If your finance and accounting processes are streamlined, your department’s workload is predictable, and your company’s business landscape is stable, your team might have time to focus on optimizing departmental efficiency and productivity. In reality though, many finance and accounting teams are stretched too thin or are simply too busy to add efficiency improvement to their “to do” list.
But efficiency begets a highly functioning team and can help an overworked department regain balance. For this reason, we’ve created the following ideas so you can prioritize opportunities with the most potential to improve team efficiency and productivity. And with a prioritized list, you can tackle the easiest solutions first and work your way toward those that are more complicated or time consuming.
Finding Opportunities to Boost Efficiency
Manual Data Entry and Processing
Entering data by hand is still common practice for many accounting teams handling invoicing, expense tracking, and reconciliations. Manual entry can sometimes seem like the fastest and easiest way to get data into the system, but manual processes are prone to human error and can lead to incomplete or inaccurate financial records. This is especially true if there are inconsistent data entry processes or data silos across the organization. Additionally, mistakes require employees to spend valuable time on data validation to identify and rectify inaccuracies.
Leveraging technology solutions that automate common and repetitive tasks can improve accuracy and allow your team to redirect efforts toward more pressing or strategic activities that require critical thinking and analysis. Compare the features of different data entry systems to see which are most effective for your team.
Additionally, cloud-based accounting software can significantly improve efficiency by offering real-time access to financial data, facilitating collaboration among team members, and enabling smoother integration with other systems. With cloud-based solutions, your financial information can be updated and shared immediately to reduce delays and improve decision-making.
Standardized Processes and System Integrations
When accounting processes or data sharing procedures vary throughout the organization, it’s easy for teams to duplicate work or produce incompatible information. These blockers take time to resolve and can cause frustration, especially when employees must work around outdated legacy systems that don’t integrate with each other or more current systems.
To begin standardizing accounting processes, start by mapping out existing processes and identifying bottlenecks or inefficiencies. You can then establish clear guidelines, templates, and checklists to ensure tasks are performed consistently, which will reduce errors and minimize the need for reworks. Documenting and sharing best practices also fosters knowledge sharing and promotes continuous improvement.
Managing financial documents, such as invoices, receipts, and contracts, can be daunting, especially for larger organizations. The absence of a centralized document management system can lead to delays in processing and difficulties in retrieving critical information.
Consider implementing a robust system that allows for easy storage, retrieval, and sharing of financial documents. Review popular software solutions and look for those that ensure quick access to data, reduce the risk of misplacing important documents, and can provide a big boost to overall efficiency.
Like several other processes, manual expense tracking, approvals, and reimbursement procedures are time-consuming and can generate errors.
Adopting an expense management system that automates expense tracking, approval workflows, and reimbursement workflows improve efficiency and provide better control over company expenses. Clear expense policies and regular audits further ensure compliance and cost control.
Reconciliation and Closing Processes
As every accounting team knows, month and year-end financial closing processes, including reconciliations, can be incredibly time consuming, resource intensive, and prone to errors if performed by hand. Delays in closing the books and reconciling accounts also hinder financial decision-making and impact financial statement accuracy.
To improve and expedite these periodic processes, investigate specialized financial close management software. Automated reconciliations and streamlined closings reduce time pressures and enhance accuracy.
Setting aside time to share functional knowledge is a great way to build a back-up plan and ensure team members communicate the nuances that make specific tasks move along more quickly and accurately. Proactive training also prevents unclear directions or ambiguous expectations that often occur during workload handoffs. Knowledge sharing also minimizes missed details that cause inaccurate financial reporting.
Through cross-training, team members in different areas of the department can improve their flexibility and collaborate more effectively. And when employees have more confidence about handling responsibilities outside of their area of expertise, they are more likely to successfully manage workload fluctuations and employee absences so critical processes continue to flow smoothly.
Overreliance on Spreadsheets
While spreadsheets are versatile and widely used, they can become a source of inefficiency when teams rely on them for complex financial processes. Large and interconnected spreadsheets are susceptible to errors, version control issues, and can be time-consuming to manage.
While spreadsheets are absolutely useful for certain tasks, consider adopting specialized accounting software with more sophisticated functionalities. Numerous platforms are available that provide better data control, reduce the risk of errors, and offer more advanced reporting and analysis capabilities.
Compliance and Regulatory Challenges
Efficiency in finance and accounting teams goes hand in hand with building strong internal controls and compliance measures. Robust control systems mitigate the risk of fraud, errors, and financial misstatements, all of which impact team workload and productivity.
Strive to establish a checklist of internal controls, such as segregation of duties, authorization procedures, and periodic reviews. These measures help ensure that financial processes are executed accurately and remain in compliance with regulatory requirements. Regular audits and assessments help identify gaps or weaknesses in controls, provide time for remediation, and promote continuous improvement.
Communication and Collaboration
Efficient communication and collaboration are key to helping finance and accounting teams run smoothly. By implementing effective communication channels and encouraging collaboration, teams can streamline information flow and facilitate faster decision-making processes.
Multitudes of project management tools, collaboration platforms, and instant messaging applications can enable seamless communication and provide a centralized hub for sharing information and updates. Regular team meetings, both virtual and in-person, can foster a sense of belonging and ensure everyone is aligned towards common goals.
Continuous Training and Development
By keeping up with the latest industry trends, regulations, and technological advancements, your employees are better prepared for today's fast-paced work environment.
Consider providing regular training sessions or offering access to online courses to help team members acquire new skills and stay updated with emerging practices. A well-trained and knowledgeable team is better equipped to handle complex tasks efficiently and contribute to the overall success of the organization.
A more efficient work environment helps your team meet the many challenges that impact their daily work. Finding and acting upon opportunities for efficiency has the power to improve productivity and enable finance and accounting professionals to better contribute to the long-term success of your organization.
To find out more or talk with a Nelson Connects finance and accounting hiring specialist, contact us today. We’re here to help!