Benchmarking the Accounting and Finance Function
Within Finance & Accounting function, each organization slightly differs in the sub processes considered strategic. Recent investigation indicates that strategic procedures should be kept internal due to them being linked to the center actions of a firm, integral to the success of the Finance utility and connected to the delineation of the firm.
In certain firms, Finance and Account management is considered as a strategic activity, with the managing of cash flows, liquidity and funding in the firm branded as core. On the other hand, others would argue that once the rules and governing principles are resolute, the process is mainly transactional and can be migrated to a shared service centre.
Finance is the lifeblood of a firm and the data delivered by Finance represents the firm’s place and performance for a given period. To obtain this data, there are a number of inputs requisite from the overall business. This data includes sales order data, approvals for the dispensation of invoices, query declaration to decide expense queries, data on debts, accessing / sense inspection of budget, estimate, accumulation prepayment and journal voucher data. In assessing the extent, and firm needs to decide the level of interface that it wants common service centre to have with the rest of the business and how that input edges will be supervised.
To supply this data, there is a quantity of outputs to the rest of the business. This data includes management data to departments and leadership, approval exception accounts to the businesses for invoices and expenses, and critically the financial statements. In assessing the scope, and firm needs to believe the interface with the management and big business and how the output interfaces will be managed.
In considering the scope, one must review the risk eagerness of a firm. The size of the retained Finance team, and the processes and sub procedures that they will perform will be principally dependent on the risk that the firm is willing to take. Some firms decide large retained Finance teams, with a minute procedure scope migrating to the service center to reduce risk.
Nevertheless, this approach has a investments implication. Other techniques to minimize the risk and maximize the achievable return can include managing the change with a phased approach to migrating to a shared service center and spacing out the phases as much as is appropriate.
It is necessary to carry out an honest appraisal of what a firm does well and not so well. Benchmarking the Accounting and Finance studies are readily obtainable to provide a point of view of how the Finance role is performing against other Finance in an alike business.
Read More: Importance of Outsourcing the Finance and Accounting Services
Migrating activities to a shared service center is not only an occasion to improve the performance on the processes at which a firm is doing poorly but also on the processes where the firm is doing well but can do better. When bearing in mind which processes to move.
However, this must be unbiased with the objectives of the conversion and the risk factor of the Finance Function and the leadership of the firm.
Finance represents an intricate web of dependencies and interfaces between processes and subprocesses. One process cannot be drifted without considering the implication on the other processes. The benefits of end to end processes in one location are frequent and generally discussed; in Finance & Accounting it is effective to have General Accounting team in the same place as the Accounts Payable, Accounts Receivable and Reporting teams.
When considering the scope of the due consideration must be given to these relations and to make certain that the Finance & Accounting Transformation is a planned decision that considers the whole finance function and the respite the business.
In general, a balance technique should be hopeful in assessing the process range of a solution taking into thought all of the factors described over getting this incorrect can influence the achievement of any Finance & Accounting Transformation program.