Our conversations uncovered three main challenges which can impede companies from optimising their finance function; these relate to:

1. Leadership
2. Technology
3. People

In this blog, we will explore how these challenges can impede a company’s growth and provide insights overcoming these to position the finance department to scale efficiently with the rest of the business.

Leadership – ineffective finance leadership impedes growth

Companies looking to scale their finance department require effective leadership, with the right multi-disciplinary skillset and experience to manage both the short-term and long-term challenges of a growing finance department. Lacking experience can lead to a reactive finance function that is stifling growth rather than driving it.

Strong leadership is a critical driver for:

• defining and implementing targeted strategic initiatives
• improving productivity and the quality of outputs
• retaining key resources.

How to address these challenges?

• Prioritise building an effective finance leadership who have prior experience managing and growing finance departments.
• Leverage a managed service provider with finance SME knowledge and experience to provide flexible and trusted resourcing augmentation while growing.

Technology - building on a bad foundation

Due to the focus being on product and sales, back-office functions, such as finance, are usually overlooked and lack investment. We see this resulting in:

(1) an IT infrastructure that is underdeveloped and/or not fit for purpose

(2) inefficient data models

(3) processes that rely heavily on manual intervention.

Common technology challenges include:

• Using unlinked databases and systems, which leads to complicated and cumbersome infrastructure that is expensive to manage
• Manual handling of files and databases increases the likelihood for errors and significantly impacts efficiency.

It’s essential that scaling companies build a strong foundation with a linked IT infrastructure and automated processes as early as possible to reduce the likelihood of issues compounding down the line.

How to address these challenges?

• Conduct an assessment to understand which parts of the finance department could benefit from automation and streamlining to increase value and reduce long-term costs.
• Develop short-term fixes and long-term plans to optimise finance’s IT infrastructure, by partnering with advisors with expertise in both finance and IT transformation to drive the system streamlining and process automation.
• Focus on creating a data architecture that consists of a golden source of data, which feeds directly into modules for financial accounting, reporting and planning.

People – difficulty in attracting and retaining talent

Qualified accountants and experienced finance professionals are expensive and scarce. This has led to the creation of a highly competitive market for onshore finance professionals. Navigating this market is time consuming, especially when looking to quickly hire a team.

Furthermore, it can be especially challenging for emerging brands to attract high-quality talent as they are often up against larger reputable corporations that offer stability and competitive packages. It is therefore also essential that, once hired, resources are retained.

How to address these challenges?

• Prioritise the recruitment strategy and develop brand awareness to attract skilled finance professionals with the right profiles.
• Ensure highly qualified finance staff are focussed on engaging, value-add activities and monotonous tasks are either automated or outsourced.
• Ensure they are targeting the right mix of outsource and in-house finance staff to maximise efficiency and minimise costs.

Building a strong and robust finance department that can scale with the business is a challenging process. However, by focusing on the above key areas, companies can set themselves up for success.