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Reducing Costs in the Finance Department Through Technology


Gregory Clarke on July 17, 2013 in Advice for Business Owners

I recently read an interesting report by Erik Dorr and Martijn Geerling about Taking Finance Transformation to the Next Level, and thought I would share some of their insights.

All companies strive to be cost-effective in their operations. Most focus on centralized processing to minimize costs in these operations including many finance functions such as invoicing, collections, purchasing and reporting, to name a few.

In most cases, costs for the Finance Department are a function of labour costs. Technology can play a critical role in reducing Finance Department costs by automating transaction-based processes and providing self-service functionality for low complexity activities. This can be a very cost-effective way to manage Finance Department costs. In this type of model, technology is focused on the following:

• automation of transactions to reduce manual labour costs;
• labour intensive processes (usually involving person to person communication) are prioritized by business value or risk to enhance value;
• information focused websites and portals to provide information to users versus call centres to respond to queries; and
• constant collection of data to aid in the production of monthly reporting.

Collection of data in this model assists with the performance measurement function in order to measure key performance indicators, satisfaction surveys, benchmarking, and/or balanced scorecards.

Even small companies can find enhancements through basic technology enablement. Use of the technology, reduces labour time which can be freed up for higher-level tasks holding more value for the organization.

Over my career, I've seen examples of wasted time where companies allow orders to come into the organization. Each is re-keyed into the system once, twice or even three times during the cycle versus having a seamless connection to transfer the order through the system.

In this era, it is critical to use technology effectively to enhance efficiencies and do more with less resources. This cannot only be achieved at the global company level but also at medium and small company levels. For a copy of the report referred to in this post, please contact me at .(JavaScript must be enabled to view this email address).  

I’m a member of the Intellectual Xchange Network or IXN, sponsored by SAP. IXN members are a select group of professionals, who through their research, writing and relationships are subject matter experts in their fields. As members of the IXN they provide insights, share ideas and help their readers and listeners become better informed on how they and their companies can improve. They are not paid nor are they spokespersons for SAP.