The Need for Speed

One of the 5 key principles for operating a great finance function is SPEED. When your finance function provides information it should be doing this as quickly as possible with plenty of information available in real-time. There are 3 reasons why this is important:

1. Competition: More and more businesses are providing real-time management information about key performance indicators, such as stock levels or total staff time spent on a project. If your competitors can do it, then must you if you are going to keep up.

2. Faster decisions: A lot of accounting information is about the past. It lets managers know the current position of the business and how they got there. The quicker they can find this out, the faster they can make decisions about how to move things forward.

3. Efficiency: If you can get your month-end out of the way in less than 5 days (ideally in 2) then you free up your finance team to spend the rest of the month supporting the business in other valuable ways.

In order to be fast, your finance function should be operating:

• simple structures with simplified, flexible charts of accounts with as few account codes as possible.

• as accurately as time and risk require. In many cases, information does not need to be 100% accurate.

• in as well-informed a way as they can, understanding the reason that information is being provided.

If some of this does not make sense yet or you want to hear more, hang in there: I will expand on these thoughts in future posts.If you would like to talk to me about how your finance function can speed up please get in touch.