Roadmap for the transformation of the financial department

Foaie de parcurs pentru transformarea ”financiarului”

Roadmap for the transformation of the financial department

In a company, when it comes to invoices, salaries or other matters related to money, you most often hear the phrase “talk to the people in the financial department”. This “talk” means that there is a relationship with a person who accesses a computer system based on an access protocol.

But the “financial”, made up of people, technology and processes, must keep up with the transformations of the company’s operating environment. Therefore, a number of measures should be taken into account, which may include the following:

Correct definition of targets and objectives

Setting the right goals is essential to knowing where you want to go. Some companies may choose to develop financial reporting and financial management. Others might focus on automating and aggregating data from disparate sources to speed up forecasting and planning processes. Defining goals and objectives means representing your success through a list of deliverables and workflow improvements.

Assessment and identification of gaps

Management teams must have an unbiased approach to be able to objectively analyze the current state of the finance function and identify what is missing, what is not working optimally, what needs to be eliminated, etc. Identifying opportunities while uncovering the greatest areas for improvement must bring clarity to the management team to map out the path forward that will result in the greatest benefit to the company.

Developing an efficient working framework

If achieving the new targets requires additional resources or expanded responsibilities for those within the finance department, they must have a well-defined structure within which to work. Structure is key to maximizing the potential of the finance function. Each employee on the finance team must have specific roles and responsibilities that allow the next person in the workflow to meet their deliverables.

You will need to ensure proper synchronization between the accounting and financial planning and analysis teams. Accounting measures performance accurately while planning provides the most direct value to management as it provides insight and analysis into future initiatives needed for the company to grow.

Creating scalable financial processes

The coherent approach to finance department transformation is what makes the difference between a good finance function and an exceptionally good one. Scalable financial processes are the solution to produce the necessary deliverables through workflows that can stand the test of growth at a rapid pace.

The most common example is the annual budget processes. Collecting information from each department head, aggregating it in the company’s collective budget brings many blockages. From the collection method, to adhering to spreadsheet templates, to different delivery times and more, all of these processes need to be scalable to keep pace with the company’s growth.

Adoption of relevant technologies

Dusty technology and outdated tools do not support a collaborative work environment. They lack the necessary version control standards and their use is prone to manual errors. Financial planning and analysis tools and technology must be robust enough to scale data analysis, but not so complex that only 1-2 experts on the team can use it.

To achieve a successful financial transformation, the adoption and implementation of modern software solutions, paired with financial, accounting, planning and analysis best practices, is the easiest way forward.

Analysis and communication of objectives

The objectives of the finance function must reflect the objectives of the company. By working with an integrated and clear set of financial and operational metrics, executive-level conversations become productive. This is the result of a “financial engine” of the company that works very well.

Because the role of the finance function is to inform and guide decision-making discussions, not only technical but also interpersonal skills must be part of every CFO’s repertoire. The more clearly his analysis and recommendations are understood, the more effective impact they will have.