A business organization has several essential functional departments that keep the business alive and thriving. In the past, many of these functional areas received little or no attention.
However, there is one function that has always been at the heart of a business, and that is accounting and finance. Businesses, in the past and in the digital age, will never be able to ignore the importance of their finance teams. Without financial professionals, organizations would go bankrupt and ultimately cease to exist.
Finance teams are expected to forecast and plan ahead for their businesses. With the assistance of other departments across the organization, a successful finance department works to prevent doomsday scenarios. A well-oiled financial process is the crux of every business, but with the onset of businesses going online, the strategies for the finance team hit a wall.
Compared to earlier times when they had an open hand in their offices, that made things difficult for the finance team.
Meaning of Financial Improvement, and Why Does it Matter?
As the term suggests, financial improvement involves modifying existing financial processes to improve efficiency.
Financial literacy doesn’t just apply to business professionals. All educated individuals, including Housewives, teenage students, adult students, need to be well-versed in financial knowledge to successfully manage their lives.
One doesn’t need to walk to a business school to acquire the skill. Instead, they can take advantage of a number of opportunities in the online world. Programs like Online Accounting MBA Program can help anyone learn financial skills and implement them in real life. It helps also give hands-on training to be successful in a finance career or a business.
During the past couple of years, when COVID-19 shifted all the business processes online, many businesses went down the hill. However, as things settle down, the finance teams have a great opportunity to come up with innovative strategies to grow their businesses.
Let’s take a look at some of the methods by which finance teams can improve their businesses further in 2022.
1. Developing a map to audit current financial processes:
The first step when it comes to improving the financial process is to find out the weak points in the current one. This technique would help them in many ways since many broken processes could improve the company’s financial situation once they’re improved. The easiest and the most reliable method to do that is by developing a map that will audit the entire financial process.
A financial process map represents the entire financial activity that is taking place in the company (which involves budget planning, expenses, and cost-benefit analysis). It marks the entire sequence from the beginning till the end and presents a bigger picture to the finance team, showing all of the weak points that need to be addressed.
Through this way, businesses can also track the time which will be required to improve the financial activity and will be effective in the longer run.
2. Automating the broken processes by using cloud technology:
It is highly important to spot the weaknesses and broken or error-prone methods or processes in a business that may hinder the working efficiency of the financial team. Once you spot the issue, it is now time to fix that, and there is no better way than to follow the road that leads to automation.
While some people may believe that automation could reduce the performance of the working crew, especially the financial team, in actuality, the story is totally different. Automation-driven technology is out there to reduce the effort and help the finance team, not replace them.
With the automation-driven methods, the team will work on cash flow management, financial planning, budgeting, and expense management with ease and quick turn-around time.
3. Hiring Data Analytics to come up with better decisions:
With the traditional approach in the financial processes, it becomes a challenge for the team to gather the reports from the relevant departments on time. When reports get delayed, they must follow up with the appropriate teams, which is extremely time-consuming. As a result, they have little time left to work on the reports and analyze the data. Thus, decisions are made that are not good for the company and may weaken one or more departments.
If businesses could automate or hire professionals to analyze the data gathered from the relevant departments, this would improve the business in many ways. They also provide the finance team with the necessary leverage to come up with better financial decisions for the company. It will lead to high visibility in the report with clear data empowering the finance team to make better business decisions.
4. Developing methods to reduce financial risk:
Be sure to remember that in order to reduce financial risks, one should not treat financial risk management on an annual or quarterly basis. It is something that needs to be done at proper, intervals especially on a monthly level. For example, cost-benefit analysis, budgeting, auditing, or forecasting insurance payments are great times to reduce financial risks. It is because analyzing these reports requires a lot of detailed work that puts upfront many problems in the business.
Automation also helps reduce the financial risk because it does the heavy work for the finance team, so they’d do their work with ease. Manual working methods make the finance team do extra work since they have to do that heavy work by themselves at the risk of being crushed by the burden. That burden would make it harder for the company and at the expense of accidentally ignoring the frauds or risks.
But with the usage of online applications or different types of software, the financial risk is automated. It makes it easier for the team to ensure policy compliance with just the click of a button. This also plugs different types of leaks that were invisible to the team.
Thus, with the pandemic going on with no chances of actual improvement, companies need to improve their financial processes if they want their businesses to stay afloat at the given rate at which so many businesses are closing down. Frauds and different types of financial leaks are becoming invisible to the team since a whole lot of people are working from homes, making it impossible for them to be found out.
If you’re a business owner and you want your business to improve, you should focus highly on automation. It will not only give your finance team the necessary leverage but also allow doing your job with ease. After all, the finance team plays a pivotal role in the growth of any business, and through these methods, they will take the businesses further in 2022.