Best practices to improve a finance department

What makes a good finance department?

The role of a finance department within a company has rapidly developed from once being seen only as managing cash flow, payroll and reporting past financial figures. Now, finance teams are relied upon for their expertise on budget allocation, performance and future forecasting to help prepare the company for both expected and traditionally unexpected scenarios ahead. Something which was only emphasised during the pandemic when unpredictability became the norm.

Reaching the goal of creating effective financial management involves investigating the existing tools and processes being used, attitudes and behaviours of the team and what expertise is being brought to the table.

Every member of a good finance team should be able to think on their toes, be strategic and have top communication skills - but they need the right supporting tools in their accounting software to give them the head space and the time to be strategic.

By being in charge of everything from transactions to invoicing to overall business performance, the modern finance department now needs to be able to unravel and understand the financial and business data at their fingertips.

Automated reporting tools to support this are crucial to enabling finance teams to tap into the insights the data provides.

A good finance team today has to be agile, and having the right accounting software plays a huge role in this. Outdated accounting software could be the difference between a finance team performing best practice or not.

 

3 top financial management practices every finance team should follow

The list of best practices to improve finance departments is almost endless. Each finance team is unique and their business’ needs and goals are different too. But here are three top financial management practices that any finance team can follow;

1. Visibility and clarity

Finance teams should have full visibility of financials across the entire business, ensuring that all data gathered, reports created and budgets are concise and up-to-date. If a report is compiled using manual systems, it can become out-of-date quickly with figures constantly changing. This could eventually lead to senior teams presenting old information and potentially guiding the business in a misinformed direction.

If automated accounting software is used, there can be a reduction in administrative tasks such as manually updating the data. Information including company and employee expenses, payments and general spending can automatically update and predict future budgets and forecast how the company may perform in the coming months and even years.

Senior teams will then have the comfort of knowing the information they are viewing is current and they can make informed decisions based on this. Meaning the information shared from the finance team provides clarity to decision makers.

Download our guide to learn more about automated accounting software and how it can support you.

2. Planning is key

The past 18 months have shown everyone that having a contingency plan is key within a business. Knowing where budgets and spending is being used is something that a finance team should be able to access at the click of a button which is where real time reporting is certainly helpful.

We have seen that not only does there need to be forecasting for the coming years, but also short term, in the coming weeks and months. The pandemic has encouraged financial professionals to be ready to predict the unpredictable. Breaking down reporting from yearly to monthly, to even daily, means finance teams can help a company plan in much more detail.

3. Utilise automated systems

By fully utilising automated accounting technology, teams will have the opportunity to contribute more widely to the overall success of the business rather than focussing on repetitive and mundane tasks. This, in turn, will lead to a smooth and well-oiled department who can focus on tasks including forward forecasting and budget allocation.

Finance professionals shouldn’t be afraid of relying on software to carry out tasks. Although it may seem there is already a trusted process within their company, embracing the change will allow everyone to focus on utilising their expertise and experience where it is needed most.

Our accounting software provides a full suite of financial management modules and advanced functionality to support accounting teams and drive efficiency. Download a brochure to explore the features, or book a demo to view our accounting software in action.

 

How to ensure a finance team is following best practice

As the world has had to quickly adapt to life online, how employees are working and feeling have had to be made a priority within a business. With this in mind, sometimes new processes have to be added or modified.

Our recent blog on Robotic Process Automation (RPA), showed that it is a common fear that RPA will eventually take over the job of a finance team. Research from GovGrant showed that out of 155 finance professionals, 40.5% said they feared being replaced by technology and 30% said they were concerned about keeping up with modern technology.

Adopting this technology is not about replacing it’s about assisting, ensuring finance professionals in particular can be agile and have the tools at their disposal to grow in the future. Further to this, new technologies will play a fundamental role in attracting upcoming accounting talent. to play a key role, like it does in day-to-day life.

Speaking with other finance professionals, and reading guidance on how to ensure a team is being provided with enough support, is something that finance teams should consider.

 

Why switching your accounting software could empower a finance team

With digital automated systems being introduced at the top, finance departments can streamline their processes and work more efficiently. Our recent blog on what finance teams could do with time given back found that although finance professionals felt that time is the biggest restraint that stops them from focussing on value-added tasks, it is actually how the finance team uses its time that is the biggest barrier to efficiency.

Research found that most finance professionals spend almost one day a week on general admin tasks. The same research found that 65% of respondents think there is a disconnect between what they spend their time doing and what they should actually be focusing on.

A range of accounting software can help teams focus on important tasks rather than those that are administrative. Finance departments can make light work of VAT and intercompany transactions, making it easier to manage different currencies that the company may work with. Tasks such as reviewing previous years’ performance which can take up valuable time can be viewed easily alongside estimating what the future could look like.

A task that financial professionals feel could be made easier is reporting - which we have mentioned is key to good practice. A lot of time is spent on manually inputting data and creating reports when it can all be calculated and viewed online on one platform.

According to our survey of 1,000 finance professionals in 2021, 16% said that document processing was the least efficient area of their department, followed by 7% stating that month/year end tasks were least efficient. By reducing the time taken carrying out this task, teams will save time and avoid mistakes, increasing the accuracy of audits.

 

Over 2,400 leading UK organisations use our financial management software to drive business continuity. Why not join them? Get in touch.