How to build a highly effective 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

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:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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