How to get more value out of your finance team

 Finance team

The tedious and time-consuming nature of traditional accounting tasks often means that people with the ability to provide powerful insights into strategic decision-making have no place at the table.

Indeed, one-third of UK business decision-makers at medium and large enterprises believe their financial teams are an underutilised resource, according to a recent survey by accounting software company Blackline.

However, there are ways in which businesses can unlock the potential of their finance teams and ensure they contribute to high-value areas.

Finance professionals “are overworked in some areas they maybe don’t need to be working in, and not involved in other areas where maybe they could be,” said Elisabeth Saunders, ACMA, CGMA, a finance manager who oversees a team of three at Sussex Oakleaf, a health not-for-profit.

People who drive a business need the support of things like accurate invoice processing, Saunders said. “In small teams, you end up focusing on the transactional side without being able to find the time and space to go out and do the business development.”

However, Saunders points out that even the transactional finance people can add bigger-picture value. “They need to understand the implications when they are doing something of why they are doing it and what the implications are of them being behind with their work.”

Where can they add more value?

People in finance, by the very nature of what they do, can see what is going on in all aspects of the business. “The finance team is the scorekeeper but also an allocator of resources in a business. They can actually drive value,” said Joshua Azran, CPA/ABV/CFF, CGMA, founder of Azran Financial APC.

In particular, finance team members can help upper management identify the right data – and derive trends from them – from an increasing supply of information running through an organisation.

A relatively immature finance team might expend 50% of its effort on transactional processes, whereas a more mature department may expend only 20% in that area due to heavy automation, continuous finance, and other investments, said Kabir Dhawan, ACMA, CGMA, an associate director within business consulting at Grant Thornton in London.

“Most finance departments want to get to the point where most of the operational and transactional work is as low-effort as it can be,” he said. “That way you can free some resources and reallocate them” to activities that create value.

The first step is understanding where the effort is going and what the value coming out of it looks like.

Three core finance processes are easy targets for automation: procure to pay, order to cash, and record to report, Dhawan said. Driving automation at an appropriate level in transactional processing and then being diligent about investing those savings elsewhere in finance is critical, he said.

How can businesses use finance to deliver strategic insights?

Finance teams should employ a three-step process ­– assessment, implementation, and automation – and feedback, Dhawan said. “Feedback is actually the most critical,” he said. “Once you implement automation, does the finance team actually go back and measure how long things are taking, how effective they are, how much savings are generated?”

Once this is quantified, the next step is to shift resources. But that’s where organisations typically fail. They lose, say, two heads, and since cost to finance has reduced overall, they move on to the next challenge. “When it comes to an organisation taking the next step, it is about the organisation then having the maturity to say that when we remove two heads here, we are going to invest in bringing in one to two people in a value-creation role,” he said. “But that typically does not happen.”

Saunders would have senior management, not just financial senior management, actually listen to people and recognise that people have value to add. Even “the youngest member of your team, whilst inexperienced, has a lot to offer, because they don’t know, there is no ‘business as usual’ for them. Just because we’ve always done it that way doesn’t mean it’s the right thing to carry on doing.”

How does the changing business scene offer more scope for finance talents?

Today, functionally, information is all tied together. A marketing person is now a finance person, but a finance person has always been everything. “That is a trend that people are finally waking up to,” Azran said.

There is more scope for today’s accountants to take on more commercially aware activity, and that is a consequence of changing business environments. “Pretty much every sector has a need for accountants to do more than just the accounting,” Dhawan said. Taking the example of the social housing sector in the UK, he said, “that is a sector that has tremendous regulatory change, and just being an accountant who processes numbers simply does not cut it anymore.”

Because environments are changing, organisations are looking for finance and, specifically, commercial skills. This is most evident in terms of the need for business partners as they understand how the business works operationally.

What opportunities can businesses provide to bring the finance team’s ideas forward?

Organisations can consider structured rotation of junior employees into varied roles, not just the standard entry-level ones. “There is a lot of research that indicates that diversity, whether it is gender, background, ethnicity, or even experience in terms of work experience, drives better outcomes,” Dhawan said.

Saunders believes finance teams need to be empowered to contribute and “have a forum to come out and come up with those ideas and challenge assumptions without feeling that somebody else has thought about it already.”

She also recommends one-to-one meetings. “They give people time to talk without embarrassment,” she said.