Wednesday, July 2, 2008

Resolutions for a New Year

For many companies, June 30th marks the fiscal year end; as the sales teams’ frenzy wraps up, the Finance team is crunching the numbers to publish reports. And while publishing the annual ‘report card’ isn’t the most glamorous part of the job, it is often the most externally visible aspect of finance, and within many companies, finance and accounting activities do consume the vast majority of the Finance departments’ time.

A Changing Role

In a recent CFO Research study of 171 finance executives, they found that over 70% of finance activities are still focused on routine finance and accounting tasks, with less than 30% of time spent on decision support. But in the next two years, over 86% of respondents anticipate incremental or dramatic improvements for supporting business management. (1)

The role of Finance is changing to take a greater part in guiding and influencing both management and business decisions alike. Many companies are realizing the value of partnering finance with business to streamline efficiency, productivity and profitability. But while the value is recognized, the time and resources dedicated to this aspect of the role still remain limited. So the challenge becomes: how do we in Finance become an active contributor in and supporter of improved business management, while continuing to support traditional accounting and finance activities?

Finance Report Card

It’s the end of the year; the company report-card is being published. Let’s think about our own organizations – how did we support innovation and collaboration through the business this year?

  • Educate C-level team. If you are fortunate to have a finance-savvy CEO, much of your work is done. But in many companies, educating the executive team about the opportunities for business collaboration, and the kinds of information that finance can provide to teams, is a critical step.
  • Establish relationships with business units. Adding value to business information is the fastest way to become a trusted partner to business units. Creating a two-way channel of communication allows Finance to fully understand the business issues and end-user requirements, in order to provide the most meaningful support possible.
  • Collaborate with IT to find best ways to leverage operational and financial data, and to explore future company requirements for information. In order for Finance to provide strategic direction, and for business teams to make appropriate decisions, users must have access to accurate and timely information. In collaborative efforts, scope, budget and prioritization are established to ensure the project best meets the business end goals.
  • Internal education. As the role of Finance rapidly expands, there is a need for a broader skillset within the team. Analytical skills must be complemented with market knowledge and an understanding the business functions. Collaboration with technology groups requires knowledge of technical requirements and capabilities as well as a common language. All of which means that ongoing education and external focus is imperative for success.
  • Examine existing processes. By refining and modifying existing processes and systems, there is often opportunity for significant improvement. What changes to the planning process would yield greater insight into your market? How fast are you able to get information to business teams? Can they respond appropriately with the information provided? Are the same questions consistently repeated at executive meetings? What is the value of being able to provide this information?


This list just begins to scratch the surface of opportunities to work on innovation and collaboration within a business. Even if you work in an area where the company sees Finance as primarily focused on traditional reporting and accounting tasks, there are myriad opportunities to make contributions that will gradually have larger effects upon the organization. Beginning with the education and support of executive management and business units, you establish yourself as a value-adding member of a larger business team. And as companies experience faster and more significant change in order to keep up with competitive markets, the role of Finance will expand and change as well.

As many companies enter a new fiscal year, and in the tried and true tradition of New Year’s resolutions, the question to Finance: What role do we envision for ourselves in the company? What will our contribution to the company’s success look like in the following year? What changes do we need to make to be leaders within the organization? And once we answer these questions, we’ve already got our new year’s resolutions done. Closing the books is easy after that.

1) CFO Research. “The Evolution of the Finance Function: Teaming with Business Management to Adapt and Thrive.” March 2008

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