Financial Processes are Challenging
Here you’ll find what we have found to be typical financial process challenges, along with our top tips for making your processes smarter.
1. Inefficient Processes
Relying on outdated systems only makes the financial process more complicated. When teams are manually creating forecasting templates and entering data themselves, it takes a toll on the level of productivity that could be achieved with modern tools and software. When finance staff become experts in these tedious, manual processes, it perpetuates burnout and keeps talented individuals from utilizing their skills in more productive ways.
2. Inability to Manage Critical Data
The sheer volume of data required for financial processes can be overwhelming for any team to manage. Storing, organizing, and tracking critical data and documents can be especially challenging, even for businesses using well-known software like Excel. Given the importance of interdepartmental collaboration, being unable to manage and keep track of critical data and spreadsheets only adds further complexity to the financial process.
3. Low Visibility
A lack of visibility due to the simple co-authoring provided in Excel and similar end-user tools presents its own challenges. Rather than enabling true planning and forecasting, relying on spreadsheets as a system for guidance within an entire organization means you’re taking several steps back. Personal spreadsheets are never in sync from one team member to another, making corporate governance nearly impossible. A complex forecasting template developed using spreadsheets saved on a single team member’s computer isn’t stress-free collaboration, it’s a visibility nightmare.
Tips for Financial Processes Improvement
When finance processes utilize the next-level technology that’s available today, teams can go beyond co-authoring and finally reap the benefits of true collaboration. Finding, tracking, and analyzing data for reporting is easier than ever, enabling more accurate planning and forecasting.
Tip 1 – Perform a Process Audit
Before you can set out on improving your financial processes, you must examine the existing tools, software, and processes you already have in place. Start by identifying what processes could be more efficient, then decide which areas you’re going to tackle immediately. Of course, you’ll want to focus on those that will provide your organization with the greatest benefits, while rolling out any additional improvements or changes over time.
Tip 2 – Organize All Information
When you look at your templates and spreadsheets, would you consider them organized? Can you manage them better with meta tags, filters, and other data controls? If you’re not currently using these elements, consider building and defining datasets that can be managed with them. Do you have templates and guidelines for reports in place? Focus on developing standardized templates so they don’t vary from one team member to another.
Think about the integrity of your data. Can anyone go into a document or spreadsheet and edit it, or do you have permissions that limit who can make changes?
Tip 3 – Work from a Single Data Source
Where data exists within your organization is another area to consider. If team members are pulling data from different sources, errors and inconsistencies will occur. Utilizing a multidimensional database enables your organization to have access to a central nervous system for communicating, controlling, and delivering on your vision through informed decision-making. A multidimensional database links data to all of its related destinations, so if a figure or dataset changes in one place, the change carries over to every other location.
Tip 4 – Encourage Organization-Wide Collaboration
For real financial process improvement, organization-wide collaboration is essential. Developing a shared financial reporting process that empowers users to truly collaborate rather than simply co-authoring is one way to eliminate process bottlenecks and wasted time. If the tool or software also provides an audit trail, it will be easy to see who made changes, what changes were made, and when.
Tip 5 – Transform Excel for True Financial Process Improvement
True financial process improvement can’t take place unless outdated systems like Excel and other end-user tools are transformed with next-level technologies.
Best-in-class planning and forecasting tools will provide a range of analytics—including custom/user-created—and are adaptable to a variety of industries, facilitating different methods of planning and forecasting. Whatever your industry, the right planning and forecasting tool will drive collaboration, simplify continuous planning, provide data independence, lower risk and offer transformational connectivity, among other features.
To learn more about PARIS Technologies and its mission to help organizations build comprehensive guidance systems using tools like PowerExcel, book an exploratory call with our team.
Finance and accounting teams play an integral role in supporting organizations’ growth and strategic goals. But many finance and accounting professionals are tied to inefficient, burdensome processes, resulting in an underutilization of their strategic talents.
With so many different financial planning tools, forecasting tools and software available, driving efficiency, providing necessary insights, and facilitating strategic business growth have never been easier. Reducing inaccuracies and driving more efficient operations also frees up finance and accounting teams to do more meaningful (and exciting) work, the only concern is making sure you are using the right one for your organization.
Another important consideration is the risk associated with poor processes. CIMA, the Chartered Institute of Management Accountants, defines business or operational risk as any risk that relates “to activities carried out within an entity, arising from structure, systems, people, products, or processes.” It’s critical to identify potential risks and then implement measures to control them. The inability to do so can have disastrous consequences for any organization.
(This post was originally published on Sep 16, 2021 and had been refreshed for you reading pleasure.)