The finance function is so much more than simply measuring P&L and paying salaries. It has a vital role to play in the smooth running of a company.
From creating budgets that allow for significant growth to negotiating deals with suppliers over credit lines. Their performance is key to company success.
Despite this, there are several ways that finance departments could improve moving forward. Enhancing the performance and the finance function is something that many will need to look at in order to make the most of opportunities in the future.
One of the keys to a successfully navigating a finance department leadership is through the systems you use. Many are currently struggling with legacy systems and the new requirements that legislation and regulation demand.
This means that systems need to be updated or fully replaced in order to maintain performance now and improve it in the future.
Legacy systems are also unlikely to support the needs of the more complex systems that will be needed in the future.
Following the financial crisis of the late 2010s, many departments needed to change their approaches and functions. The finance function was chief amongst these and arguably found itself under the most pressure from these changes.
These requirements are constantly evolving and this means that finance teams need to be flexible and capable of keeping up with what’s needed of them.
This is about more than making changes when they are needed, but having changes being made to improve the state of the departments and its output is going to put the entire finance team in the correct frame of mind. This doesn’t mean changing for changes sake, but instead identifying how they can improve and then changing to achieve this. It is also important for these changes to make a difference, set goals and rewards for the team to work towards within these changes to keep motivation.
This way, when a major shift occurs from an external source, the flexibility inherent in the team will allow for smooth transition.
According to the Accenture Survey ‘The CFO as Architect of Business Value’, many of the key challenges was in complexity.
This is becoming common as new rules and regulations are constantly being introduced and this means that there can be several layers of rules and regulations for each individual piece of work. This creates significant issues for finance teams, slowing down processes and causing frustration.
Therefore, it is important to make the complex, simple.
This could be done through digital means, effective communications, dedicated teams or simply better education.
By making the complicated simple you will speed up work rates and improve moral amongst the team, creating situations where more can be achieved and your team are happier in doing it.
Adopt Big Data
The Accenture survey also found that only 4% of those asked had fully implemented Big Data systems, whilst 20% expected to do so within the next two years.
We have seen from case studies across multiple industries, that the insight that can be gained from Big Data and analytics can create a vast improvement in the fortunes of a finance department.
Being able to draw in information from several datasets can help not only with finding out information about what the company is currently doing, but through predictive analytics, give an idea of where it may be in the future.
CFOs Need Strategic Influence
One of the most important aspects that the Accenture survey found, was that the CFOs who had the best performing finance departments were also the ones who had the most strategic influence throughout the wider company.
‘finance leaders of high-performance businesses report a greater increase in influence over providing insightful analytics to the business, executing business transformation initiatives for the broader enterprise, and influencing the strategic planning process’.
This strategic input allows the CFO to be able to see the wider business implications of the decisions made in their departments. It also means that the finance function can be aligned to the wider business strategy. This will allow for decreased friction between departments and an increased ability to work towards a common goal.