What are the goals of financial restructure?

A financial restructure is not a simple and easy thing to do, as with most things in business. Therefore, it is important to make sure you take time to think about your goals for undertaking one. Once you have your goals in place, you can then apply Key Performance Indicators (KPI’s) to allow you to measure the success of what you have done.

Some may think that financial gain is the main reason to restructure, allowing you to replace salaries with systems/outsource solutions or expensive desktop software with subscription-based systems, and yes it can be a result. In our experience though, although financial game is an important reason for undertaking a restructure, it shouldn’t be the only goal or benefit.

In the same way an effective finance function is a blend of three key things, there can be three major goals and benefits of a financial restructure:

Insights

The main goal of a financial restructure is the output. For example, all stakeholders are able to gain the financial insights they need to make decisions and run the business.

Data

Data is a key output – when you make any changes it is a really good idea to understand how the data can be used and then how it is best to capture it.

Work life balance

Work life balance is another positive gain. We have seen a director save hours of bookkeeping at the weekend, meaning they are able to go out and sell more, by outsourcing to FC – it can be very powerful.

What are the risks that come with restructuring your finance team? 

Ensure research and planning is thorough at the start of any change project to ensure the right decision is made and that costly (£ and hours) mistakes are not made.

With any change there is risk of losing employees. This can be good or bad. If there are people you want to keep, this can be managed if communications are open and explain the reason why changes are been made and how it benefits them. Some people are worried about learning new systems, but showing that full training and support is at hand can give comfort and confidence.

To reduce the downtime for the finance team in issuing invoices/collecting debts/hitting deadlines, you must plan out a timeframe for things to occur to ensure there is little to no disruption. It is key to ensure the right resource is there to support any changes. If it will cause additional work, then look to find extra resource and deploy appropriately.

There could be costs attributed to changing systems, but this needs to be reviewed as a cost benefit exercise – however knowing these costs is easy to confirm, what impacts these I refer to the planning stage in terms of a timeframe and sticking to it.

In terms of a simple move from a desktop software to a cloud based, this can be a very quick process – allowing a comfortable 2 days to transfer and further 1 to 2 days training with ongoing support. Where this becomes a longer process is where there are existing systems need to be connected and a native API is not available or where a new system, such as when a CRM or project management tool is required. We have lots of experience through our App Advisory Service in not only researching the best solution, but also managing the implementation on your behalf if needed!

A restructure may seem a scary thing to think about or a major project to undertake. But it is business critical to ensure that any finance team is working effectively and producing the right outputs in a timely and efficient manner. There is no point having a sales team bringing in £000’s of work if things aren’t invoiced, monies are not collected, or you are selling to the wrong type of client. Turnover is vanity, profit is sanity. Therefore, you need that data to know who to sell to and what.

A poor finance team can be detrimental to business, but an effective one can be the platform for endless opportunities. No matter the size of finance function it is wise to get good practises in place from day one ready for future growth. So, make sure you regularly review the processes, the people, and the systems in your business.

If you are thinking about a financial restructure, why not contact us today to see how we can help you set goals and avoid any potential risks.