Are they up to it?

10 Questions To Assess the Performance of Your Finance Function

You’ve decided that you want to improve the performance of your finance team but where do you start? To work out how to improve anything, you need to start by working out how well it is performing now. The answers to the following questions will indicate how things are in your finance function and what changes need to be made. Most of the questions can be answered on a 10 point scale from 0 = not at all to 10 = Very much so or often.

Who do you ask? As many people or stakeholders as you can who rely on or work in the finance function.

  1. How clearly can you demonstrate that there is sufficient funding in place for the future? The time period to look at depends on the environment that the organisation operates in. I normally ask the team to consider 2 timescales: 3 months and 12 months.
  1. How long does it take to issue management accounts each month? Answers can range from we don’t produce management accounts each month to we get them out in less than 5 days from month-end.
  1. How clearly are the main risks that impact on financial performance a) understood and b) controlled? The speed and consistency of responses to this question reveals a lot. If answers are woolly and inconsistent, it shows that there is work to do in this area, which should always be a high priority for the finance team.
  1. How confident are you in the accuracy of the information that is produced by the finance function? People can just be asked to give a gut-feel or more objective measures can be used like the % of the balance sheet accounts that are reconciled each month or the number of correcting adjustments to accounts that are needed after information is issued.
  1. In what way is the performance of the finance function measured and tracked over time? Measures may vary from stakeholder satisfaction surveys to efficiency and accuracy measures. A lack of any measures suggests that managing performance is not a priority.
  1. What score would you give the culture of the finance function? If people want guidance on what this means this might help: 0 = depressed, backward-looking, disengaged; 10 = energetic, dynamic, highly engaged & open to do what it takes to help the organisation succeed.
  1. How often does the finance team take time out to learn and make improvements to what it does? 0 = never; 10 = frequently and positively.
  1. How well integrated are the finance team into the organisation’s strategy-setting and decision-making processes? Try to understand this at a board level and below. A lot of this is down to assessment of soft skills, chemistry and body language.
  1. How do you rate the knowledge of the finance team about the IT tools and techniques that are relevant to what they do? Competence in IT is a core capability that every finance function that wants to excel needs to master.
  1. How aware are the finance team of the need for good fraud prevention and cyber-security measures in this day and age? I pick this out as it is such a major risk to all organisations which can have catastrophic results if poorly managed.

This list is not comprehensive. I have a much longer and in-depth set of questions that I use when doing a full review of a finance function ahead of a transformation programme. It is, however, a good starting point that, in the space of an hour, can give a clear indication of strengths and weaknesses, give pointers where to dig further and where to make improvements.

Bellevue Partners helps organisations build better finance functions. If you would like a conversation about your business or not-for-profit organisation please get in touch.