Making the Finance Operation the Best it Can Be
One reason to love business is because it is dynamic. Strategies change or pivot, organizations transform, regulations and new rules emerge. All of these require financial teams to be both strategic and savvy about how to create better – if not best – practices to deepen the contribution to an organization’s sustained success even while it’s evolving in real time.
Since we work with many types of organizations across many industries, it provides us insight into what professionals consider challenges today. Moreover, it encourages me to consider how to support financial teams to become more impactful, effective and efficient. If you are oriented as a “continuous process improvement” thinker, here are some points to consider in evaluating how to make your operation even more valuable.
Consider or appraise how well the operation is doing today, relative to the direction of the business. Looking ahead, consider the strategic questions:
Are you prepared for conformance with new rules coming out?
Does the operation have enough resources?
Do you have the right staff?
Are the systems in place optimal?
Is your function a valued business partner?
New Rules Means New Tools and Techniques. Changes to revenue recognition and lessor accounting means considerably more record-keeping and disclosures. Storing and maintaining data and complying with legal documentation reports will be under a new scrutiny. Is your team informed and prepared?
Resources or Resourceful? Do you have what you need to bring value effectively? Often, the tendency is to say this means hiring more talent. Yet, it is not necessarily the best solution. Consider applying a lean method to accounting, control, measurement and processes. Develop a human capital financial outline and advanced metrics to monitor overall effectiveness. Are there benefits to consolidating, out-sourcing, off-shoring or implementing shared service centers for any operations? Can the front and back offices be better aligned? What techniques can you implement to streamline the otherwise time-intensive financial close?
Right Staff with the Right Stuff is Key. Executives are expecting finance professionals to be business partners in deeper ways. They don’t want to see finance folks in cubicles running accounting spreadsheets. Do you have members who are meeting with department leaders to discuss how to make the operations and company more successful? Are they looking at the business from the balcony and able to model what is needed to make it successful? Are prospective new hires vetted for international experience as well as relevant industry knowledge? Since companies can grow across national boundaries more readily than ever, it is valuable to source professionals with experience in overseas operations and who understand multiple currencies and regulations in Asia, Europe and other likely markets for the company. A CFO colleague of mine adds one important criteria to his searches: common sense! He feels good educations in any college or university do not – or do not know how to – teach people to have common sense. It’s deeply relevant to most business challenges and to sound business partnering, so screen for people who have it.
Systems and the Digital Transformation Means Opportunity. Technology can be our best friend, unless it overwhelms us. Many new systems are hitting the market which can help automate processes, help cut labor costs, speed monthly closings and become more profitable. Consider what software tools your customers and vendors use relative to what you do. Evaluate the benefits and risks of cloud computing. Is there a way to maximize deployment of payment cards? Should you expand e-payables, e-receivables and e-payments? Consider lockbox processing for more efficient bank deposit payments. Adopt a software package that allows credit check to be made during order entry from customers to avoid delays and decreasing bad debts. Evaluate which company is best at collaboration when your goal is to streamline your operations. Systems can be slick. Support and service are equally vital.
A Business Partner Brings Real Value. Do you use a balanced scorecard to align achievement of goals and objectives to the organization’s vision and strategy? Is your planning and budgeting process integrated into the strategic planning process in a meaningful, easy-to-understand way? Is your team looking at opportunities for improving company performance, e.g., how to align working capital to the supply chain, optimizing inventory investments, better leverage of treasury and working capital and best practices use of capital assets?
Ideas for continuous improvement may be well-received in some organizations. In others, change meets with busy people who resist it. If your organization is more the latter type, select one or two priority changes that can make the biggest difference. Implement them to build confidence among others that change is helpful.
Our firm is always available to offer an objective initial operational review and to offer recommendations on best practice improvements and talent sourcing for your operation.
In 1986, Mr. Weis became a pioneer in the contingent management movement as the founder of CFOs2GO. As “the original CFO”, he served as Chief Financial Officer for more than 100 companies developing the proven practices that make “as needed” support valuable.
Bob leads the International Practice Group helping companies set up and maintain foreign operations inside and outside of the U.S. as well as attract top talent for their US team. He also co-leads the M&A Practice Group.
If you would like to speak with Bob, please use the Comments section to make a request.