How to Make Your Finance Department Lean
Why the lean methodology is the right match for finance processes
The 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, this methodology should be applied in every department and team within your company. The finance team is very compatible with this philosophy since it is full of processes that are intrinsically connected to the uphill battle of saving money and is a part of most (if not all) processes within a business.
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What lean means for finance departments
Lean is a methodology that ultimately strives for waste avoidance. By not wasting resources, it is possible to achieve continuous improvement and increase 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, and what your customer is willing to pay for. For example, if you run a coffee shop, your value is the coffee. If a task doesn’t make your coffee better, why should you waste time on it?
Keeping with the coffee shop example, waste is everything that does not contribute to the value, or does not make the coffee-drinking experience any better for your customers. 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.
For finance departments, 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.
Tips for more lean finance departments
If you work within a financial department, you probably know that the most significant issues faced are caused by the lack of request organization. This leads to time-consuming consequences such as tedious rework and recurring mistakes. After all, let’s not forget that in finances a mild mistake can provoke avalanche-like repercussions.
Excellence in this area means no mistakes, accurate information at every stage of a process, effective internal controls, and accurate reporting. To achieve this, ‘lean’ up your financial process with these useful tips:
Map your processes
A well-structured process is at the core of running accurate and streamlined processes. Map and document how every financial process works so that your department has visibility into how processes work and why. For instance, when mapping your accounts payable process, write down how the invoices are received, how it is decided which employee will make the payment, when and how 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 about how to map your processes, check out these useful resources:
Automate repetitive tasks
Automating operational and administrative tasks has so many benefits, and an investment in proper tools can pay off very quickly. Here are four key ways how:
1. 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.
2. The work will be completed in a shorter cycle, so you won’t risk delays in payments or contracts.
3. There is less risk of human error since automation is less likely to make a mistake than a human is.
4. You can optimize the use of your resources – time, money, people, and supplies – so the entire company works better, and eventually, delivers more value to the final customer.
There are many ways you can implement process automation in your finance departments, from simple solutions (such as programming an automatic email) to more complex ones (such as using robotic process automation). Evaluate your options to see which types of automation work best for your goals.
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Centralize your information
Financial departments deal with tons of information: requests, charts, suppliers, invoices, receipts, and more. If your existing process requires you to spend hours searching for information across various systems, documents, and email threads, your process is not efficient and it’s surely not lean.
Besides this being a waste of time, decentralized information is also a problem if different members of the team don’t have access to all the documents, or if someone’s absence at work one day prevents the work from continuing.
Centralizing your information into a single source of truth means teams have more visibility into processes, and information flows across various systems seamlessly and accurately by integrating your processes and existing tech stack with process management software like Pipefy.
Get ‘lean’ with Pipefy
Manual processes cause delays and can lead to error-prone or misinformed processes. So while a single mistake may not seem like a big problem now, these minor mistakes can lead to big financial issues that can impact a company’s bottom line when consistently repeated across various processes.
That’s why in order to get ‘lean,’ it’s essential to start using a process management tool that allows you to quickly find information by accurately collecting what’s needed at the start of a process, provides your teams with visibility into tasks status, assignees, and deadlines, and automates repetitive and time-consuming manual tasks.
These benefits eliminate process waste and free up your teams to work on more strategic and value-adding tasks, like strategic sourcing, preventing fraud, or identifying process improvements, to save money, reduce waste, and improve process efficiency.
and say hello to a seamless and centralized end-to-end operation
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