Eliminate these non-value added activities in finance
A typical employee spends 60 hours every month doing repetitive, non-value added tasks that can easily be automated. This certainly applies to finance departments, which involve a lot of manual tasks that eat up valuable time and are ripe for process improvement. We tend to assume that every task we perform is essential in sustaining operations. But after analysing, we might be surprised to discover that many of our activities are actually costing the organization time and money.
CFOs and other finance leaders are looking for ways to meet the growing demands being placed upon their teams. Management and stakeholders are demanding more reliable, up to date numbers and accurate forecasting. Externally, suppliers want to be paid on time and auditors and regulators are demanding more detailed information.
Before accepting that your current processes are “good enough,” consider the true impact of wasting valuable time and effort on non-value added activities. Understanding frequency and root cause of inefficiencies will lead to the greatest breakthroughs for your finance department.
Probably one of the most important tasks for finance teams is reporting but on average they spend one day per week preparing reports which results in being a non-value added activity due to the time it takes to manually collect information, reconciliation, and formatting of data for various reports. In addition, the accumulation of information from spreadsheets leads to the multiplication of inaccurate, redundant, missing, unavailable, unknown or obsolete data and consequently a lack of reporting reliability. Time is spent creating and reviewing reports instead of delivering critical information. It is essential to standardize reporting processes and adopt a tool to centralize all your data.
In the digital age, while there is a plethora of communication channels, it is hard to believe that finance participate in non-value added activities such as hunting and transmitting information from various departments. Overloaded email inboxes, constant phone calls, meetings ... all means of communication that have the capacity to absorb integral hours of the day. To be truly effective and keep track of your conversations, a collaboration portal needs to be implemented.
Searching for documents
A survey from Wakefield Research found that more than 50% of office pros spend more time searching for files than on work. This nonvalue added activity of constantly searching for documents during the workday is wasting time and reducing employee productivity. Whether they’re stored digitally under the wrong file name or placed in file cabinets you need to find an efficient way to centralize everything digitally so important documents can be found in a timely manner.
The non-value added activity of chasing down approvals includes identifying the approver with authorization and sending out not one but usually multiple email reminders. With an automated system you can create a workflow so that these types of documents are always sent to the right person and ensure that the version displayed is always the most recent. Saving you time and costly errors if you were to have countless overlapping versions of the same document.
Gathering, collecting and validating data
According to a new report, The State of Payment Operations 2021, 84% of finance leaders grapple with unnecessary problems, such as slow payments, payment failures, and errors in data quality. If your data is siloed, otherwise difficult to access, riddled with errors, or not as comprehensive as necessary, there’s a variety of ways the finance department is susceptible to time loss.
Your data needs to be analyzed, edited, and presented quickly to leaders, managers, and other stakeholders quickly and often so that the right decisions can be made in the right amount of time. Most generally, if your data isn’t up to par, then there’s a good chance that managers are either making poor decisions or taking too long to make decisions.
If your data access isn’t conducive to today’s fast-paced corporate environment, then it’s likely your company is losing valuable time trying to find it and extract it. Experienced finance professionals should be developing plans and strategies, not tackling routine data management that is non-value adding. Automation tools will help free finance team members from repetitive and often boring data capture and processing work to enable them to fulfil a knowledge worker role that adds value to the business and improves business performance. The tools will deliver the same outcomes in a quicker and cheaper way of working.
Use technology to add value and transform the finance function
To deliver greater value in the longer term, investments in technology should be considered. For example, rebate management software can result in the existing process being streamlined and collaboration enhanced. All your rebate data can be analysed, and reports produced that help you assess cash flow, profitability, and growth. This leaves finance well placed to help them prepare for the future without spending too much time looking to the past. By simply reducing the complexity of the rebate management process, finance time is released back to value-added activities.