How to Make Your Finance Department Lean
We can’t stress this enough: Lean methodology is the path to help your company grow. A Lean company saves – and earns – more money, delivers more value to the customer and doesn’t waste precious time performing unnecessary tasks.
To get the maximum outcome from Lean, it should be applied in every department, area and team of a company. The finance team is very compatible with this philosophy since it is full of processes and it intrinsically connects to the uphill battle of saving money.
If you don’t know how to start paving the way toward a Leaner finance team, don’t panic! We can help.
“Ok… But what is Lean?”
Lean is a methodology that ultimately strives for waste avoidance. By not wasting resources, it is possible to achieve continuous improvement and increase of quality, as well as the delivery of more value in every product or service.
To make it simpler, think about what value your company delivers—what your customer is willing to pay for. For example, if you run a coffee shop, your value is the coffee.
Waste is everything that does not contribute to the value, or does not make the coffee drinking experience any better. For instance, it could be a financial department that uses most of its time filling out spreadsheets and organizing receipts rather than negotiating and approving purchases that would allow the coffee shop to obtain better suppliers.
Through Lean, the company can easily identify bottlenecks – or where the job isn’t flowing as it should – and eliminate everything that is not necessary for the ultimate product or service.
In finances, this means focusing on what matters, the company’s financial health, and minimizing the time spent doing repetitive, operational tasks that do not enhance the value.
Let’s embark on this journey together?
Lean Work = Productive Work
If you work with finances, you probably know that the most significant issues faced by this department are caused by the lack of organization of the requests, which leads to nasty consequences such as tedious rework and recurring mistakes. Let’s not forget that in finances a mild mistake can provoke an avalanche-like repercussion.
In this area, excellence means:
- No mistakes;
- Accurate information;
- Effective internal controls;
- Informative, true reports.
If you want to Lean up your finances area, the following tips are useful:
Map Your Work Processes
A well-structured process is half the battle of Lean. Do not leave the entire process in someone’s head; put it on paper. Draw how every process in your financial department works.
For instance, in the accounts payable process, write down how the invoices are received, how it is decided which employee will make the payment, when the payment is made and how the receipt is stored.
Even if it seems obvious, recreating the processes in a visual configuration leads to a clearer understanding of the strengths and weaknesses. Thus, you can restructure them to eliminate waste and optimize your work.
If you want to learn more on how to map your processes, here are some blog posts you will find useful:
- A Step-by-Step Guide on Process Mapping
- 5 Process mapping benefits
- Mapping your processes: don’t complicate, start simple!
- Basic Concepts: Process Mapping
Automatize Repetitive Tasks
Using automation for operational tasks has so many benefits that the investment in proper tools pays off very quickly.
- Your team members will no longer get overloaded with repetitive activities that prevent them from using their talents and knowledge to make the financial department better;
- The work will be completed in a shorter cycle, so you won’t risk delays in payments or contracts;
- There is less risk of human error, since an automation is less likely to make a mistake than a human is;
- You can optimize the use of your resources – time, money, people, supplies – so the entire company works better, and eventually, delivers more value to the final customer.
There are many ways you can implement automation in your finances department, from simple solutions (such as programming an automatic email) to big ones (such as use RPA – robotic process automation). Evaluate your options to see which types of automation work best for your goals.
Centralize Your Information
We know that a financial department deals with tons of information: requests, charts, invoices, receipts… If every time you need to check out a piece of information you spend time looking for it in dozens of files or drawers, your process is surely not Lean.
Besides the waste of time, decentralized information is also a problem if different members of the team don’t have access to all the documents. If someone’s absence at work one day prevents work from continuing, you might have a problem.
To avoid this, you need to use a process management tool that allows you to quickly find all the required information to complete a task, and share its access to everyone in the team, so if someone’s out for the day or the week, the work doesn’t stop.
Now that you know a little more about how to make your financial processes Leaner, what about trying out Pipefy? It is a Lean process management tool that allows you to do everything we cited before in this text – and more!