation of accounting flows tops the list. CFOs believe that automation makes the work more efficient, as all or parts of an already standardised process are performed automatically. This could be supplier invoice processes, recurring accounting posts, account matching and integration with pre-systems. This frees up both time and resources that can be used to support operations.
Hire an outsourcing partner
One fast and effective way to free up both time and resources is to partner with an outsourcing supplier. The supplier takes care of the day-to-day work and offers support during strategic and proactive work. This offers a favourable environment for the finance department as personnel can focus their efforts on value-creating work instead.
What’s more, the supplier performs the work more efficiently than the finance department. Since the same solutions and services are provided to many clients, an outsourcing supplier can make larger investments in, for example, IT and processes, as well as maintain a larger organisation with specialists in various fields and offshore organisations. These lessons and experiences enable the supplier to develop a best practice and learn how to run finance operations as efficiently as possible.
We live in a changing world, and this has a major impact on all finance departments. When an organisation is scaled up or down, such as in conjunction with an acquisition or disposal, the finance department needs to focus a great deal of its energy on adaptation. This makes having a scalable solution and a responsive outsourcing partner an advantage.
Do you need to optimise your finance department? If so, you are most welcome to contact us here at Azets!