How to build a highly effective finance team
The finance team is one of the essential aspects supporting your business strategy, financial growth, and overall performance.
In this article, we will discuss the challenges facing the finance team and the key people, processes and technology characteristics required to build a high performing finance team.
As the Chief Financial Officer (CFO), you are expected to support your business with critical financial decisions that will impact its short and long-term performance.
A highly effective finance team drives the business’s strategy by providing management information and data to support the business decisions enabling business growth, and financial success, and ultimately setting a clear business direction.
However, building and running an effective finance team takes several factors.
Common challenges facing the finance team
There are many challenges facing today’s CFO and their finance team in a fast-paced, multi-connected, data-driven business world economy.
CFOs must build a framework to drive profit and growth and guard their businesses against risk. The growing volumes of fast-changing data across disparate systems have become increasingly challenging to manage.
There are more significant numbers of business stakeholders, internal and external, that need to be kept up to date with the financial performance of the business.
Keeping up to speed with technology trends and changes in the finance industry is almost a full-time job. Gartner found that 66% of finance leaders believe the digital competency gap is widening. As technology rapidly changes, so do the finance team’s skills need to develop and keep up with the pace of innovation.
Lack of proper systems
Without proper systems and processes, the CFO and their finance team are caught up in day-to-day administrative tasks, including manual data entry, manipulating data or rekeying information. This can lead to frustration in the finance team and manual errors. Instead of using the data for management information, significant time is spent ensuring the data is accurate – by which point the data is probably out-of-date.
Operating in silos
For many organisations, the data remains in silos, either on disparate systems or spreadsheets. When information isn’t stored in either a single, central location or seamlessly connected – as well as being easy to access and understand – it makes it impossible to get a single version of the truth, let alone lead the business forward. Rarely is the bigger picture found in isolation.
Time and resource pressures
Due to time and resource pressures and the difficulty of pulling information together, finance teams and the wider business often analyse historical data, providing static reports which are of little value in supporting business decisions about the future.
Complexity of data
In many cases, the sheer volume and complexity of the data in the business can be a barrier to unlocking its value and turning it into useful management information.
Successful CFOs recognise that technology can be a game-changer for the finance team and wider business. Using technology that automates and streamlines repeatable processes encourages the finance team to focus on matters that need resolution and critical judgment.
Visit our Strategic CFO Resources Hub for more information on the key challenges affecting finance teams, what’s holding finance professionals back – and what you can do about it.
The amount of data is phenomenal, but what’s worse is the lack of harmonization. Unstructured data is what kills you. The key for me is how do I get back data in a usable and consistent form, such that the business can look at it, understand where the value chain is, and make decisions.
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Organising your finance team to support your strategy
One of the most critical factors in building a highly effective finance team is to structure the team to support your business strategy. This includes many elements, such as the organisational structure, people, process and technology aspects, and the inter-relationships with other functions in the business.
Consider your finance team structure
According to Forbes, a CFO should think about “curating” their finance team rather than “structuring” their team. The team should have a mix of capabilities that go beyond traditional finance technical skills and incorporate talent that includes leadership abilities, relationship management, problem-solving and soft skills .
If these skills do not already exist in the team, they can be developed through training and mentoring. Once trained, the finance team should be given the opportunity to use their new skills through interactions with the rest of the business, to improve strategic business partnerships in other departments and outside the business.
Developing the characteristics of a strong finance team
A strong finance team’s key characteristics include many factors spanning people, processes and technology.
People factors include diverse backgrounds with a varied mix of backgrounds, skills and experience. This provides a range of technical abilities that can support and challenge each other and combine to support and enhance the finance team. These include:
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Enhance non-technical skills – according to the Work Institute’s 2022 Retention Report, 33% of people left their roles due to Career and Job reasons, including opportunities for growth, training and resources. Aim to develop your team members’ careers within the organisation, including different jobs within the company, growth in their current position, or new non-technical skills.
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Develop storytelling - although the finance team will be fluent in understanding financial data, the wider company may not be. Therefore develop communication skills in your team that incorporate storytelling. This will help a non-technical audience understand not only the company financials but also get to know more about the work of the finance team and therefore build rapport with other business departments.
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Create coaches and mentors – build your team’s coaching and mentoring capabilities to not only develop soft skills but also to support new team members and embed a coaching culture into your department. This will improve relationships with the teams and enhance retention rates through continued support.
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Prioritise continued professional development – in the Work Institute’s report,22% of employees left due to career reasons, including opportunities for growth, promotion or achievement. Ensure that continuous professional development is top of mind when building your high-performing finance team, to keep skills current and develop new skills to attain promotions and career development.
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Recruitment - Gartner's 2019 report "Leading the Next-Generation Finance Workforce" states that three out of four finance organisations will have a skills shortage because they do not consider nontechnical skills such as innovation and digital skills during the hiring process. Seek to diversify your team when hiring by looking for strong interpersonal and digital skills, varied backgrounds and technical skills.
Encourage cross-functional working to connect to all departments
A highly effective finance team has a vital role in the business, ensuring that they are a strategic partner with the leadership team and can communicate to provide financial insight and support for growth.
Consider having lunchtime brown bag sessions where the team can present the current state of the business using storytelling and enable people from other parts of the company to get to know the finance team and what they do.
To further integrate with other departments, place or second finance team members in departments that may need additional support to help enhance the knowledge of other non-finance teams and build better business relationships.
Process factors include taking a holistic view of financial information and processes and how they fit into the overall business and interact with and impact other functions.
Ineffective, inefficient, or out-of-date processes can mean that your team will spend additional time working around processes or on manual tasks when they could be spending their time more effectively and efficiently.
There are five steps you can take to review and improve your finance processes:
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Identify and review all existing processes – catalogue all your existing processes and highlight any areas where process improvements could be made, such as bottlenecks or duplication of tasks.
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Process mapping – document and map out all the existing finance processes, including their interactions across departments, and then identify where process improvements can be made.
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Identify process technology – conduct a review of all technology that is required to support and automate your newly mapped finance processes, so that you can maximise process performance and increase the finance team’s capacity.
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Train your team – once your new technology and improved processes are in place, train your team in the new working practices, fully document the new processes and communicate the benefits to your team and the wider business.
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Post Implementation Review – after a few weeks, review the new processes and technology. Consult your team for any feedback on the performance or any glitches that need to be resolved. Identify any improvements that can be implemented in the next iteration.
By taking the time to identify and resolve system and process inefficiencies, you can greatly improve the performance of your finance team. You’ll remove bottlenecks and out-of-date practices, and free up your team to provide more value to the wider business.
Technology factors and connected data
Technology factors include taking a more comprehensive view of technology and how it can benefit the finance team, including enabling connected data. Finance leaders everywhere are becoming more aware of the impact that priceless financial data can have on company growth.
According to Gartner's report - Unlock Your Finance Team's Digital Potential, there are five key digital competencies that are relevant for finance teams:
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Technological literacy – knowing how to exploit technology for better outcomes for the finance team and the business.
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Digital translation – being able to explain how the technology interacts with finance stakeholders, processes and systems.
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Digital learning and development – quickly incorporating new digital learning requirements.
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Digital bias management – understanding bias in machine learning and managing the associated risks.
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Digital ambition – the capability and drive to take on new technology and ways of working.
However, only 21% of finance teams have technological literacy1 – one of the most important factors in today’s finance world.
Analysis of connected data
Successful finance teams also prioritise ensuring that they have a complete view of the business using technology that connects every department and unifies data.
Using a financial management software like Access Financials will give you a 360-degree view of the business provides the finance team and other departments across the business with a unified view of what’s relevant to them.
Connected data used by all teams means that analysis and planning will be accurate and up-to-the-minute, allowing both the CFO and the wider business to plan and make decisions that matter, with confidence.
By leveraging the right technology, automating processes and using data and analytics more effectively and encouraging data to be shared, updated, commented on and valued, the finance team can add value to the business by going beyond the obvious data interpretations, uncovering the real drivers to business growth and making evidence-based decisions.
Learn more about how our Finance software can help you automate your financial processes, connect your data, and support you as you build your highly effective finance team.
You can also explore our Strategic CFO hub, dedicated for CFOs, packed with advice and resources to help you become more strategic as your organisation evolves.
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