Knowing how to increase productivity is essential for those who want to grow in their companies and also develop professionally. In financial management, and considering the competitive environment in which we operate, staying ahead requires a strategic and proactive approach.
Nowadays, it is not enough to simply master numbers, spreadsheets, reports and systems . It is also necessary to implement practices that increase productivity and bring tangible results to companies. This means, among other things, that the time has come for financial professionals to dedicate more time to analyses and decisions that really impact the business.
How do you do this? Below, we share with you some Good Financial Management that will help you focus on what really matters. Enjoy!
1 – Identify and eliminate financial bottlenecks
From the rundown of good monetary administration rehearses, we start by recognizing bottlenecks for a couple of reasons. As well as obstructing the effective progression of data, they can prompt modify and make many individuals in the group sit around idly that could be spent on additional essential exercises .
The most effective way to recognize these bottlenecks is to plan all monetary cycles and investigate where postponements or shortcomings happen. As a matter of fact, quite significant interaction planning distinguishes bottlenecks, yet additionally redundancies and open doors for development.
To do this, cause a rundown of the multitude of cycles that will to be planned, for example,
- Accounts payable;
- Accounts receivable;
- Bank reconciliation;
- Accounting closing;
- Planning and budgeting .
Once the processes have been mapped, it is necessary to understand all the existing steps, that is, all the activities they have and those responsible for them. One suggestion is to draw a flowchart and, if you want to understand better, in this article we explain in detail what to do.
Once the flows of each process have been designed, it is possible to identify:
- Redundant or unnecessary steps;
- Delay points or bottlenecks;
- Areas where errors frequently occur;
- Processes that could be automated.
Then, just move on to improvements, which can include automation of manual tasks, systems integration, implementation of new tools, changes in responsibility, among others.
For example, if the monthly accounting closing is taking longer than it should, map the process to analyze which steps are causing delays. When you identify them, look for solutions to speed them up.
2 – Automate financial processes
Robotizing manual monetary cycles is one of the most mind-blowing administration rehearses that can help the efficiency of your money group (as a matter of fact, it is one of the best ways of making your groups more useful). Robotization diminishes human blunder, speeds up task execution, and opens up experts to zero in on exercises that require examination and navigation.
For instance, via mechanizing bank compromise , all monetary exchanges are recorded and accommodated accurately, without the requirement for manual mediation and without mistakes that can influence monetary and financial data ( DFC , DRE , accounting report ).
For the money region, spending plan the board devices and ERPs computerize processes and smooth out exercises . To grasp this, envision the spending plan survey cycle of Organization A, which, as well as just having numbers in bookkeeping sheets, doesn’t routinely screen arranged versus real versus verifiable figures .
While looking into the spending plan, the regulator and the monetary supervisor confronted a few difficulties, for example,
- Disorganized data collection: Data is scattered across different spreadsheets and systems, with no centralized consolidation. The process of collecting this information is manual and time-consuming, involving multiple reviews to ensure that all data is correct and complete.
- Lack of visibility and analysis: Data analysis is limited and reports are created manually. This makes it difficult to identify deviations and compare planned, actual and historical budgets, making the review process less efficient and more prone to errors.
- Inefficient approval process: Budget review requires approval from multiple stakeholders. Without an automated system, the communication process is done via emails and in-person meetings, delaying approval and increasing the possibility of miscommunication.
- Manual ERP update: After approval, updating budget data in the ERP system is done manually. This process is error-prone and can result in outdated data.
To solve these problems, Company A opted for a budget management system that integrates with its ERP. As a result, it has significantly reduced the risk of human error by ensuring that all transactions and figures are correct and reliable.
Additionally, with real-time data updates and detailed variance analysis, management can now make informed decisions quickly and respond effectively to changes and challenges.
Above, the importance of process mapping as a good financial management practice was mentioned. As mentioned, this mapping helps to identify bottlenecks and processes that can be improved.
Speaking about improvements, one way to identify them – but now thinking about areas such as contribution margin , return on investment (ROI) , working capital and current liquidity – is through monitoring performance indicators .
Continuously monitoring KPIs is essential for making informed and quick decisions, in addition to enabling more agile and proactive financial management.
4 – Centralize information
One of the greatest obstructions to efficiency is information fracture. Data dissipated across accounting sheets, reports, note pads, messages, and more can prompt irregularities, copy information, and unfortunate choices (or more terrible, awful choices).
In this manner, concentrating monetary data is one of the great monetary administration rehearses that couldn’t be left off our rundown. One organization that knows very well how much this training has an effect is Skeelo , the biggest digital book and book recording conveyance stage in Brazil.
As per K Cout , answerable for the FP&A (Monetary Preparation and Examination) region at Skeelo, one of the difficulties for her group was the centralization of monetary cycles and the production of definite financial plans and figures, which were done physically in Succeed accounting sheets .
The organization found the arrangement it was searching for in Treasy’s product. With financial plan information brought together in the framework, Skeelo immediately acquired itemized and exact command over its funds.
Just to give you a thought, because of the centralization of data, the month to month shutting time was diminished from 15 to only 3 days, killing practically 100 percent of the requirement for arrangement gatherings to dissect results .
5 – Encourage communication and collaboration
Another good practice for productive financial management is effective communication and collaboration among team members. Communication and collaboration tools offer great assistance in this regard. This is the case for:
- Slack
- Microsoft Teams
- Trello
- Treasy Action Plan
Treasy’s Action Plan is available in the free Financial BI plan (you can find more information in the next topic). It is based on the principle that taking action based on the analyses and insights is just as important as monitoring and analyzing KPIs . Thus, the Action Plan feature uses the FCA (Fact, Cause, and Action) method , or you can use the methodology adopted by your company.
It is possible to create plans by department, indicating those responsible, deadlines and other information. The actions can be integrated with Google Calendar, and whenever something changes, the system can also send a notification to those involved. This facilitates the sharing of data in real time and the monitoring of the progress of financial projects, increasing efficiency and promoting a more collaborative and dynamic work environment .
Below you can see an example of a screen shot of Treasy’s Action Plan feature.
6 – Use real-time reports and dashboards
Last but not least on our list of best financial management practices, it’s time for real-time financial reports and dashboards . When it comes to productivity, they are important because:
- They give ceaselessly refreshed information, permitting administrators to recognize issues and open doors rapidly;
- With the perception of monetary KPIs continuously, they empower a proactive way to deal with monetary administration;
- Permit issues to be distinguished before they become basic;
- They dispose of the need to aggregate information physically, saving time and decreasing the chance of mistake.
For example, a finance team using a real-time dashboard to monitor cash flow can immediately see when there is a discrepancy between projected and actual cash flow, such as a late payment from a customer or an unexpected expense. Finance professionals can then act quickly to resolve the issue.
One dashboard you can try today is Treasy’s Financial BI . It integrates multiple data sources from ERPs, Payment Methods, etc. and also allows you to:
- Monitoring of actual, planned and committed cash flow;
- Generation of vertical and horizontal analyses, drill-down, slice and dice and comparatives;
- Creation of graphs and management reports according to your company’s needs.
In conclusion
Expanding efficiency implies conveying more outcomes to the organization and utilizing time astutely. In this article, we recommend great monetary administration rehearses, for example, recognizing and wiping out bottlenecks, robotizing processes, observing markers, unifying data, and advancing correspondence and coordinated effort.
Also, we feature the utilization of continuous dashboards , as they give important bits of knowledge that can direct navigation and assist the organization with adjusting rapidly to advertise changes. Still regarding the matter, we have different tips to share with respect to using time productively for experts in the monetary region.