Beyond Transactions: How to Get More Value Out of Your 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 underutilized 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.”

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

Automating transactions

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 CPA and advisory firm 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 organization.

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 [more] value.”

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

According to Dhawan, three core finance processes are easy targets for automation:

  • procure to pay
  • order to cash
  • record to report

Driving automation at an appropriate level in transactional processing and then being diligent about investing those savings elsewhere in finance is critical, he said.

Feedback – and investing savings

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?”

“The youngest member of your team, while inexperienced, has a lot to offer, because . . . 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”

Once this is quantified, the next step is to shift resources. But that’s where organizations 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 organization taking the next step, it is about the organization 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,” said Dhawan. “But that typically does not happen.”

Saunders would have senior management, not just financial senior management, actually listen to people and recognize that people have value to add. Even “the youngest member of your team, while inexperienced, has a lot to offer, because . . . 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.”

Job rotation

Today, information is all tied together functionally. 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,” said CPA advisor Azran.

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, organizations 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.

Organizations 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.

About the Author

Usha Sankar is a freelance writer for CGMA Magazine, a publication of the Association of International Certified Professional Accountants, which offers the Chartered Global Management Accountant (CGMA) professional designation. The association is a joint venture of AICPA in the US and CIMA in the UK. Click here to subscribe to the weekly newsletter CGMA Magazine Update.

©Copyright 2016 CGMA Magazine. All rights reserved.

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern