Sitting at the core of every organization, the way a finance team works is a critical element in delivering organizational resilience. So just how do finance teams in resilient organizations help make sure their organization is in the best position to weather any storm?
In our experience, the answer lies in adopting new habits and ways of thinking.
Here are 8 key approaches we see best-in-class finance teams take that together make a real impact on organizational resilience.
Imagine what a better future would look like
Resilience relies on being able to imagine that things can get better, and imagination drives change. Yet with regular day-to-day tasks making up a substantial proportion of the finance workload, it’s easy for teams to slip into a steady and settled routine. This can result in people sticking with ineffective ways of working because the burden of handling change seems too great.
But teams in the most resilient organizations see beyond this. They develop the habit of always looking forward and re-imagining what they do and how they work. They recognize that a willingness to change is vital if you are to navigate successfully in uncertain times and are constantly exploring approaches that will increase flexibility and adaptability.
Develop a culture of process improvement
The most successful finance teams are constantly evaluating and improving processes. Managers ask team members for ideas and listen to the answers. Every team member understands the importance of identifying and overcoming weaknesses in systems, resolving problems, and removing process blockers. People are open to new ways of working and prepared to experiment and learn. As a result, systems and processes become increasingly robust and reliable, giving confidence when the unexpected happens.
Act as a strategic business partner to support the organization
In organizations with best-in-class finance functions, silo working is a thing of the past. By engaging closely with colleagues, finance managers understand what support other functions need from them and how finance can contribute to overall business goals.
At a strategic level, they share knowledge and insights rather than just circulating data. At an operational level, they are always looking to improve the service they deliver to both internal and external customers.
Automate and integrate systems for operational efficiency and better decisions
The most efficient and resilient organizations embrace automation and integration, bringing finance systems together with broader business processes. Working closely with procurement and wider functions, they are streamlining activities and cutting operational costs. Importantly, they are also freeing up valuable human brainpower for thinking tasks that have a real business impact.
Specific benefits include a single source of truth (no manual rekeying), organization-wide real time visibility (cloud solutions enable end-to-end processes and data sharing no matter where staff are located), and an end to process bottlenecks that cause hassle and delay.
As a result, data is always up to date and accurate, enabling finance teams to deliver reliable reports and forecasts that strengthen decision making – both to meet regular schedules and on demand in times of disruption.
With automation and integration comes the opportunity to centralize spend controls. Resilient organizations have tightly-controlled approval chains and budget limits. And they don’t have maverick spend. Instead, ordering options are restricted to preferred suppliers. As situations evolve, managers can make adjustments rapidly and change behaviour instantly.
Focus on liquidity
Never is cash king more than when a crisis hits. In resilient organizations, finance teams have a consistent focus on cash flow and work constantly to maximize working capital. From best practice credit control and inventory management to analyzing spending patterns and optimizing payment terms, automated and integrated systems are again a key part of the team toolkit.
Support staff and build a team ethos
A supportive team ethos goes a long way in finance (as in every business function). Effective managers look for opportunities to reduce stress and time pressures whilst also helping individuals build their own personal resilience. By training staff to take on more rewarding roles and fostering a positive and purposeful approach, they create an environment where people enjoy what they do and are more willing and able to pitch in when disruption strikes.
Do the day job well
Resilient organizations can rely on their finance team to deliver all the routine tasks smoothly. They are confident the books will be closed on time, purchases processed without hassle, and payments made without delay. They know the team are on top of what needs doing and won’t let simple issues lead to operational failures.
How are you helping your organization become more resilient? Share your experiences on either our LinkedIn or Twitter account.
Getting the most from your AP data: tips for CFOs and finance professionals.