Finance Friday: How to turn a cruise ship into a speedboat
Thoughts on becoming a more efficient finance function.
Photo: Matthew Needham
Look at it.
The cruise ship.
It’s big.
It dwarfs the tug boats, let alone a speedboat.
It’s difficult to stop and it’s difficult to turn. Hence the need for the tug boats.
Is your Finance Team a cruise ship or a speedboat?
I’ve never yet a Finance team that wasn’t busy.
With month end, payment runs, cash flow forecasting, monthly/weekly reporting, investment cases, budgeting/forecasting…. the list goes on.
There’s so much to do.
And then you get a rush job.
An email with an deadline of 5pm.
Suddenly busy just got a whole load busier.
You need to find time so what do you do?
In most cases, it’s the meeting with your stakeholder 30 minutes from now that needs to get pushed back or rearranged to another day.
In busy times, the first thing that gets dropped in busy times is meeting with stakeholders.
So it’s not really surprising that:
The #1 reason finance teams fail to influence
“The number one reason for finance teams failing to influence stakeholders and make an impact is that finance teams are too bogged down in the day-to-day transactional activity.”
So the simple answer to increase influence and impact is to reduce the time spent on transactional activity to free up more time to spend on providing strategic advice and building relationships with stakeholders.
But how?
The finance conundrum
When you’re busy, in fact too busy, how the hell do you find time to make you less busy?
The first step is to look at where your time has a team is spent over the course of a month.
The way I like to look at it, is a month is around 20 working days.
Therefore, each day spent on represents 5% of the month.
Of course if you could trim a day a month off an activity (or group of activities), then over the course of a year, that would save you 2 and half weeks!
That’s almost 5 weeks in 2 years.
Now multiply that by the number of people in your team involved in that activity.
What’s the biggest time suck in finance?
When I first meet with organisations, I find closing the books at month end and producing the associated management reporting, takes up half of the month.
By the time meetings with cost centre managers or business unit heads have taken place, it’s time to start the process all over again.
All this time spent on historical information, you can’t do anything about.
But just imagine that something needed management action.
By the time management start to take action, it could be almost 2 months since the issue arose.
Which means that you’ve potentially incurred extra costs or lost out on opportunities.
Be a speedboat, not a cruise ship
If you’re on holiday taking a leisurely trip a cruise ship is the way to go.
If you’re in a rush and need to get somewhere quickly, a speedboat is much more agile and quicker to respond.
You need to think about how you can make your month end processes faster.
Because if your month end processes are slow and difficult to manoeuvre, like a cruise ship, then they are going to really slow down your ability to influence stakeholders.
Simply because by the time you’ve turned your cruise ship around, there’s not much space in the month left to get everything done before the next cycle starts.
So think about what you could do to make your month end process much quicker?