How to Fast-Track Your Finance Process Improvements in 2021
Table of Content
- What is Finance Process Improvement?
- Typical Problems in the Finance Function
- How to Improve Your Processes:
Getting and staying ahead of the competition in today’s business environment means making smart decisions to improve your organization’s use of resources (both time and money). A big part of the continuous improvement is making refinements to the fundamental finance business processes that your teams carry out on a day-to-day basis.
Making process improvements in the finance function is a great place to start, due to the number and complexity of routine activities that the team regularly completes. Finance process improvement can serve a host of benefits across your organization.
This article will lead you through some key finance process improvement examples to help you on your way to a smarter, more streamlined way of working.
What is Finance Process Improvement?
Finance process improvement is the changes in efficiency that you make to standard tasks carried out by financial workflows. Implementing process improvements in the finance function often involves using technology to add automation, improving accuracy and consistency, and helping your business achieve its organizational goals. Finance process improvement can serve a host of benefits across your organization.
Typical Problems in the Finance Function (You Should Avoid)
The activities above are all critical to ensuring smooth running and overall success of your financial process management. However, if you rely on manual, labor-intensive processes to complete these tasks, you run the risk of creating unnecessary problems.
For example, without automated processes to fall back on, it’s possible that your team misses deadlines, overlooks key tasks, and battles an error rate that is way too higher than it should be. It’s natural that this affects the morale of your team, causing them to feel as though they are wasting their time, undertaking useless or monotonous tasks, and being criticized for poor performance. It’s unlikely that the productivity of the finance function in a situation such as this is positive. That’s why finance process improvement can add real value to your business.
Here’s How to Improve Your Processes:
Now that you’ve figured out some of the obstacles that are hindering your finance team’s ability to do the job quickly, efficiently, and accurately, let’s take a look at some finance process improvement examples that you could consider implementing in your organization and the benefits they can offer you:
1. Reduce your error rate
By putting in place simple interventions such as automated forms, tailor-made workflows, and revised data permissions, you reduce the likelihood of human error contributing to poor accuracy. Implementing software is a quick way to make some key process improvements in your finance function.
2. Increase the processing speed
This finance process improvement will come about through identifying and eliminating unnecessary or duplicated tasks, automating simple activities, and performing some activities simultaneously.
3. Reduce your costs
Naturally, you are looking for a finance process improvement that positively influences your bottom line. You can reduce your costs by implementing automated finance processes that require less employee intervention. These processes can also reduce the headcount of your finance team or allow such employees to focus on more value-adding activities to contribute positively towards your business goals.
Common Finance Processes (That Need to Be Improved)
There are great opportunities to realize process improvements in the finance function. By its very nature, the department is home to routine and repetitive list of finance processes. Here are some examples of common activities that could benefit from finance process improvement:
- Accounts payable and receivable, including invoice and payment processing and billing activities
- Expense management, including employee expense reimbursement, cost allocation, and reporting
- Budgeting and forecasting, including forward financial planning and P&L activity
- Auditing and cash flow, including regulatory reporting, policy compliance, and cash flow management
- Payroll processes, including salary payments, compensation and benefits administration, and income tax distribution
Helpful Tips on Finance Process Improvement
If you’re tempted by the time and resource savings demonstrated by these process improvements in the finance function, it’s time to get started and make them happen in your business. Here are some of the most common steps that organizations take:
Audit your finance function
This is the first step that you should take in order to realize the strengths and weaknesses of the department and find opportunities to make process improvements in the finance process mapping function. Don’t try to tackle everything at once–stick to the issues that, when rectified, can offer your business the most significant gains.
Get your team behind you
Don’t miss this crucial stage–you need to build support for change across different areas of your business, including from senior management and from the employees that work in the finance team themselves.
There are plenty of opportunities to put finance process improvement examples in place in your business by utilizing software and automation to gain efficiencies. Once you start implementing process improvements in the finance function, you’ll quickly see the positive effects they can have across your whole business.