Adding Value in Financial Control

If you currently or have ever worked in a financial control team, you will be all too familiar with the recurring directive to focus on 'value-add items, not just compliance.' This is a challenging proposition as compliance is often the main role of a financial control team, so trying to balance the demands of delivering strategic insights while still maintaining rigorous control and compliance standards can be complex. 

The below is an introduction to how financial control teams can actually integrate value-adding items into their day-to-day processes to add value without sacrificing control.

A cornerstone of the financial control function lies in establishing trust in the financial information presented. The ability to consistently produce accurate underlying information month after month creates an environment where the entire business can confidently rely on the presented numbers, without ever having to question the information, but instead use it to make decisions. This not only ensures the integrity of a company's financial data but also empowers executive teams to make informed decisions promptly, eliminating the need for time-consuming rechecks or delays caused by doubt in the figures presented. The removal of doubt is the true value proposition, enabling the organization to operate with certainty.

Central to an effective financial control function is the ability to assert, without hesitation, that the company is fully compliant and on track for future obligations. Instantly providing this assurance, especially during impromptu inquiries, enhances the perceived reliability of the financial control function. However, this assurance is only the first step; the second step is not just confirming that the company is compliant, but also letting those who may be impacted know about future upcoming obligations or how their actions may impact these obligations. As the company grows, so does the complexity of compliance obligations, necessitating a robust system to track and report on them effectively, and sorry to say, but Excel will not cut it. If you really want to add value, you need the systems in place to help you do your job accurately. We here at Easy Month End specialize in helping you track all your obligations and providing auditable evidence of compliance.

Navigating the intricate landscape of financial data is a perpetual challenge for financial controllers. The task involves condensing thousands of transactions, manual adjustments, and estimates into concise reports. The true value delivered by a financial control team is often behind the scenes; it is not the final glossy presentation but the meticulous structuring of source data that feeds the report. An effective General Ledger (GL) structure is critical, facilitating reporting without necessitating a deep dive into individual transactions. This disaggregated information not only streamlines reporting but also addresses inevitable follow-up questions efficiently. So adding value comes right at the beginning by understanding the information that is important to the company and then ensuring that financial transactions are structured in such a way as to ensure that this information is then available to the company without them having to first decipher complex accounting standards or manually group individual transactions themselves.

In the life of a financial control team, no monthly finance report is complete without the inevitable follow-up questions. The speed at which these queries are addressed is a significant area in which the financial control team can add value. Being the team closest to and actually working with the underlying financial information, maintaining tidy working files is more important than you may realise. More often than not, these follow-up questions can be easily answered by simply checking your month-end working files or balance sheet reconciliations. The goal is to ensure that anyone can open these workbooks and decipher the information seamlessly. Trying to predict and pre-answer every possible question is not only impractical but will also drive your team mad, so simply having your month-end documents and reconciliations with all the supporting information ready to go will achieve the same result with less time investment and stress.

A primary function of the financial control team is the month-end close process, ensuring that all financial data for the month is correct and ready for reporting. To truly add value to an organization, this process needs to be quick, efficient, and materially accurate. Outdated information is of no use to anyone, neither is inaccurate data. Utilising specialised software, such as Easy Month End, designed to manage the close process ensures optimal efficiency. Cutting down on the time it takes to close each month-end without sacrificing accuracy is one of the best things a financial control team can do to really add value to their company.

In small to medium-sized companies, the financial control team will often also double as the treasury team with responsibility for managing the company's cash reserves. This area provides a tangible opportunity to calculate the added value in real terms, such as additional interest income earned. Implementing a clear process for monthly cash flow forecasting, investing surplus cash, and strategically setting maturity dates can significantly enhance financial outcomes and prove why the financial control team is not just a cost center.

While the Financial Planning and Analysis (FP&A) team excels in actual-to-budget analysis, the financial control team typically handles month-on-month or year-on-year comparisons. Ensuring that month-end workbooks are not only clear but also easily accessible allows for efficient variance analysis, supporting strategic decision-making. The key is to prepare workbooks and reconciliations with the assumption that someone else may need to pick them up, easily comprehend them, and then determine drivers of change from them. This approach ensures that information can be obtained by the financial controller or other senior members of the team without having to add unnecessary layers to the process. This is one area in particular where having a clear month-end process and workbooks can double as both compliance and value add.

Embracing a culture of continuous improvement ensures adaptability to evolving business needs. The financial control team should constantly evaluate processes, seeking opportunities to enhance efficiency and add value. This is where the culture of the team is essential. By ensuring all team members are encouraged to simplify processes or raise suggestions in a healthy team environment. The people closest to the workbooks and processes being improved will more often than not have the best insights into how they can be improved.

The above is not an exhaustive list of how the financial control team can add value. However, as a seasoned Financial Controller, I truly believe that the financial control team is often under-appreciated and misunderstood. So, the next time you are questioned on the value-add proposition of the financial control team, I hope this helps you direct and educate the relevant people on how our function adds value to the company. If you would like to know more about how Easy Month End can help your financial control team unlock their value-adding potential, then reach out to us