Improved Financial & Management Reporting

Background

Case StudyA small business unit within a bank had gone through a period of growth. To meet customer requirements, sales agreements had become more complex. There was pressure to reduce or eliminate costs. The existing accounting system had not had real resources invested in it for a number of years and was increasingly not fit for purpose.

It was not as automated as it might have been. The Finance Team itself was small in number and would remain so, which given the other background, meant the team were feeling a great deal of pressure. As a result, the financial reporting produced was too long, in addition to lacking sufficient quality analysis that would help management.

Challenge

The key challenge was to reduce the time taken to produce the accounts and monthly reports. Doing so would enable management to guide & develop the business more effectively. This was also dependent on the quality of the reports and the analysis they contained being improved. This in turn depended on automating some processes giving the team more time to prepare effective analysis as well as reducing the pressure on them.

Solutions

Sean’s first task, in working with the Finance Team, was to speak with management as to what exactly they needed from the monthly reporting process to take the business forward – key financial information, performance indicators & relevant advice from Finance.

Once this was done, he next mapped out the accounts & reporting process exactly as it was – not what the manuals said it should be. He then led the analysis and identification of blockage points leading to time delays, work that did not meet required standards and outdated or broken processes. Waste was self-evident & he eliminated several steps that had amounted to duplication, thus previously adding no value. Sean then led the Finance Team in redesigning and automating business processes to both reduce risk and improve quality.

This enabled Sean & the Finance Team to first sort low hanging fruit such as posting standardised journals mid-month rather than waiting until the month-end process had started. The team being small, he also ensured that whilst there were clear functional roles to be performed, that everyone could do everyone else’s job in the event of anyone’s absence by organising relevant training & detailed manuals.

The existing accounts software was upgraded, and a bespoke extra module added that enabled the team to import data in minutes rather than the previous hours.

To manage the sales complexity noted above, Sean designed an excel model capable of dealing with the issue. It also enabled a speedier processing of sales invoices by clients as the information they received was more transparent. This had a positive impact on cash flow as the review & approval process for them was easier.

A particular problem faced each month was accounting for staff travel & related business expenses with it normally taking half a day. Sean developed an excel model to record, analyse & prepare journals, reducing the time needed to no more than thirty minutes whereas previously three hours or more were required.

To help with improving the quality of analysis & reporting for management, Sean created a further excel file enabling the finance team to simply drop the figures in & create a dashboard of relevant information for management.

The final step in the process was to update all relevant procedures manuals. Part of this was some additional control checks to ensure that the new system stayed robust & delivered.

Benefits

The monthly reporting cycle was reduced by two full days, a very significant time saving. This gave management more visibility around the performance of the various business lines. This enabled them to manage the business more effectively as they could address issues sooner than would previously have been the case. This led to increased confidence about the underlying data, so the planning and development cycle became more robust.

The accounting system was upgraded & made more automated with only a small financial investment.

The Finance Team was not only involved in the entire project but based on the two benefits noted above, they became more engaged overall as they now were able to use their skills more effectively. This in turn led to a greater profile for them within the company.

EFM Expert: Sean Finn