What are the biggest challenges in finance?

From our experience one of the biggest challenges in finance, and the most common reason a finance team is not effective, is because of the attitude “this is how we have always done it”.

This is not because people don’t have ideas or want change, they usually lack the confidence to question the current processes and/or don’t have the history to understand why something is done the way it is.

If it is not confidence, it could be a case of “if it’s not broke why fix it?” HOWEVER, this could be because they are not aware of all the amazing new software and the possibilities. It is surprising how many times we demo a simple app like Dext and get a reaction as if we have performed magic.

This is true of any sector, if a person is not keeping an eye on the changes around them, they can quickly be left behind. We have a high curiosity level at Farnell Clarke which the company was built on. As digital specialists we ensure that we know and can advise on the latest and best software for our clients and that promise is a core part of our company values.

We were once asked to quote for a business where the current in-house finance person was resigning. The business was on a desktop product with very manual processes. When a handover was completed and the question of “why is it done like that” was asked the answer every time was because that was what my predecessor did.

When we make a change to systems, we always want to know why things are done so that we do not miss anything vital/unique to the business.

From a full time 37.5 hour “job” we were able to reduce the actual processing time to 2 – 3 hours a week by some simple software changes that bought automation and reduced un-necessary admin.

There also leads to another big challenge – fear. Fear that if improvements are made what will happen to their jobs. Will the robots take over! They will not – they will allow them to provide more value, work on business rather than in it, give insights that aid business decisions or even provide capacity for growth.

What are the possible problems in finance department?

Absence: We have seen where if someone goes off sick or holiday the whole finance process grinds to a halt. It means that someone is not there if a client or supplier calls.

This is impacted even more if the accounts system is a desktop product where only the finance team/person has access whereas with a cloud system you can invite many people (with different access rights) allowing them to be able to resolve queries if required.

We have also seen that a business growth can be a challenge for the finance team if unknown opportunities/difficulties present themselves. For example, not everyone has had experience of solving a cashflow issues or indeed predicting one. It can be as simple as not having a network of support to know their options or where to start in terms of contacts to assist. We ensure at FC we have strong referral partners so that should it arise, we can confidently bring in specialists for advice.

We work with the CFO Centre who offer part time FD’s. This works so well for us because they can offer that strategy advice for business who are in difficulty or perhaps looking to sell.

Interestingly we have seen examples where business owners say things like “I don’t know why I cannot get the management information because of X” and they don’t know what X is. I.e. the finance team have made X an enigma. They also say things like “we have no idea how the business is doing because we don’t get timely accurate numbers”. But to work with the finance team can take time which usually business owners don’t have and it is very easy for a finance team to become a silo unit and insular.

If these challenges and issues sound familiar, why not contact us today to see how we can help you overcome them – don’t hesitate to get in touch with us today. Or you can read one of our outsourcing case studies to see how we have helped other companies overcome similar challenges.