How to assess your finance processes

Listen to Matt Benaron, Director at VantagePoint, speak about how to assess your finance processes.

Transcript

Matt:

Hi, my name's Matt and I'm a director here at VantagePoint. Today, we're going to talk about assessing your finance function and focusing on processes. So we'll talk through why you might want to review your processes within finance. Then we'll talk about exactly what you can look to achieve through an assessment. Then we'll look at exactly what metrics you might look at when you're diving a little bit deeper into the assessment of your processes. Finally, we'll take a look at how you can actually go about performing the assessment, what techniques you might use.

So, first of all, thinking about why you might want to review your processes. The first thing with any review that you're going to do is to gain a firm understanding of the current status, so what processes do you have at the moment, which are your key processes, where are their key dependencies, who are involved with those processes, first of all, defining that overall landscape of process is the most important starting point.

Overall, the objective of this should look to future proof the finance function within the wider organisation. Now that will cover everything from people completing the processes to technology that you're leveraging as well. But ultimately you want the finance function to grow with the business to adequately support the strategic initiatives of the business, and that will be achieved through future-proofing.

It's important to benchmark against best practice, and that can be internal best practice as well as external. So ensuring that the general performance of the finance functions' processes are in alignment with the rest of the company and potentially other finance functions externally as well. There's always an opportunity to identify improvements that might be around automation or streamlining and overall assessing your efficiency, so what are you getting out of the processes for what are you putting in, and trying to really critically assess whether your time is being spent in the best areas.

Finally, data security and digital compliance are really, really topical for all businesses now with frameworks in place like GDPR. So it's an important factor and a great opportunity to take a look at your general data security and any compliance requirements that your processes may need to be in line with for internal or external compliance.

So thinking in a little bit more detail about what can be achieved through the assessment. So we've spoken about mapping out key processes, literally drawing out those process maps and coming up with schematic diagrams that best articulate processes look like at the moment could be a really good way to in the future articulate change initiatives and improvements, but also it forces you to walk through the motions of ensuring you do have a complete view of all of the processes that you're reviewing. Through that you'll be able to look at the relationships between processes, that might be relationships between systems or teams, but understanding how it all joins together.

It's important to look at the individuals that are supporting those processes as well, and thinking about the time commitments of those people and where they're spending their time. Then from that, you can start to set achievable goals for the future and where you might want to make efficiency improvements in the future. Other areas you can look at is designing new processes. So that might be step two, but as an initial step, there might be some quick wins, improvements that you can make to process a design really quite easily. Some process challenges will be driven by technology. So looking at technology restrictions, but also opportunities. You might have technology in the business that could be supporting your processes more, but you're not using it to its full potential at the moment.

That leads to the overall identifying areas for improvement. The main objective of the review will be to get a clear view of the current state, but also start to think about where you can improve, what you can do to the processes, the people that are supporting those processes, the technology you're using within them to drive some improvement in the future.

Then thinking in a bit more detail about the metrics that you might use when you're assessing processes, and we always encourage the use of these metrics to try and quantify the output of the assessment you do so you can better explain to a layman or someone else within the business what you learned from the assessment, and also to focus in on the core metrics you'd like to improve upon in the future. So things like what reporting processes you have, the overall efficiency and security metrics, thinking about scalability, so the ability to grow in the future, the flexibility that your processes have. If you are to acquire businesses in the future, how ready are you to onboard another business into those processes, and what might that look like.

Thinking about robustness, so how watertight are your processes, what are your processes for capturing errors and capturing issues, and how do you learn from that? That feeds really nicely into data integrity because data is often a core part of the challenge in modern finance processes. You can think about key dependencies. So how many key dependencies do you have, where are they? Is that okay, or do we want to try and decrease some of those? Some of those can be decreased through automation, so assessing things like level of automation, will also help you work towards things like what is the working day timetable, how does the work in a day timetable fit together and where can the work in day timetable potentially be improved? So these are just a few ideas that you can select from and add more to, but think about some quantifiable metrics that you'll use through the assessment process.

Finally, thinking about how you'll perform the assessment. So again, thinking about some qualitative and quantitative ways of performing the assessment. So you can look at doing interviews with the team. That's always the best starting point for learning about the current state, and also getting some tactical views of ways to improve. So speaking to the team across the organisation, or certainly across the finance organisation to see what's going well at the moment, what can be improved and what the people performing those processes day to day think.

You compare that with process observation, so actually sitting down and observing key people completing processes or systems, and have a focus on manual processes, system processes, but also into team processes. So don't just think about one or the other. Think about the different types of process across the business. Then that can be paired with things like survey feedback, where you can collect information en mass. That can also be paired with building and defining process maps and charts, so starting to producing deliverables off the back of the review that better explain to external stakeholders what happens within the finance team. You can also potentially do some performance assessment on very specific processes. That works really well with technology. If you've got a technology-driven process, you can do performance benchmarks against it to see how well the process is performing.

Finally, think about external assessments. Sometimes engaging a third-party organisation to support you in the review of your finance processes can be really effective to have that independent view. Some experience of other finance organisations for you to compare and contrast against, as well as experiencing completing external assessments to better guide the way in which you interview and what you look at and what metrics you should assess against. So hopefully you found this video useful. If you've got any questions or comments, please put them below or reach out to us on the email on the screen at the moment. Hope you've enjoyed the video and look forward to speaking to you soon.

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