What are Finance Transformation Best Practices?
Business owners will hear quite a few buzzwords throughout their careers. While many of these will come and go, some will stick around. That’s primarily thanks to the processes, systems, or other things they refer to being effective.
Much of that can be seen with marketing efforts, which have shifted significantly in recent years. Not all of these are public-facing, however. Instead, many of them can look inward are your business. One of the largest of these is finance transformation.
If you don’t know what this is, you’re not alone. While this has been gaining popularity in recent years, it’s yet to gain mainstream appeal. It has shown multiple benefits, however, which is why it’s been gaining interest among entrepreneurs.
If you’re unaware of what the practice is, then you might want to know more about it. It can have quite a few benefits for your company. To properly take advantage of this, though, you’ll need to make sure you follow financial reporting services transformation best practices.
Like anything else that’s worth your time, there are a few things you’ll need to know before you dive in.
What Is Finance Transformation?
If you’ve never heard the term ‘finance transformation’ before, then you’ll naturally be curious as to what it is. You might assume that it would be complicated, although you’ll only be half right. In essence, this is a shift in mentality within your organization.
In many companies, finance seems to be a matter of keeping score; you know what’s coming in and what’s coming out. Finance transformation is the process of turning from that into a forward-looking business.
The key to this is focusing on operational and financial processes. These aren’t the only divisions that you’ll need involved, however, as your IT department will also play a large role.
In bringing each of these together, you can align your operational processes with your financial goals and processes. Once achieved, you can find that your company will start seeing many long-term benefits.
7 Finance Reporting Best Practices
As effective as the practice could be for your company, that’s only if you follow finance reporting best practices. If you’re still learning about what the process is, then you mightn’t be aware of what these are.
Thankfully, there are seven best practices that have emerged. These have been the case regardless of industry. As such, they’re worth implementing in your company. These are:
- Standardize your enterprise resource planning software. This will make transaction processing more efficient.
- Reduce, or preferably eliminate, your reliance on emails and spreadsheets for financial reporting and planning.
- Make your budgeting process as streamlined as possible.
- Use rolling forecasts to update and adjust your budgets when needed.
- Automate your financial reporting. This will also help to speed it up.
- Give your managers more power to report on their teams.
- Spend more time on analysis rather than data collection.
By implementing each of these practices, then you should see the many benefits associated with finance reporting. The largest of these include better business agility, reduced costs, and an overall improved company performance.
While this will take a certain amount of work upfront, you’ll start seeing the benefits over time.
Benefits Of Finance Transformation
You might think that that’s a lot of work. What would be the point of it? As it turns out, there can be multiple benefits of finance transformation, especially long-term. The largest of these are:
- Processes can be done much faster, as you’ll identify areas of improvement.
- Your financial data will be more accurate and reliable.
- Financial information is much more detailed and can be accessed instantly.
With those benefits, it’s easy to see why more companies are taking advantage of the process. You can also improve multiple processes and projects because of the information you’re able to gather.
That should allow your company to be more efficient while also cutting down on any unnecessary costs.
Ensuring effective finance transformation isn’t going to be easy. There are multiple stakeholders who’ll need to be involved. You’ll also need to make sure that you have the right people running things, such as managers, alongside the right resources.
While you’ll typically have a detailed plan when you first start, you should also be flexible. One of the goals of finance transformation is to make your company more fiscally and operationally agile. The transformation process itself should reflect that.
It’s always worth speaking to an expert when you’re going on your finance transformation journey. Though your employees may be up for a job, they can often need a little help throughout the process. There’s no reason not to accept this help, so what’s preventing you?