When talking about rationalizing processes and streamlining business operations, it’s easy to overlook the finance and accounting department. Nevertheless, knowing how to improve efficiency in your finance department is crucial to your organization.
Here are four steps that you can take to increase your finance and accounting team’s efficiency.
Employ lean principles
Organizations have different goals and requirements, and thus, there is no single way on how to manage an accounting department effectively. Nevertheless, McKinsey & Company suggests that the adoption of key principles from lean management increases the efficiency and quality of your finance and accounting team, as well as promotes an organizational mindset of continuous improvement.
In 2006, McKinsey partners wrote three ideas that can help eliminate waste and improve efficiency in your finance team:
focusing on what external customers value (that is, relying on external customers to define which functions add value and which produce waste);
exploiting chain reactions (that is, addressing one problem to reveal other opportunities); and
- addressing the root causes of problems.
Conduct regular employee training sessions and process reviews
To achieve efficient accounting processes, communicating with your people is an absolute must.
Ask members of your staff (that is, the process owners in your team) to walk you through the processes that they have to perform every day to find opportunities for improvement. By reviewing your day-to-day operations, you are most likely to find procedures and steps that are inefficient, redundant, or unnecessary.
Together with the process owner and other involved participants, you should review your operational processes thoroughly and find ways to optimize these. In case you uncover any gaps in skills and knowledge, this would be a perfect opportunity to conduct training sessions for your staff.
Consider outsourcing some tasks and functions in your team
Contrary to what some politically conservative parties have been saying, outsourcing, particularly finance and accounting outsourcing, is one of the best practices your accounting department can exercise as it can be beneficial to your business when done right. By taking the basic and administrative tasks offshore and keeping the more crucial tasks in-house, you can better utilize your finance and accounting team.
Aside from making significant cost savings on overhead and resources, outsourcing your accounting functions can actually free up your in-house team and enable them to provide value-adding services for your clients.
Invest in Robotic Process Automation (RPA)
Like any other modern organization, your firm produces a large amount of data every year that you can use to make better financial decisions. Leverage the use of business intelligence (BI) tools and automated accounting systems to optimize all the functions of your finance team and increase accuracy and profitability.
Once your organization has adopted the use of BI tools and analytics, the next logical step to take is to invest in RPA.
Knowing how to improve efficiency in the finance department can be your stepping stone in building a more proactive team that can keep up with whatever disruption goes in the way.
Find out the wonders high-end F&A services can do for you as a CFO. You can download our Premium CFO Solutions whitepaper to learn how we can support your finance and accounting endeavors every step of the way. You can also schedule a free consultation today with our team at D&V Philippines, and let us find solutions that are perfect for your business.
This post was first published 20 June 2017 and edited 13 August 2021.