There is an inherent risk within companies to be reactive instead of proactive, with looming deadlines and staffing pressures – it is tempting to stick with what works, or what has worked in the past. However, this viewpoint invariably fails eventually; the person who designed the spreadsheet has left the company, a minor error made months ago has been rolled forward, or simply the task is in dire need of simplification.
These issues when left unchecked generally lead to three failures;
A lack of sufficient documentation;
Unnecessary delays to processes; or
An increased risk of error.
So, how should you approach mitigating this through continuous improvement?
1. Create a list
Many financial professionals will already have a list (or mess of post-it notes) of things to fix or clean up, dream items, or things that keep you up at night.
If you don’t – then start an excel workbook, spend some time thinking about what could be improved or what processes cause you one (or multiple) of the three failures above.
The best time to do this is often after an audit, transaction, or close, where a review of your performance can identify areas where changes can be made. Often your auditors will also provide feedback, which can be an excellent source of sore points.
2. Assign priority
There are two important categories when assigning priority:
Importance: How significant to the company is this item? Create a scale whereby (for example) 1 would be something that might be nice to have (e.g. more aesthetic reporting), and 10 is mission-critical and must be fixed with urgency (e.g. creating a policy for a new Accounting Standard with a fast approaching effective date).
Difficulty: How difficult is this item to complete? This category is more often than not ignored, but it is vital to the ordering of your list. Again, create a scale whereby (for example) 1 would be something that can be done within an hour or so (e.g. aesthetic reporting), and 10 could take weeks/months (e.g. the implementation of a new ERP system).
Once you have assigned a ranking to each item on your list, you can combine the two to create your ultimate priority, which ideally has the highest ranked item being a mix between the easiest jobs with the biggest impact (i.e. if you have an easy/quick task that you have identified to have a large impact on the company – it should be at the top of your list and completed as soon as possible).
3. Create accountability
Lists are all well and good, but without accountability, there is less impetus to actually get things done. To guard against this, items should be allocated to individuals responsible for completing the task, and a manager responsible for overseeing and reviewing the task.
A realistic due date should also be included. Don’t make it too aspirational, or it will instead act as a demotivator (“we’re never going to hit that date – so who cares”).
Your final product may look something like this:
4. Continue creating the list
If the aim of the game is continuous improvement, then the ultimate goal is to never truly finish. Include an agenda-item for your management/staff meetings to discuss it each month, and continue the cycle anew.
The final unofficial step is to reward success. As time goes on – even the minor improvements your team makes will hopefully result in better reporting, cleaner audits, and simplified processes (which comes with it, not just a better work environment, but cost savings). So, it is important to provide positive feedback and financial rewards to ensure motivation remains high and the company continues to improve.
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This guide has been produced by DYLA.
Liability limited by a scheme approved under Professional Standards Legislation.
If your finance team requires assistance or you require more information, please contact: enquiries@dyladvisory.com
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