Lean Finance Departments

I’m always suspicious when I start to work with a new client and there is an abundance of finance and accounting personnel. Or alternatively, when a finance chief complains about a lack of resources or time.

I’ve never thought that throwing bodies at a problem does much of anything other than build some finance chief’s fiefdom and increase corporate overhead costs. Unless the business is growing or entering new businesses or markets, finance departments should be looking for ways to be leaner.

Nowadays there are many ways to use technology to increase efficiency. Automating billing, collecting, and travel and entertainment are the low hanging fruit. Additionally, automating repetitive tasks will provide the added benefit of error reduction.

Further efficiencies can occur when companies are proactive about using the automation tools available in ERP packages. In fact my experience is that most companies use less than 50% of an ERP’s functionality.

A good finance group will find ways to do more with less; freeing themselves from repetitive tasks to provide more value added information. In fact, top performing finance groups run with less than half the cost and people as comparable median performance groups. See this article for more about shrinking finance groups.

photo credit: Teamwork and team spirit via photopin (license)

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