Process efficiency so often one of the key differentials between a business which maximises their profitability, and one which doesn’t.
Henry Ford reduced the amount of time it took to assemble cars because he was the first to develop the assembly line mode of production.
Most businesses have experienced the impact of not being able to employ people when needed, imagine not having key finance people when you need them. One of the ways to mitigate the potential loss of a critical role, such as finance, is to look at the technological solutions available, and to understand the number of excel sheets being utilised within the finance role. An advantage of using technological or software solutions is that the role becomes independent of the person.
How to identify and solve process inefficiencies:
You can assess the efficiency of your business process or you can bring in a business process specialist. The following are some of the questions they would explore with you:
What is your current technology?
Are you using it to its potential?
Is there technology which has superseded your current software?
How many excel spreadsheets are being used with the current role?
What are the resources used in the process and what uses the most resources? (hours, tools, supplies, subscription cost).
What are the interruptions which occur?
If you were to start-up as a new business today, what software, tools, people would you utilise? What is your opinion on this, and what is your Accountant’s?
Has your team had the opportunity to have professional training for their role, or has their training come from someone exiting the business, who was potentially already checked-out?
Is the finance process automated?
Automate and Integrate
In the post Covid environment the finance function is automated. No longer should your team be entering data manually or paper invoices be arriving on your desk to sign. All aspects of the finance function can now be automated, and can also generally have an App on your phone too.
This process can be streamlined with the use of software.
Buyer beware – not all software in this space is created equal. Some will bring in the dollars, date, supplier name, and attach a copy of the invoice. Others will bring in more including the line detail and quantities, and provide multiple approval levels.
Automated statement reconciliation helps with managing suppliers for whom you have a significant volume of transactions.
Do you use Purchase Orders? PO’s can add a layer of inefficiency when they aren’t set up with appropriate workflows.
Allowing anyone to setup a PO and have approvals set with the appropriate person can create an efficiency, particularly if it the whole process is run from the teams mobile phones. Once approved, it is easy to send through to the supplier, likewise to match back to the supplier invoice once received.
Invoicing & Accounts Receivable
Invoicing can be a time-consuming process, particularly when multiple people are incorporated into the process.
Agreeing pricing upfront can reduce the time commitment for invoicing.
Tracking out of scope time separate from fixed price agreements also speeds up the invoicing process.
Most software will now automatically issue reminders, statements, and charge default interest.
Automated statement reconciliation helps with managing customers for whom you have a significant volume of transactions.
There will be times when your team need to make purchases from their personal funds, or from a firm credit card.
There are numerous Apps available, which provide an automated process for collecting the invoices electronically, and submit them for approval. No more excuses for I lost the invoice!
Using Business Studio to Improve Your Finance Processes
While automation sounds great, it often intimidates, or isn’t something as a business owner you want to have to deal with, or alternatively you may have concerns with how your team will react, so having an external experienced advisor helps deflect some of the push-back or resistance to change. Here at Business Studio we have over 20 years experience of assisting businesses with their finance process and overall business efficiency. We are able to work with your team to identify where the efficiencies lie, and to help them manage the behaviour impact of change.
Business Studio can:
Undertake a needs assessment
Develop a plan to fit your specific needs
Can be the implementation team or coach
Identify software solutions specific to your needs
Train your team
Time is Valuable
Challenges in business generally come back to a lack of time. It's up to everyone within a business to find solutions to manage time cost effectively, so that each person within the team can carry out their responsibilities efficiently.