Finance transformation engagements involve evaluating the current processes for recording financial information performed within the finance function. This also includes evaluating the processes involved in creating the financial reports, both internal and external reporting as well as those ad-hoc information requests which the finance function is expected to produce; usually in a quick and accurate manner.

One of the most critical components in measuring the efficiency and effectiveness of the flow of information is to look at the people that are recording these financial ledgers. Do they understand why they are doing what they do? Do they have a fundamental understanding of the business that they’re responsible for reporting? Does the finance leadership keep them apprised of the happenings going on in the company? Is there a mutual respect between the people in the department? Does the management have a high regard for their contribution?

By forging a relationship and getting to know the people engaged in the processes, there comes a better understanding of the impact that these processes have on them. Do they feel they are making a difference when doing their jobs? Do they feel they are a critical part of the process? What effect do ad hoc requests and/or reporting deadlines have on them?

Since processes begin in other areas of the company, it is also critical to understand the connection that they have with the people outside the department, evaluating how they receive the data they are to record and the essence of what the data means. Are they able to question what they receive and understand if there are variances which need to be highlighted? Is there open communication, do they have an open or guarded relationship with the people outside of their department? Are they comfortable asking questions of other departments? Do they feel like the “dumping ground”, always dealing with problems that other areas create?

Do they understand why certain transactions happen outside of the normal process? Do they understand the impact on the larger goal of what they produce and how it is important to the overall finance function? Are they proud of their work and their ability to handle the consequences of reporting the activities of the company leadership?

To achieve the most effective flow of information, leadership of the finance function needs to have an open communication dialogue with the people who record the financial information as an everyday practice, making certain that the organization’s goals are communicated and made evident in every transaction that is recorded. Asking the questions above can indicate whether there is effective leadership within the finance department and also whether there is effective inter-departmental communication. Both are critical to the finance function in producing both accurate and effective financial reporting.

To learn more about how RSM can assist you with this process, contact RSM’s management consulting professionals at 800.274.3978 or email us.