How to Increase the Efficiency of Your Finance Department

The finance department has an essential role to play in the overall performance of any organization, so finding ways to increase its efficiency can make a big contribution to business success.

Given the critical role the finance department has to play in the healthy performance of any organization, it goes without saying that any improvement in the efficiency of the team will have positive repercussions for the business as a whole.

Driving efficiency is by no means easy, but there are many strategies you can try and adjustments you can make to facilitate positive change.

Here are some courses of action that can deliver results:

Invest in training

Like any other business department, your finance and accounting team could have a lot to gain from pursuing a focused, effective training program that goes right to the heart of the efficiency question and provides relevant, applicable takeaways for participants.

Beyond introducing employees to new working methods and techniques that have an immediate impact on their day-to-day efficiency, training can deliver valuable benefits such as:

• Greater job satisfaction
• Stronger morale
• More effective communication
• Team bonding

You want to feel confident that your investment in training will deliver returns, of course, so it’s important to avoid common pitfalls such as failing to update outmoded programs and not listening to staff feedback on how schemes can be improved.

Emphasize communication and collaboration

Colleagues having the ability to communicate effectively with one another and who realize the benefits of collaboration are a huge advantage in every area of business.

In the finance department, enhanced communication can contribute to maximizing efficiency and reduce the risk of mistakes or oversights that could have serious repercussions for the company.

There are many different styles of communication, all of which can prove effective and deliver positive results, based on the preferences of individual employees and the scenarios in which they’re being used.

When it comes to collaboration, being able to work well with other teams can be particularly important for the finance department, seeing as its day-to-day work and responsibilities are so closely linked with every other area of the business. Software tools such as shared project management systems can prove particularly useful in supporting collaboration.

Embrace new technologies

The rapid evolution of digital technologies in the 21st century has given rise to a vast array of business solutions and software platforms that can help you drive up levels of efficiency in your finance department.

Some of the most powerful tools in the modern business environment are found in the cloud. Moving away from legacy tech infrastructure to the cloud can unlock many benefits, such as:

• Cost advantages of not having to purchase expensive
• On-site equipment
• Greater flexibility when you need to update your systems

Cloud-based tools such as project management software and document storage can have a huge impact on the efficiency of your finance team, making information sharing a lot easier and helping everyone do their jobs quicker.

Establish clear policies

Every member of the finance department should have a good understanding of their role within the team, their core responsibilities and the standards they’re expected to uphold. This is achieved through clear, consistent policies, adherence to which can make a big difference to the efficiency of a team.

Some general company policies - relating to punctuality or attire, for instance - will apply to all employees, but it can also be beneficial to have specific rules in place for finance department staff. Given the business-critical nature of their work, members of the finance team should be made aware of how important it is that they uphold the department’s policies at all times.

Just as the company expects its clients to respect financial agreements and keep to their payment terms, your suppliers and employees also expect to be paid on time. The smooth running of regular financial processes such as these depends on every team member being familiar with the department’s policies and sticking to them.

Consider the benefits of automation

There are many routine processes overseen by the finance department that could be handed over to automated systems, freeing up your employees to focus on other tasks that make better use of their skills and deliver more value for the business.

Examples of jobs that are ripe for automation include:

• Receipt of inbound documents and distribution to the relevant departments
• Data entry
• Invoice approval
• Sending late payment reminders
• Paying vendors and suppliers

As this infographic shows, robotic process automation (RPA) is already being widely used in industries such as manufacturing. The biggest perceived benefits of this field of innovation are:

• The reduction of repetitive tasks
• Lower risk of human error
• Cost savings
• Freeing up time for high-value work

There’s clearly a lot of potential in RPA to drive efficiency in various areas of business. If you can find the right way to apply these technologies, they could have a transformative impact on the finance department.

Further reading:

• Looking Past Covid-19: Five Critical Messages for CFOs
• How to Choose the Right Finance, Payroll, and HR System
• FP&A Survey: The Technology and Data Platform Supporting Finance Decisions