Finance department performance can vary wildly between companies. Recent research found that the best finance teams are nine times more efficient than poorly performing teams. As finance teams become crucial partners for strategic decision-making, it has become increasingly important for businesses to maximize their capabilities. Here is what makes a finance department effective and some tips on how business leaders can build a solid team.
The Common Characteristics All High-Performing Finance Teams Share
1. Open Communication Between Team Members
All operational and administrative teams are built on a foundation of team members with highly specialized skills. These skills can be leveraged individually but are only fully utilized when paired with complementary skills. Research conducted by Microsoft revealed that the bonds between team members can be strengthened by encouraging communication between them. Communication channels within and across teams have become even more important in the age of hybrid and remote work arrangements.
High-performance teams encourage collaboration and communication. Business leaders must ensure that the technology used to facilitate such communication transcends departmental boundaries and allows conversations to take place in the right context. This could involve integrating communication software with information sharing or storage systems, for example.
2. Highly Engaged Workers
While businesses must hire the right people for their finance teams, retention in the long term is critical. Employee turnover costs businesses a staggering $11 billion annually. Employee turnover and performance are both influenced heavily by employee engagement.
Engaged employees have been found to perform at higher levels and remain with their employers for longer. Business leaders can keep key team members engaged by giving them increased autonomy over their work, providing them with clear growth opportunities, and empowering team members with the right tools to do their jobs well.
3. A Core Team of Leaders Who Give the Team Direction
Teams that perform at the highest level are consistently assured of their roles and responsibilities and work towards a shared vision. This can be extremely challenging for finance teams that have poor leadership structures. Leaders play a key role in motivating and engaging team members, and a lack of connection can damage confidence in the team—and the organization. 70% of employees who lose faith in their team leaders reported feeling disengaged at work. This gap can also lead to miscommunication and administrative errors.
4. Flexible and Agile Workflows
Once the right team members and leadership are in place, they must optimize their way of working. Finance technology and workflows are constantly changing and improving. Critical but time-intensive workflows can now be automated, while fully integrated software makes it easier for team leaders to identify areas ripe for optimization.
Finance teams that are receptive to change and have highly adaptable workflows are better able to make full use of a rapidly evolving technology landscape. As finance teams become critical partners in strategic decision-making, the ability to understand and integrate new workflows while maintaining efficiency can be the difference between high-performance finance teams and mediocre ones.
5. Consistent Access to Important Operational and Financial Information
The roles and responsibilities of finance teams have evolved significantly over the past few years. They have become a key provider of financial and performance data to stakeholders across the organization. The best-performing finance teams are perfectly placed to collect and organize financial information in a way that provides key insights to business leaders. In order for them to do this role effectively, they must have real-time access to financial information. This is especially important in the highly dynamic SaaS industry, where performance metrics can change significantly in short periods of time.
How to Create a Top Finance Team
Build an Environment of Constant Evaluation and Improvement
The best teams are highly adaptable and evolve to meet changing business needs. This can only be done if opportunities are identified and acted upon quickly. Finance teams must collect performance data, match them against industry benchmarks, and evaluate how the differences can be overcome or extended. A consistent evaluation of existing workflows and administrative processes can help teams build a culture around constant iteration and improvement.
Increase Emphasis on Soft Skills During Hiring
Employee engagement, motivation, and team synergy have become increasingly important for high-performing finance teams. Each of these components of a strong team is strongly affected by the soft skills displayed by team leaders. Team leaders that have high emotional intelligence and are in sync with their teams are often best placed to address concerns effectively and efficiently. Decision-makers must strive to hire team members and leaders that have the skills necessary to maintain such team synergy.
Offer Each Team Member Opportunities for Growth and Development
Attracting and retaining top talent has been a challenge for businesses in many industries. Top-level finance teams must offer their most valuable talent strong reasons to stay with them instead of seeking alternative employment. Finance teams must develop long-term plans for each team member, communicate these plans with them, and consistently engage them throughout their time with the company.
How Complete Visibility Over Finance Workflows Can Keep Teams Agile
High-performing finance teams balance highly optimized workflows with well-developed human connections and are supported by systems and processes that are aligned with their needs. As teams continue to evolve and respond to a changing business environment, business leaders must retain clear visibility over their entire operation and adjust strategies and workflows to maintain high levels of operational efficiency.
To find out how Place can help you build a more efficient and high-performing finance team, schedule a demo with us today. If you found this article helpful, please share it on social media.