Is your business ready to face this year's challenges? How about 2023, 2030? Future-proofing your organization is all about fully understanding where your business stands, how it operates and how it grows. With all the disruptions that have occurred in the last 20 months or so, businesses are more conscious about addressing their financial needs and processes for a smoother sail through 2022 -- and beyond.
A key way to do that is to improve financial and operational processes. These improvements are geared towards bolstering the processes, people and functions that make work happen in order to promote growth. It's the first step toward turning to a more future-oriented business.
Truly understand your business
Top organizations have a true understanding of their business, including their purpose, values and financial outlook. Agility within an organization is driven by millions of individual decisions. This true north helps align their team and decision-making in a clear, strategic way.
Moreover, future-ready businesses understand that purpose attracts and motivates people to join their organization, stay and thrive.
It sounds easier than it is. The effort is worth it.
Lay down clear financial goals
Define your goals for the next five years, including short-term goals for different quarters of the upcoming year. While all organizations have a strategy for creating value, few define how they will achieve it.
Future-ready companies, by contrast, drill down on business goals into tangible organizational elements such as business departments, services, product line and regions. Armed with such a road map, leaders can articulate where value is created in the organization, what sets the company apart from the pack, and even what might propel its success in the future.
This will also help understand key capabilities for each team or service, which ones are well within your power to accomplish or may need outside support, and the required changes to see them through.
Outsource core services
Often, businesses that excel at something find they don't excel at everything. Nor does it make sense to invest critical infrastructure attempting to do so. In reality, this often a losing prospect.
Future-ready companies, in contrast, excel at outsourcing services, projects or contracts to the specialists in order to focus on value-add projects in-house. Processes that may qualify for outsourcing are usually either expertise-specific, such as CFO services, or highly repetitive.
CFO services, accounting and business advisory are some common financial processes that are better left to experts. Other commonly outsourced services may include marketing, human resources, public relations, printing and design work, among others.
Other things to look for before you outsource services are their experience level, whether they've served businesses in your niche, whether they believe in your business, and whether they meet your budget.
Automate error-prone processes
Technology exists to make things easier. If you can use it to rid your financial processes of errors and save your staff from being stuck with repetitive tasks, it's an advantage for your business.
Some processes you can automate include:
- Accounts payable and receivable. This involves billing and payment processing
- Managing expenses –including handling reimbursement and reconciling credit card information.
- Planning and budgeting. This mainly involves analyzing and interpreting data
- Cash flow management. Automating this process has to do with getting clean and audit-ready finances.
Develop methods to mitigate financial risk
It's important to keep in mind that financial risk management isn't a once-in-a-year or quarter duty but a regular occurrence.
Budgeting and forecasting, audits, and insurance payments, for instance, are all good periods to assess risk reduction methods. It also enables you to quickly check on other business operations.
According to Forbes, today's businesses have a continuous need for intelligence and risk actions.
Big data and automation are fuelling noteworthy advancements in managing risks, by enabling organizations to monitor risks at scale efficiently and without spending too much money.
Use data analytics to make better decisions
Finance teams seldom receive all information from staff on time when relying on the textbook approach of asking for report submissions. There's also often a back and forth between finance employees and other staff to correct or explain inconsistencies. This takes away time that can be used to analyze data more closely for better decisions.
Data analytics not only helps provide sound data but provides it in real time, helping the entire organization to make better decisions.
Want more tips on a stronger business? Here's how to achieve it in 60 days
At Focused Energy, we help businesses locate their shortcomings, fix those flaws, and emerge stronger. Our guide to 60 Days to a Stronger Business covers every critical aspect crucial for the explosive success of an organization.