What is your business’s finance department like? If you don’t have one, chances are that it’s lacking in the ways of modern business. Just think about how many fiscal tasks would be better managed by one person — or at least a strong collaboration between two or more people. A finance department can reduce the risk of costly errors, taking financial matters off your plate so you can focus on what’s important.
If you’re a business owner who’s been hesitant to create a finance department, you might consider it today. Here are effective ways of elevating your business finance department.
Keep Your Technology Current
A finance department that can stay current with the latest technology will make tracking and monitoring financial data easier. Modern technology systems can help your finance team automate several tasks so your staff can concentrate on other things. For example, automated systems can handle account reconciliations and payee updates, work that would otherwise be time-consuming.
Using reliable technology can also make it easier for your finance department to keep accurate records of transactions and prepare reports promptly. And the best thing about technology is that you can use it in various ways. A company can invest in hardware and software to do the job more efficiently.
Communicate Better
Before adding a finance department, ensure you integrate your new staff members well with everyone on your team. Ensure your accounting department follows through with the work assigned and bills for invoices and expenses on time, so you don’t have problems later on. Communication with your accounting team is crucial to managing the day-to-day financial tasks of your company.
When you have a finance department, your employees can hire a consultant or liaison to assist with financial decisions. This liaison can review and recommend cash flow, purchasing, accounting, and payroll issues.
Hire The Right People
Hiring a single finance professional is probably best if you’re adding a finance department for the first time. This person can take on the following responsibilities: records management, financial analysis, reporting, budgeting and forecasting, accounting, and taxes. Your new hire might also be responsible for financial planning and analysis (FP&A), which is closely related to budgeting.
You’ll want to hire qualified and experienced individuals with Customized Business Finance Management skills in these roles. For instance, someone with a CPA, CMA, or CA designation would be a great addition to your finance team. Make sure the person you hire is a team player since they will work closely with other staff members. If you do not have the time to recruit financial experts, you may consider hiring finance & accounting recruiters to do the job for you. With accounting staffing services, it will be easier to find qualified professionals who can help your business run more smoothly.
Create An Incentive Structure
If you have a small business and manage to hire the right people, your finance staff will be motivated to produce great results. You may consider giving your new finance staff members a bonus or incentive structure. Your incentive structures should provide financial bonuses, commissions, and other profit-sharing opportunities.
These types of bonus structures can be linked to various employee performance levels. For example, an employee can get a bonus for exceeding budget targets. Or the individual could receive a commission for reaching certain sales targets. These types of incentives will encourage your staff to perform to their best.
Focus On Quality Of Data
Before using a finance department in your business, you should evaluate the data quality. A streamlined, automated system for gathering and storing all your financial reports can help the accounting department do its job more effectively. The automation will allow for better tracking of transactions and easier record-keeping for your company and your staff members.
You might also spend time understanding how many and what type of financial reports your business needs from each department. For example, you may find out that you need to monitor sales, income, and expenses in addition to budgeting. All of these reports will help your business run more efficiently and effectively.
A great finance department can help you make more money. It can also help your employees concentrate on selling more products. And when you don’t have to worry about all the financial tasks, you’ll be able to get back to focusing on your business’s core functions and growth strategies. A successful business will have a strong finance department, which is vital for many reasons.