Finance Processes and Reporting for SME’s and Startups
Improving Processes and Access to Information is key if you want to optimize time, resources and make informed business decisions within your SME or Startup. In this article, we'll break down the main steps involved in this process as well as key things to keep in mind along the way.
Main Objectives:
Streamline admin and operational tasks;
Provide the right information to the right stakeholder, at the right time;
Standardize reports across teams and subsidiaries.
Steps:
Make a list of your current processes and split them into different groups (by department, by recurrence and whether they happen across different functions or within a single one).
Sit down with the different teams to understand what financial information and KPI’s they would need in order to make informed business decisions, and at what periodicity.
Assign clear responsibilities to the teams and (re-)organize how things are done. That includes working on improving the use of your ERP or moving to a more powerful one, or even working on Excel files used to process information.
Set-up a calendar including due dates, people responsible and meetings.
Write-down those processes! It’ll make controlling much easier and your team will be able to go on holiday or transition to other positions without worrying about the fact that they are the only ones who know how certain things work within the company.
Control the accomplishment and fine-tune: there will probably be resistance to change from some collaborators and issues not anticipated beforehand. Following-up will ensure your efforts were not in vain.
Keep in mind:
Not everything has to be automatized: some processes are not very time consuming or are not of high importance. Establishing priorities and calculating ROI’s on automation will keep you focused on the main bottlenecks and ensure a smoother transformation.
Don’t over complexify your processes: some decisions need very precise information, whereas others can be made with approximations.
Different teams have different needs: whereas your Sales Team wants to know the amount of deals closed during the month, Logistics wants to know when those have to be shipped. It’s important to fulfill the needs of every team, understand how they connect with each other and to also keep an eye on the overall company: from purchase order to cash collection.
It’s an investment: you’ll probably need to invest time and money on new technologies and on training for your employees. However, those are usually investments that are rapidly paid off.
Improving processes is a never-ending process: it’s key to keep the teams involved in continuously improving how things are done within the company. It’ll keep them motivated and it’ll ensure the company stays efficient.
Results:
Better decision-making within the company, as the teams have the right data/information at their disposal in order to make the right business moves;
Improved comparability of metrics and results across subsidiaries: there is one source of the truth, and discrepancies are understood and assumed from the start;
Improved control and decreased risk of fraud and human errors;
Lower administrative costs.
Collaborators Involved:
The CFO and the Accounting Team: Bring in a view of the entire business and serve as “guardians” of the information (ensuring accuracy, fulfillment and standardization);
Operations (Sales, Production, Purchasing, Marketing, …): Communicate their needs in terms of information and on the main administrative bottlenecks;
IT: Implement technological solutions in order to streamline processes, provide easily-accessible information and minimize manual inputs.
Itamar Ahrenbeck is the CEO of YourExternalCFO, a swiss-based company that provides outsourcing services of financial management for SME's and Start-ups in Switzerland and Latin America.
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