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How to Optimize the Structure of Your Finance Department

From our experience, the structure of most finance departments is not optimized. And the main reason is that people with the right skills are not matched to the right tasks. Instead, companies hire individuals to fill generic titles like Office Manager, Accountant, Finance Manager, etc. and assign them a variety of tasks that may not play to their strengths.

When this happens, employees can become overwhelmed by working on tasks that don’t suit their talents. And the company is not maximizing productivity. 

We have experience in optimizing finance department structures. Here is our insight into how you can optimize yours:

In order to run a successful finance department, different tasks require different skills.

Some examples of such skills include: 

  • administrative skills for scanning documents and organizing data,
  • analytical skills for analyzing financial reports, 
  • technical skills for preparing tax filings, 
  • managerial skills for managing the team below and executives above,
  • communication skills for ensuring alignment across the organization, 
  • process management skills for ensuring a streamlined and controlled operation, and
  • technology skills for ensuring the latest applications are being fully leveraged to support the business.

Listed below are some generic titles of a finance department and examples of how tasks are often incorrectly assigned. Especially for subsidiaries in Japan, some combination of these roles actually makes up the entire finance department.

  1. An Office Manager who has high administrative and communication skills hired into a position where 50% of the tasks also require technical, process management, and technology skills that they don’t have.
  2. An Accountant who has administrative and technical skills hired into a position where 90% of the tasks also require communication, process management, and technology skills that they don’t have.
  3. A Finance Manager who has communication, technical, managerial and analytical skills hired into a position where 70% of the tasks also require process management and technology skills that they don’t have. 

Example skills possessed by employees in a typical finance department:

You might have noticed that process and technology skills are missing from the example department despite them being critical to its success. This is because in-house finance talent often don’t have these skills.

Spoiler alert: there’s a better way!

Here’s how to structure an effective finance department: 

1. Identify the skills of each individual in the department

Often you will find there are certain skills that go hand-in-hand, such as administrative and communication skills.

2. Break down all of the finance department’s work into individual tasks and determine the corresponding skill needed to do each task well

In order for you not to miss any tasks, make sure you have every member of the department list up everything they are doing at a very detailed level.

3. Then, group tasks by skill, and assign each group to the appropriate individual with those skills

As mentioned above, you’re going to notice that the tasks that require process management and technology skills will be difficult to assign.

4. Outsource tasks that require skills that are not the strength of your in-house team

In most cases, this would be the tasks that require process and technology skills. 

After you do these 4 steps, your finance department should look something like this:

  • An in-house administration-focused individual or team that handles tasks like scanning invoices and coordinating internally with other departments and externally with vendors and customers. The ideal candidate will have great administrative and communication skills. Technical skills are not necessary for this role.
  • An in-house management-focused individual or team with qualifications in accounting, who in addition to overseeing the department spends the majority of time supporting business executives with financial insights and strategic planning. The ideal candidate will have great managerial, technical, communication, and analytical skills. 
  • An outsourced transaction-focused firm that will handle things like bookkeeping, the monthly close process, financial reporting, and compliance. The ideal firm will have all of the skills, with exemplary strength in technical, process management, technology, communication, and administrative skills.

Example skills distributed in an optimized finance department:

Here’s how to leverage our expertise

Restructuring your finance department can be a daunting and challenging exercise. We can help advise you on how to reallocate the tasks to the right individuals as well as take over the transactional work in an effective way.

Ready to optimize the structure of your finance department? Contact us here, we’re happy to help!

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