Every year, at every company, goals are set and financial
departments must allocate money to achieve these goals. Having finances in line
are critical to business success and, appropriately so, companies will spend
months perfecting their financial processes. Visuals are the key to ensuring
perfection in financial processes. Detailed flowcharts help clearly communicate
information locked away in complex spreadsheets. This gives decision makers the
power to successfully plan for the coming year. Flowcharts ensure new employees
and those in need of a refresher are up to speed on the company’s objectives
quickly and efficiently. Shareholders, investors, and employees all need to be
well informed about the company’s financial status. Easily understandable
charts and graphs are indispensible tools for delivering the information they
need.
Documenting financial processes are vital to the survival and
growth of your business. Successful companies regularly reexamine their
business processes in search of more efficient ways to run their businesses, so
why risk inefficiency in your financial departments? Even the smallest
deviations to your accounting processes can corrupt your financial statements.
This is why recording your processes in an easy to understand format, like
visuals made with flowchart software, is so important. But, what processes should you be documenting? I’ve
gathered the following list of business graphics that will help you achieve
financial process perfection:
General Ledger
- In organizations where more than one person handles the general ledger, it is vital to document the process of updating and checking the general ledger. Inconsistencies in handling the ledger will cost a company in time and money, and can result in legal activity if not corrected.
- Documenting each step in an easy to read, graphical manner will ensure every employee working with the ledger makes all necessary steps.
Typical Owner(s) of the Business Process: Finance, CFO, Human Resources
Other Stakeholders: C-level executives
Capital Expenditure and Asset Control
- CFO's have highly specialized tools for monitoring and adjusting capital expenditure, but often have difficulty communicating this information to personnel.
- Business graphics such as a Flowchart, Gantt chart, and matrices ease the distribution of important spending data. Flowcharts are also key in explaining the important question of "where did the money go."
Typical Owner(s) of the Business Process: CFO, Controller
Other Stakeholders: Marketing, IT, Office managers, and Business development
Accounts Payable
- Accounts payable involves several business processes such as reconciliation, expense administration, and internal controls. Accounts payable is highly susceptible to abuse such as embezzlement.
- Complete documentation of accounts payable processes will aid in the elimination of abuse, by creating a flowchart that explains all steps taken during paying vendors, auditing the process is a fast and effective procedure.
Typical Owner(s) of the Business Process: Accounting
Other Stakeholders: Human resources
Accounts Receivable
- The process of billing customers that owe business money is normally handled by a different individual than accounts payable. Requesting payment on a service rendered or product delivered should be considered part of the customer care experience.
- Creating a business graphic for accounts receivable will increase the efficiency of this process by visually showing where you can save time.
Typical Owner(s) of the Business Process: Accounts receivable, Accounting
Other Stakeholders: CFO
Collection and Recovery
- Related to account receivable, sometimes invoices are left unpaid beyond the agreed time. This account is then in default and is transferred to personnel specializing in collections.
- This is an important transition for any business. Careful documentation is important to ensure the handling of these accounts properly. It is important to convey the importance of settling debts in a timely manner, and transferring the customer back into a good standing status.
Typical Owner(s) of the Business Process: Collections, Accounting
Other Stakeholders: CFO
Auditing/Controls
- The review of internal processes is rarely seen as a function needing process improvement. However, documenting the steps in an audit will both increase the accuracy of the audit as well as reduce the time needed to perform the audit.
- Auditing should be documented as a series of steps in a flowchart, allowing anyone to easily understand what is involve in the audit.
Typical Owner(s) of the Business Process: CFO, External auditing service
Other Stakeholders: C-level executives
Records Management
- In the age of information, records management has become an increasingly important business process. Archiving, storing, and retrieving company and employee records fall under the umbrella of records management.
- Documenting the process of records management is the first step in improving on the process. The more efficiently a company is able to archive, store, and retrieve, the more efficiently the involved personnel can function.
Typical Owner(s) of the Business Process: Office Manager, Controller
Other Stakeholders: Human resources, IT
What do you see as the most important financial processes? Which do you think is the most challenging to improve or understand? Please add your comments below!
