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Finance Department Process Flow

The following diagram depicts the directed flow of activities of finance department.

Finance
OMS
OMS
Credit
Credit
Customer
Customer
KPI
KPI
Business
Planning
Business…
Accounts
Payable
Accounts…
Assess
Risks
Assess…
Counterparty 
Counterparty 
Collections
Collections
Analytics
Analytics
Payment
Payment
Invoice
Invoice
Accounts
Receivable
Accounts…
Record Sale
Record Sale
Refund
Refund
Financial Reports/ Results
Financial Re…
Budget
Forecasting
Budget…
Sales & MarketingCustomer Relationship ManagementOrder Management SystemSales & MarketingCustomer Relationship ManagementOrder Management SystemSupply Chain ManagementSupply Chain Management
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Finance Solutions
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The importance of Finance department

Maintaining business sustainability and stability depends a great deal on finance departments within enterprises. All business planning and preparations of the organization’s budgets and forecasts come directly from your finance department. Making key strategic decisions, such as which markets to pursue,  depends on the information received from the finance department.

Finance departments have four key functions (Recording, Controlling, Financial Planning and Analysis, Managing) which should communicate and collaborate seamlessly. In the following lines, we will outline what these four key functions include and why their automation and integration are important.

1 Recording

The first key function of every finance department is the recording function, which in fact includes the daily recording, analysis, and interpretation of all financial transactions within the company. Maintaining accurate financial records is of vital importance, as the entire operating in the financial department will greatly depend on their accuracy. Usually, there are three common recording tasks:

  • Accounts Payable (A/P) refers to the money that the company should pay to its vendors.
  • Accounts Receivable (A/R) refers to the money that the company receives from its customers.
  • Payroll refers to the monthly payments provided to the employees.  

2 Controlling

Verifying accuracy or financial control is the second function of the finance department, which should ensure that everything recorded is accurate and adhere to financial regulations. In a nutshell, the controlling function focuses on managing the accounting team, controlling inventory assets, and ensuring compliance with the financial regulations.

3 Financial Planning & Analysis

Financial planning & analysis is crucial for an organization’s financial health as it enhances the ability of the finance department to manage and improve its performance. This function gathers relevant financial data, analyzes it, and provides thorough insights which help management make informed business decisions. This function includes:

  • Creating visual reports about business performance
  • Creating budget plans and forecasts that guide the business on a daily and monthly level
  • Determining the price of company products

4 Managing

This is mainly the function of the Chief Financial Officer who is responsible for making strategic decisions and creating the overall financial strategy. As a result, the CFO should have a complete and thorough overview of the entire finance department.  

Characteristics of an effective finance department

An effective finance department leverages the power of technology to align goals, strategy, and information sharing with other departments. A high-performing finance department drives cost efficiency, improves processes, plans and delivers budget on time, and uses data to deliver decisions that positively impact the business.

However, in order for the business to achieve this and long-term sustainability, business owners should work on optimizing and streamlining their finance processes. There are various technology solutions available nowadays which automate finance processes and core activities, reducing not only inconsistencies but also providing the finance team with enough time to focus on more important tasks. Very often, finance departments are facing challenges that make them inefficient. Some of those challenges include:

Overcoming challenges and improving the finance department

Improving the finance department means making changes to the finance workflows which will increase efficiency. In times when digitalization is becoming increasingly popular, using digitally optimized technology solutions to automate your finance department will significantly improve consistency, accuracy, speed, and will ensure that your goals are properly met.

Automating and integrating finance processes

The finance department includes a lot of processes, which sometimes are done manually. This manual work is time-consuming and can lead to a lot of errors. By automating all those labor-intensive processes, you maximize time savings and improve efficiency.

In addition to automation of the processes, you need to ensure that the various parts of the finance department, including the various departments within the enterprise, are seamlessly communicating with each other and sharing information.

Transform your finance to fit your growing business. Our experts will ensure that your finance department operates seamlessly regardless of its shape and size. Explore our solutions and let’s connect.

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