by Jon Repka
Fully optimized: Creating the most efficient financial team
When work is getting done on time and financial progress is strong, it can be easy for executive leadership to think the finance department is doing its best work. However, has your team truly achieved financial optimization?
For most, this is easier said than done. There is usually someone on the team—often the CFO—bearing a heavier workload as a result of an unoptimized financial department. In addition, financial mismanagement can result from a lack of clear policies or procedures. And while there is always room for improvement, a lack of financial optimization can be a roadblock to reaching the next level of business success.
Here, we’ll examine the typical barriers to optimization, what a truly optimized team looks like, and how to take that next step!
Barriers to optimization
Each finance department has unique opportunities and challenges as the team develops. However, some staffing inefficiencies—be it a lack of training or understaffed teams—can contribute to a lack of financial optimization.
Overburdening the CFO
For most financial organizations, the CFO is the most experienced team member with the highest level of expertise. While this quality lends itself to a leadership position, it can also create a situation where your most experienced employee—the CFO—is overburdened with the bulk of the complex projects.
This is a natural evolution as teams become busier and need to allocate the best resources to the most challenging work, but it can also be a barrier to financial optimization. If the finance team is not appropriately staffed or does not have the right resource, the CFO may struggle with delegation and end up performing financial modeling and analysis themselves. For example, if the CFO spends time handling complex financial modeling, less time and fewer resources are available to enact strategy based on that work. This allocation of time and work can lead to inefficiencies as the CFO becomes bogged down by day-to-day rather than big-picture tasks.
Ineffective governance and communication
Finance teams that do not have a clear set of policies and procedures may struggle to achieve financial optimization. The absence of a clear governance strategy can create a disconnect between the finance department and the rest of the organization, leading to confusion around financial policies.
Without coordinating how finance team roles interact within the department and the broader company, it is easy for projects to be mismanaged or for there to be confusion around workloads. This can put pressure on the CFO and other leadership to create organization that could be readily built around a governance structure.
Lack of engagement with technology
Even in a modern workplace, some organizations can struggle with technology adoption or be reluctant to leverage appropriate tools. This can be a large barrier to financial optimization as the right finance technology platforms can make work faster, easier, and more efficient.
Finance technology tools reduce human error and help team members work smarter, but without a strategy to leverage these tools, organizations can be caught flat-footed during busy financial seasons. In addition, having key resources that are resistant to adopting new technology can be a barrier to financial optimization and keep the organization from being as efficient as possible.
A fully optimized finance team
Financial optimization across the department allows each team member to work effectively within their role and within the scope of each project. This begins with proper training for the entire team. Ensuring your team is fully trained on financial operations, procedures, and technology allows each resource to operate most effectively.
Another essential component of financial optimization includes well-documented policies for financial management. By distributing and communicating these policies and procedures throughout both the finance department and the entire organization helps keep the team on the same page and drives efficiency.
Lastly, financial optimization is achieved by leveraging the full resources of the finance department. This means hiring the best team members across all roles—both entry and executive level—and assigning projects and roles that best align with skills and core competencies.
Who’s who on an optimized finance team
Hiring the right CFO to lead the finance department is essential for financial optimization. However, finding the best resources for roles across the department is equally important to create a well-optimized team and also to free up the CFO’s time to focus on big-picture activities.
This begins with hiring financial planning & analysis (FP&A) team members to leverage data into real solutions, and deliver highly customized models and quantitative analyses. Well-qualified FP&A resources equip finance departments to analyze business models, optimize budget forecasts and assess pricing strategies.
Next, accounting and bookkeeping resources help drive consistency and efficiency across the organization. Accurate accounting is the foundation of understanding a business’s financial health and helps inform all financial decision-making.
These roles are the backbone of any financial department and hold the key to financial optimization. With a CFO driving governance over these roles and promoting effective policies and procedures, the entire team can work toward their best performance.
Taking the next step toward optimization
With a clear picture of what financial optimization can look like, organizations can begin to take the first steps toward achieving this goal. For some teams this can mean putting more rigor around financial policies or team governance. For others, this may mean adding expertise to the department.
Paro has the experience and expertise to help you quickly staff up your finance department with the team members you need whether you’re searching for bookkeepers or analysts. Freelance resources can be a perfect solution to quickly bring support to an overburdened team. This can be a game changer for companies needing staff up their financial department with highly competent, flexible team members. By engaging these freelance resources for certain projects or busy financial seasons, your CFO can craft the necessary team to work toward financial optimization.
Reach out today and learn about partnership opportunities to take the next step with your finance team!