There’s a lot riding on your financial team. Your business's entire financial future lies on these professionals' shoulders, and they can use all the help they can get.
Money is constantly moving on both a macro and micro scale — macro being the world economy and micro being your business.
You should always have your finger on the pulse of your company’s finances the way stock trackers are always up to date on movements within the market.
Understanding the ups and downs of the financial world can help alleviate many of the burdens facing your finance team.
Inefficient processes can bog down your entire company’s financial health, allowing it to fall victim to delays brought on by slow progress and inaccuracies.
But how can you improve your financial process management? What steps can you take to ensure that your finance team is working in the most efficient manner possible?
We’ve got you! This article will highlight six important steps you can take away to get your financial management on track.
Why do you need financial process management?
Without efficient financial process management, your business finances risk being inaccurate and inefficient.
If your accounting team is bogged down in mindless busy work that an automation platform could easily handle, they’ll make mistakes and ultimately grow bored with their work.
By improving these processes, you can keep your financial team focused on more intricate and essential matters that require human attention.
Many issues can come from poor financial process management.
For starters, inefficiency could lead to pointless complexity. Outdated systems with little to no automation and lackluster reporting can cloud your view of the company’s financial health.
Additionally, engaging in mundane data entry tasks can be pretty tedious for financial professionals.
There’s also the issue of unclear roles in a company with poor financial management. When no one knows their responsibilities or who they report to, tasks could be repeated or ignored completely.
Then, of course, there’s the issue of unintentional fraud, which could result from invoice mistakes or lackluster approval processes. An environment without oversight and visibility is a breeding ground for a costly fraud charge.
Now that you understand the various issues that could follow poor financial process management, it’s time to discuss several steps you can take to improve these processes and get a handle on your financial future.
Steps to improve your financial process management
1. Evaluate where you are
In order to grow beyond where you are from a financial process management perspective, you first have to understand your starting point. This will help you develop a clear business plan to eliminate inefficiencies.
Having a clear business plan is fundamental to improving your financial process management.
Take MOS as an example. It’s a fintech company turned into a bank. It has focused its products on young adults, providing services like bank accounts for teenagers and college students. A strong business plan let MOS get a good idea of who it was communicating with and what language to use.
But before MOS could expand its operations in this regard, it had to determine where it stood as a fintech, both from a positive and negative point of view. That same fundamental truth applies to your financial process management journey.
Start by taking a look at where your money is going and who’s in charge of handling it. Are there any deficiencies in reporting? How are the roles within your financial team established?
Take a look at your various expenses and who oversees them. This includes HR costs like signing bonuses for new employees and corporate relocation costs for new hires.
Throughout this audit, determine where you’re succeeding, failing and where you could stand to see a little improvement. Prioritize the areas that will deliver significant gains and create a plan to roll out all other improvements after that.
2. Consult & train your team
Discuss your proposed process changes with the financial team. They’re the ones in the trenches, dealing with your existing processes, and they’ll likely have ideas about how you can improve.
By gaining support from your financial team, you can implement all proposed changes knowing that you have the backing of your front-line workers.
You’ll likely have to offer your team additional training once these changes start to roll out. This could include training them on new software platforms that lean into automation.
Your team should understand how your enhanced finance workflow lays out and how it can be most effective.
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Make sure to train everyone before the rollout, and you can rest easy knowing that things won’t fall apart due to a lack of knowledge.
3. Invest in automation software
When you automate some of your financial processes, you take away many dangers that can lead to these challenges. With automation platforms, you can take tasks that were once very labor intensive for your financial team (like data entry) and make them fast and foolproof.
Using AP automation software can improve financial processes by automating and eliminating manual mistakes in your accounts payable processes. This lowers your risk of unintentional fraud and removes a tedious and loathsome time-consuming job from your employees' plates.
By taking these mindless tasks away from human workers, you’re freeing up their time and attention to focus on pressing tasks that require more skill and finesse.
The benefits of automation extend far beyond the finance team. Automation is key to improving efficiency and productivity in all company departments.
If sales teams benefit from predictive lead scoring tools, financial departments can also benefit from implementing software to monitor, bill and manage all kinds of expenses.
Just make sure that the software platforms you choose can integrate with your existing tools. Ensure that all of your tools can communicate to avoid siloed data. That’s how we end up with inaccuracies.
You can use automation software to improve:
- Accounts receivable.
- Accounts payable.
- Travel requests.
- Tax compliance.
- Purchase Orders.
- Expense management.
- And more.
4. Set deadlines
The financial services team needs to understand exactly what you want and when you want it. That’s why you need to establish firm deadlines that move your processes along.
There needs to also be consequences for missing those deadlines.
For example, if an employee knows that submitting an invoice late will delay payment, they’re more likely to ensure that everyone promptly turns their work in.
Send automated messages via email or the company chat system to remind employees when financial deadlines are approaching. Have them mark these deadlines in their calendars and set notifications so they won’t forget.
Additionally, hard copy or Word document invoices aren’t the most efficient. You might risk delays because something was lost or left off entirely. That’s why you should look into pre-made dynamic forms that won’t allow submission without completing certain fields — or try online invoicing software that helps your business craft unique invoices, send payment reminders and keep track of expenses.”.
5. Break down silos
Departmental silos can impact an entire company. A departmental silo is when each department acts independently of one another, with no communication or collaboration.
Due to the nature of their work, financial teams can easily isolate themselves from the rest of the company. But they still need data from the other departments in order to operate.
That’s why you must promote inter-departmental communication and collaboration as a regular part of your financial process management.
By doing this, you’ll be able to properly connect your various departments with the finance team, making everyone’s job easier.
6. Track your progress
Once you’ve rolled out your improvements, carefully monitor your company's progress in the weeks and months ahead. Even the best-laid plans can sometimes fall apart in practice, and you need to be able to see when that’s happening.
Process improvements are not a “set it and forget it” task.
You need to make sure that you fix the problems you identify. If not, or if new issues rise in their place, you need to be flexible and determine where the problem lies.
It could be that the automation platform you implemented has too many bugs in it. Perhaps your employees weren’t properly trained in its use. Whatever the reason, you must be flexible enough to change course and plug any leaks in the process at a moment’s notice.
Financial process management is a vital piece of the business puzzle, and by implementing the six steps we’ve highlighted above, you can improve those processes and get your business finances under control.
To review, when improving your financial process management:
- Evaluate where you are starting from with an audit of existing processes.
- Involve your employees in the planning process and train them on all new platforms.
- Invest in automation software that can take mundane tasks off the plates of your human employees.
- Set firm deadlines with consequences to ensure that processes are followed in a timely manner.
- Break down departmental silos and create a more connected company.
- Track your progress and make changes when needed.
Remember our last step especially. Monitor your progress and know when it’s time to make a change. By doing so, your business will be able to evolve and grow with the times, keeping strong financial process management at the core of your organization.