Entrepreneurial technology businesses are now in uncharted territory and experiencing a range of financial, HR and operational challenges as the coronavirus outbreak seeps into every aspect of operations. Often, it is only when a crisis occurs that ineffective and inefficient structures in the finance team and the finance function emerge and create issues.
In our latest blog, we explore how the deployment and management of a bloated finance team during a crisis can create protracted issues for even the most resilient of firms.
Estimated reading time: 2.5 minutes
If the past few weeks have taught business leaders anything, it is that the Coronavirus outbreak has tested the finance team to its absolute limits.
In such a catastrophic case, it is useful to consider an analogy of a fast-flowing river. When the supply of water is plentiful the river flows with relative ease, washing over obstacles easily. Similarly, during periods of economic and business growth, a business’ finance team tends to operate and perform with a similar level of apparent ease.
However, since the coronavirus outbreak, the once fast-flowing river has dramatically receded, boulders and obstacles rise above the water, and become increasingly treacherous to navigate slowing the progress of the water further. The once-plentiful supply of opportunities has been reduced to either an unpredictable stream of small opportunities or created a bottleneck in the pipeline.
For archaic and stale finance teams, the past few months have been challenging and fraught; ineffective and inefficient systems, processes and resources have emerged just like the boulders in our analogy.
Based on real-world conversations we have had with our clients; it is often the case when business activity declines that leaders can identify areas of inefficiencies within a finance function which are holding the business back.
Indicators of inefficiencies in the finance function
During a crisis or periods of lower business activity, leaders may notice the following:
- Long reporting cycles for management accounts, budgeting, financial modelling, and cash flow forecasting.
- Insufficient business data and analysis on which to make informed decisions.
- Legacy issues, such as outdated accounting systems, controls, and processes.
- Considerable resistance to change and a staunch reluctance to embrace time-saving innovations, such as SAAS based applications, time and expenses data capture software, optical character recognition technology, automated workflow and approval platforms and integrated banking systems.
- Minimal staff turnover within the finance team and a narrow focus on outdated systems leading to stagnation in the professional development of employees.
- Senior finance leaders working on tasks that can be completed more efficiently by junior resources. A lack of staff turnover means that there has been insufficient refreshing of the finance “gene pool” or rebasing of the cost of finance.
Having the right people in the right place at the right time
Despite the benefits of a mature finance team, it is essential to invest in the continued professional development of junior talent to ensure that there is an appropriate blend of expertise, innovation and vigour in the department.
Deploying the right people in the right place at the right time is essential to develop the abilities of the accounting and finance team. On the contrary, a stagnant department can often blur the responsibilities of resources in the team.
The current global pandemic has highlighted this issue and brought the importance of having a fit for purpose function into sharp focus. And not only fit for purpose but also value for money
How Isosceles can help
The capricious economic climate of late has changed the business landscape beyond recognition, government policy has altered accordingly, and innovations are continuing to disrupt the status quo.
At Isosceles, we review that paradigm and refresh the systems, processes, and people in the finance team to deliver value for money and knowledge of the latest new and novel accounting system innovation. We can step in on an interim or part-time basis and provide a refreshing perspective to facilitate change, so even at lower levels of activity businesses can thrive.
Our finance directors, financial controllers and wider accounting and finance team understand business drivers and create assessments to introduce new concepts and processes sensitively.
Due to the increasing need to continue to recruit bright talent during this unforeseen period of uncertainty, Isosceles now also has a well-established, virtual graduate recruitment process for finding, training and retaining the very best talent.