Yet, it is not an exact science but an amalgamation of various processes and projects rather than a single, straight-forward procedure. It is not uncommon in the business world for finance functions to be unable to produce business information that’s clear and accurate enough to base important decisions on. However, if the finance function is left in the status quo for too long, the finance transformation can be very costly and would require careful planning and plenty of resources.
The initial set up of the finance function may have worked originally. However, business processes tend to become obsolete very quickly with the passage of time, growth of the business, volume of the data, evolving technological trends and cultural shift in the workforce. Therefore, rather than a large, ad-hoc Finance Transformation project, the change needs to be dynamic and nimble. As soon as an issue in data quality is noticed, the problem needs to be acknowledged and the root cause identified.
Some standard culprits for the finance function not operating optimally are duplication of effort, manual processes, under-resourcing, out-of-date systems, complex procedures and lack of centrally organised data. Addressing individual instances as they occur would save time, money and effort. For example, something as seemingly insignificant as processing expenses manually may be causing a delay in information being available to the leadership team regarding the costs associated with specific projects, a much more significant problem.
It is very important to scratch the surface and find out where the problems really lie. To continue the example, it is possible that your expense policy does not put a time limit on expense submission. It is also possible that the manual claims were formulated in such a way that employees struggle to fill them in correctly and in a timely manner. Another possibility could be that the finance function cannot reliably assign expenses to the respective projects due to the way that the system works. Even worse, it could be all of the above.
The cause can only be reliably established by consulting with those directly involved in the process. Therefore, Finance Transformation is a process that needs involvement from the front-line staff and the core accounting function, not just the leadership team. In this particular instance, finding and switching to expense software which works for all stakeholders would be the natural solution. If all the little niggles are ironed out as they arise, finance will remain a dynamic function and would be continuously transforming.