When is the right time to invest in the finance function?

As accountants, day-in day-out we challenge other parts of the business to justify investment and the response is often tied in with revenue generation or protection.

We all love ‘sweating assets’.  Driving more value than expected out of something, makes most of us happy.

But what happens when we turn the microscope on our own department?

In my experience the reality can often be that the Finance function gets put to the back of a very long queue and without a direct link to revenue the case for upgrade or investment really struggles.

So is it really a case of = IF( finance function = ain’t broke, don’t fix it, invest) ?

Well, this is an interesting one.  Let me ask you a couple of questions up front.

How many Finance functions do you know that are staffed to the appropriate level or even slightly over-staffed?  Answer: Errr….none.

How many Finance functions seem to be burning the midnight oil more often than not? Answer:  Almost all.

The reality is that the finance function will ‘make do’ with the systems, processes and reporting it has, as the business grows or changes, and will often just work harder and longer rather than upgrade the creaking platform.

At F1F9 there is an identifiable trend we have spotted.

More often than not when we meet a client that is looking for help in finance function transformation, we are introduced to a financial and management reporting suite that has been condemned as no longer fit for purpose, including a matrix of spreadsheets that are verging on out of control and burning a lot of time each month.

And most interestingly we are also meeting with a newly installed FD, FC or Head of Reporting.

The Finance function is only being invested in when its failures are severely hurting the business. And by that time there is often a new person in charge!

Did the incumbent run, jump or were they pushed?  Who knows?

So, when is the right time to invest in the finance function?

Now and regularly thereafter is my response.  It may just be the best thing you can do with respect to job security, and it will certainly help your team feel like the job is not overwhelming them.

If your finance function are consistently working over-extended hours, getting the numbers out each month but not having sufficient time to do the value-add analysis or reporting errors are occurring with any regularity then it’s probably a good sign that the situation is becoming urgent.

A good first step and a lot easier on the budget is to review the Excel-based element of the current financial reporting system and upgrade it to the appropriate standard.  If it’s built to a best practice standard such as FAST then future upgrades will be relatively quick and simple as well.