The financial processes, policies, and procedures you have in place underpin your entire business and keep things running smoothly. If they’re outdated, ineffective, or inefficient, they could be costing you time and money.
If you suspect there’s room to improve the finance processes in your business, you might want to keep reading. In today’s ultra-competitive business climate, can you really afford to be operating with clunky and outdated systems and technology?
What are financial processes?
Your financial management processes touch almost every part of your business. These include:
- Paying staff
- Paying suppliers
- Invoicing and collecting payment
- Recording transactions
Ideally, your financial processes will be efficient and predictable. They should also be clear, concise, and easy to follow.
For example, let’s say you want to pay your staff every second Wednesday. How does this happen? What processes do you have in place, so all your staff are paid the right amount on the right day? If it’s all automated, who do your staff contact if there’s an issue with their pay?
(Hint: Unless you want it to be you, have a process and procedure in place that everyone knows about.)
What do good financial processes look like?
In a perfect world, your processes will be designed to delight the process customer. For finance processes, these are your staff, suppliers, customers, and management. So good financial processes deliver a great experience (while still meeting their business needs) and they do so in the most efficient and cost-effective way. For most businesses, with modern systems and good finance management, it’s now possible to do both.
To achieve this, your processes should:
Begin with a mindset of continuous improvement
As your business moves and grows, proactive finance management will mean continuous improvement of your financial processes. Changing needs, priorities, and opportunities will mean different processes become the improvement focus at different times, and there’s no clear linear process.
However, to ensure your finance function is optimised and delivering a competitive advantage to your business, here are some steps to help you identify opportunities and then improve your financial processes.
- Map all the processes in the best and most efficient way for your business.
- This doesn’t have to be time-consuming or include a massive Word document no one will read. The key is to keep it practical and useful.
- Remember, you’re trying to improve processes, not create more work for everyone. Some elements may be better suited to verbal or visual records.
- Try using software like Evernote, Otter, or Zoom recordings to document processes.
- Share with your team and encourage feedback.
- Use project management tools to track work being completed and encourage people to follow processes.
- New project management tools can take time to set up and learn. Be patient and factor in training costs and time.
- Once they’re up and running and staff are across them, they can save you and your business time and money. Instructions are embedded. Tasks are listed and can be set to recur. People know what they’re doing and, best of all, progress can be centrally reviewed.
- Track recurring and non-recurring tasks separately.
- Clarify your business needs. What existing processes, systems, and infrastructure do you have in place? Are they still working? Are they still the most efficient way to do things?
- Consider the experience of the process customers and identify any pain points.
- What does success look like in your ideal business world?
- Work closely with your staff and finance experts (whether it’s in-house or outsourced).
- Prioritise the review process and fix the most urgent tasks first.
- Find safe and efficient ways to test process changes before committing to them.
- Identify the risks associated with doing things differently and plan changes accordingly.
- Develop an implementation plan that includes when and how processes will be changed, and the impacts of this. Share the plan to encourage input and feedback.
- Communicate process changes clearly and provide training where needed.
Improvements to get your processes working better:
- Remove waste by getting rid of unnecessary or duplicated steps.
- Regularly review options to replace steps with software or apps.
- Evaluate when things happen (not just how) to reduce wait times and find ways to streamline work.
- Identify process fixes or undertake training for anything causing errors or rework.
- Do a risk analysis and ensure you have processes to mitigate these.
- Look for opportunities to standardise processes where things are done differently.
All good things take time
Maintaining good financial processes is a continual journey. Technology changes and what worked five years ago could be obsolete today. Be open to new and exciting processes.
And don’t be afraid to ask for help.
You can outsource to external advisors and experts whose job it is to know exactly what processes will help your business grow, like the team at Slate Accounts. We understand the power of streamlining your financial processes today so you, your business, your staff, and your customers, are ready for tomorrow.