Finance teams in middle market companies are in a position to provide their firms’ ownership with high quality, high value analysis and advice. To do this, the finance team needs to ensure its house is in order with regard to efficiency and quality, so they can serve their organizations in the most effective manner.
Focus on improving the overall effectiveness of your core activities to enable reliable data streams, uniform reporting standards, and optimized finance processes and technology infrastructure. You can then harness the resulting quality and efficiency gains to improve the range, timeliness, and integrity of your strategic business support. Lean finance involves simplifying, streamlining, and harmonizing essential finance processes to create a leaner, more efficient finance operation.
Reduced operational cost is only one goal of lean finance. It can also dramatically boost speed, flexibility, and quality across the finance function and enable finance teams to deliver services of greater range and value.
The first step in employing lean finance principles is to pinpoint where and how the finance function adds value. This requires reviewing all functional areas of the accounting/finance department, including transactional processing, budgeting, financial reporting, and control and decision support activities.
Lean finance project outcomes often include:
- Moving lower-end transaction processing work out of the finance function and concentrating these activities within shared and/or outsourced service providers
- Standardizing and automating routine procedures where possible to increase efficiency, reduce the potential for error, and improve quality
- Standardizing and streamlining finance function roles and responsibilities, processes, and controls
- Standardizing and streamlining data flows and underlying IT architecture to automate the transfer of data inputs and better integrate systems
Setting targets for adopting lean finance principles as part of your organization’s Total Quality Management (TQM) journey can enable you to build an effective platform for delivering timely and insightful financial advice to business owners and managers.
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