A best-in-class financial operations department is essential for the success of any organization. The financial operations function is chiefly responsible for managing the financial resources of the company, completing the routine accounting and bookkeeping duties, providing accurate and timely financial information, and ensuring compliance with myriad financial regulations. Developing a best-in-class financial operations program can be challenging, with competing demands that often leave financial ops under-resourced; however, the following are six steps you can take to help execute the financial operations function at your organization at a best-in-class level.
1. Develop a Strong Financial Strategy and FP&A Function
The first step in executing a best-in-class financial operations department is to develop a strong financial strategy that is supported by a capable financial, planning, and analysis (FP&A) resource. The strategy should be developed with organizational leadership and should include setting clear financial goals, creating a budget, and forecasting future cash needs. The financial strategy should also include a plan for managing risks and ensuring compliance with financial regulations.
2. Implement Advanced Technology and Tools
Implementing advanced financial ops technology and tools is crucial for streamlining financial processes and improving accuracy. This expands beyond accounting software, like Quickbooks or NetSuite, which are basically table stakes now, to include budgeting and forecasting tools, and financial reporting and visualization software. Additionally, a financial operations department should have advanced knowledge of the organization’s ERP and CRM systems, and should leverage integrations where possible to make sure that all the information is accurate and up-to-date.
Financial ops tools that offer built in budgeting and variance reporting will help get your to best-in-class.
3. Hire and Train the Right Team
A best-in-class financial operations department requires a team of skilled and knowledgeable accounting, bookkeeping, and FP&A professionals. Hiring the right team includes recruiting employees with the appropriate qualifications and experience, but also the desired perspective to get your organization to where you want to be, not where you are now.
Financial ops teams can be hired in-house, which places the recruiting, training, and managing on the organization, or you could look to outsource financial operations to a firm to mitigate the human capital risk and ensure you’re working with experienced professionals.
4. Establish Strong Internal Controls
Establishing strong internal controls is essential for ensuring the accuracy and integrity of financial information. This includes procedures for reconciling accounts, monitoring transactions, and reviewing financial statements. Additionally, the financial operations department should have an internal audit function to make sure that everything is in order.
5. Communicate Effectively with Stakeholders
A best-in-class financial operations department should communicate effectively with stakeholders such as owners, investors, lenders, and management. This includes providing accurate and timely financial information, such as financial statements and budget reports. Additionally, the financial operations department should be able to explain and interpret financial information to non-financial employees.
6. Continuously Monitor and Improve
Finally, a best-in-class financial operations program should continuously monitor and improve its processes and procedures. This includes regularly reviewing financial information, identifying areas for improvement, and making adjustments as needed. Additionally, the department should be open to feedback from stakeholders and be willing to make changes to improve its performance.
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Executing a best-in-class financial operations function is challenging, but not impossible. By following these steps, an organization will ensure their financial operations are efficient, accurate, and compliant, which in turn will support the growth and success of the business. If you’d like to learn more about running a successful financial operations function, request a consultation and speak to a financial ops expert at finairo.
