Are your financial processes and systems delivering value to your business?
In 1993 when we worked with The Guinness Trust to implement their new finance system (SunSystems) and integrate data from their housing management package the world seemed a very different place.
Demands on social landlords to provide information both internally and externally were less challenging and stringent. 18 years on in a redefined financial landscape demands for information have hit an all-time high whilst those same businesses are seeing budgets severely cut. ..... And then on top of that there is IFRS!
The social landlord's goal remains unchanged. For most it is maximising the potential for the delivery of quality affordable and sustainable housing. Therefore, it is easy to overlook how financial systems and processes play such an integral part in achieving this. If they are effective, financial processes help drive the business forward.
Minimising the Impact of Process Change is the Key to EffectivenessHousing managers are sure to know if customer satisfaction scores are falling, but what about finance processes? What are the warning signs when they start to fail? It may not be difficult to identify inefficient or rogue processes: Those which always seem to bring the department or some of its members to the edge of reason, those which always fail to meet deadline or those which appear to produce nothing. However, effective process change is vital.
The proactive finance executive ensures existing financial processes are constantly reviewed and evaluated, minimising disruption otherwise caused by major process change.
Equally, new processes like those designed for IFRS disclosure requirements need to be implemented and tested. In this example, processes for capture and delivery of new data or for the preparation of comparative results should be in place and fully understood by the finance team long before deadlines are reached.
Finance Services Value Proposition
Removing an unnecessary process may be easy; improving a process is the greater challenge. Quick fixes may be the solution to meet a short-term deadline, but the weaknesses remain. Understanding the links and inter-relationships between processes is crucial. Process change must be defined within the boundaries of the systems and other processes to which they relate or conversely system development is effected to accommodate the modified process(es).
Process change like any system it is linked to should be flexible, it should be scalable; if the business grows it does not become over-burdened, be owned; someone must know it is their responsibility; be measurable; by setting targets for delivery and it must have a timetable for review; what is effective for today's business may not be so for tomorrows.
Investing in financial processes and systems that keep pace with the needs of the business is the foundation to delivering service value. Commitment of management teams and committees to this goal is fundamental and the vision of the finance executive to put it into practice crucial.
Anthony Ross is a Fellow of the Chartered Institute of Certified Accountants
and Managing Director of Pearce Ross Limited
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