1. Improving your finance function
Kate Sayer and Vivien Ma
15 September 2016

2. Four steps to improvement
Diagnose
Plan Do
Monitor

3. Common challenges

4. Where does the time go? How do you spend your time?
Think about your own work – what steals your time?
Think about your whole team – what are the things that take up their time?

5. Where does the time go? Importance Urgency VAT review Budget
Preparation for audit
Board papers
Data protection
Processing payroll
New chart of accounts
Recruiting new finance officer
VAT return
Urgency
Processing Gift Aid
Payment run
Transferring surplus cash to treasury account
Checking new contracts
Investigate wrong postings in management accounts

6. Work of the finance function
Decision support
Control
Reporting
Transaction processing
Transaction processing – essential, but work we want to achieve as efficiently as possible. It is important to try to find ways of reducing the time taken and cutting out unnecessary aspects. So consider a review of processes, standardising and better use of electronic processes.
Reporting – needs to be useful and relevant to managers and support them in their work. We can also reduce the time spent on producing regular reports by improving transaction processing so that reports are produced straight from the system. Managers should also be able to access information themselves and obtain tailored reports.
Control activities - essential work to ensure compliance with regulatory requirements and activities to manage risks. Here we are balancing the risks against the cost of control activities, but need to ensure that adequate controls are in place to ensure completeness and accuracy of records, as well as the prevention of errors and fraud.
Decision support – work on information and analysis that helps the organisation to make good decisions adds value. It is easy to ignore this area of work in the short-term, but it damages the longer-term future success of the organisation.

7. Diagnose Understand where your time goes Get feedback from others
Run a survey
Talk to team leaders
Ask your boss and trustees ‘what’s important to them’
Establish a baseline
Number of transactions and efficiency
Satisfaction levels from survey

8. Diagnose Delegation Software upgrade vs change Identify training needs
Beware of segregation of duties and line of authority
Software upgrade vs change
Identify training needs
Can we do things differently?

9. Transaction processing
Remove the need to re-key data
Scan documents – e.g. purchases
Make it easy for others to get it right first time
Simplify the nominal ledger – more codes just creates more work everywhere
Simplify and standardise
Consider outsourcing

10. Processing transactions Membership fulfilment
Outsourcing
Processing transactions
Whole functions
Service
Membership fulfilment
Finance function
Payroll
Reasons to outsource
Cost savings or at least fix the costs
Transfer risk
Improvement in service
Access to specialised skills and equipment
Manage peaks and troughs in workload
Thinking about outsourcing
Clarify your objectives
What problem are you trying to resolve?
Will outsourcing solve the problem?
Consider where the activity is along the spectrum – where do you have skill gaps?
A spectrum – and you can decide where along this spectrum it is appropriate to be, and it may be different for different services.
At the end – whole functions – we are saying here that the outsourced function does form part of management and does engage in management decisions.
At the transactions end of this spectrum, there is no involvement in decision-making, but simply the execution of tasks.

11. Reporting Focus on relevant information Spreadsheets – pro or con?
What do managers need quickly and regularly?
Tailor more to their needs
Relate to their responsibilities
What happens if you stop producing a report?
Spreadsheets – pro or con?
Speed vs. accuracy

12. Control Look at your controls – what risk are they managing?
Re-visit authorisation checks – change to test checking
Manage by exception – don’t overcheck because of the 1% who get it wrong – work on the assumption that people will try and then crack down on offenders
Controls – we often just carry on doing something without thinking about the risk that we are managing. So – think of some control activities – e.g. salaries reconciliation, bank reconciliation, reconciliation between database and nominal ledger for donations income. What’s the risk?
Test checking – think about something like expense claims – low value, risk of errors high but each error will probably be low value – so overall risk?
Combine with internal audit – visit off-site centres – gain overall assurance

13. Staffing issues Performance Review roles and responsibilities
One to one
Feedback
Appraisal
Review roles and responsibilities
Clear job descriptions
New roles vs restructuring
HR may need to be involved

14. Plan Involve your team Make it visual – communicate to others too
Workshop or awayday
Goals, reality, options, way forward
Make it visual – communicate to others too
Prioritise things that are important to internal customers
Set clear goals and action plan

15. Where do you want to make improvements?
Discuss the areas to improve
What are your goals?
What are the obstacles?
Where to start?

16. Plan Research Discussions with HR Systems changes
New software or upgrade
Outsourcing
Cost vs benefits
Discussions with HR

17. Do Execute action plan Clear communication
Project manage system changes/ outsourcing
Develop performance measurements
Restructuring/rescruitment

18. Monitor Collate feedback for new ways of working
Regular review on action plan

19. Transaction processing
Goals
Decision support
Control
Reporting
Transaction processing
Work on information and analysis that helps the organisation to make good decisions
Essential work to ensure compliance and manage risks. Balance risks against the cost of compliance.
Relevant to managers. Reduce time spent by producing reports straight from the system. Managers access information themselves.
Essential, but work we want to achieve as efficiently as possible
Transaction processing – essential, but work we want to achieve as efficiently as possible. It is important to try to find ways of reducing the time taken and cutting out unnecessary aspects. So consider a review of processes, standardising and better use of electronic processes.
Reporting – needs to be useful and relevant to managers and support them in their work. We can also reduce the time spent on producing regular reports by improving transaction processing so that reports are produced straight from the system. Managers should also be able to access information themselves and obtain tailored reports.
Control activities - essential work to ensure compliance with regulatory requirements and activities to manage risks. Here we are balancing the risks against the cost of control activities, but need to ensure that adequate controls are in place to ensure completeness and accuracy of records, as well as the prevention of errors and fraud.
Decision support – work on information and analysis that helps the organisation to make good decisions adds value. It is easy to ignore this area of work in the short-term, but it damages the longer-term future success of the organisation.