We have written this blog specifically for those businesses who have 1 or more people in their business who are responsible for administering and managing the finances in the business.
When was the last time you reviewed your Finance function? Over time, like any area of the business, this can need a refresh to look at whether things can be done differently, whether processes can be streamlined, if technology can be better used to provide more efficiency and sometimes whether you even have the right people.
Perhaps your current Finance function works very well indeed and you don’t want to disrupt something that you currently rely upon. However, are you in a position of managing a business where you have no choice but to review and reduce your staffing resource costs across all areas of your business and including the Finance function?
So in this blog, we want to highlight 5 areas for you to consider as you review the Finance function in your business.
1. TECHNOLOGY
2. THE RIGHT PEOPLE
3. FINANCIAL INFORMATION
4. DAY TO DAY OPERATIONAL NEEDS
5. PROCESSES
TECHNOLOGY
Are you using the best available technology for your accounts? Firstly, in terms of accounting software. There are many options out there which can be used which are user friendly, accessible by staff from any location and are designed to help you work time efficiently. Xero is our favoured product but there are many others out there which work in similar ways. Yes there is some investment in time and expertise needed to make the initial transition but there are huge benefits to using one of the latest softwares which will only continue to get better and better.
Have you looked at how your accounting software can link up with other systems in your business or others softwares you use to avoid duplication of time and to help make your business processes as efficient as possible? For example, if your sales invoices are raised in your CRM system, how can you get this information into your accounting software without you needing to re-enter this?
Latest accounting softwares will link with hundreds of other softwares – EPOS systems, CRMs, Payment providers, HR systems, stock systems, reporting systems etc. Here is a link to those which integrate with Xero to give you an example of the range of options out there which can massively save resource time in our businesses https://apps.xero.com/uk
PROCESSES
We all have those things that we do that we are used to or more comfortable with. Are these processes still relevant or needed in the business?
Are we duplicating our time and effort in certain areas?
Perhaps we don’t know the answer to this without spending some proper time mapping out existing processes in our business.
Just to take one area as an example – processing of purchase invoices – which can be a time intensive process and particularly if there is high volume.
When purchase invoices come into the business, where do they go? Who approves them? Who puts them on the accounting system? Who pays them? As a business can you be paperless to reduce time and money on printing every invoice? Can approvals be done within the accounting software rather than via printing and signature? Can an invoice/receipt scanning software be used to extract most of the data to reduce the time spent inputting into an accounts software?
So if you look across all elements of your financial processes, there may well be elements which can be done differently and using the available technology to help you.
THE RIGHT PEOPLE
Have you still got the right people in your business to be administering and managing your business finances?
Have you got too much resource now with the process or software changes you have made?
Have you got great attitudes, the right kind of experience and people who are adapting to and embracing new ways of working?
If this isn’t the case, where are your gaps – what is missing for you? It’s worth really analysing this and writing this down. This will help you to work through whether you can fill these gaps within your existing team (and it’s a case of you steering them in the right direction and providing training and development) or whether you need to look at restructuring your in-house staff or even outsourcing your Finance function completely.
FINANCIAL INFORMATION
As the person owning or managing the business, do you get all of the financial information you need and at the level and frequency you need which will help you manage the business finances?
If not then what is missing for you? What do you need to be done differently?
Can your team and your systems provide this for you and you just need to ask for this?
Perhaps it is a case of your accounting software being set up or used differently to provide you with more frequent information or more indepth information.
If not, then this again factors into your thinking about your future finance function and how you can make this work better for you.
DAY TO DAY OPERATIONAL NEEDS
This is where you can really work through what your detailed needs are. I would write down all the finance functions carried out and then review the frequency at which these need to be done. e.g, issuing sales invoices, entering purchase invoices, making supplier payments, bank reconciliations, VAT returns, reporting etc.
When doing this exercise, it helps to write down what you actually need and not what you think you should have or what someone is already doing at the moment.
Like any area of the business, additional systems and processes get created for a particular reason but can still continue when the original reason no longer applies. Do you have any of those?
How often do these key functions need to be carried out? For example, you may want your bookkeeping elements done daily, weekly or monthly. Payments to suppliers could just be done once a month rather than weekly.
Do these operational needs have to be fulfilled by someone in the workplace or can they be done from your employee’s home or by an outsource team working from their own office?
SO WHERE DO YOU GO FROM HERE?
Well we hope that we have helped you with your thought processes and to identify ways in which you can adapt your Finance function to be more resource efficient and to work better for your business.
At The Bookkeeping Department we provide a full range of Finance Department functions and so if you would like to explore options for working with an outsourced provider (for some or all of your financial tasks), then please don’t hesitate to get in touch. www.thebookkeepingdepartment.co.uk Tel: 01462 455455 lynne@thebookkeepingdepartment.co.uk