Finance Process Optimization: Practical Steps to Process Excellence

Let us know where you're coming from in the chat. Would love to hear where you're located, name and we'll get started here in one minute. We're just going to give it a minute or two. We're right at the top of the hour, so just as a reminder, this webinar is brought to you by Maxio. You can see a little bit about Maxio at the bottom and we'll get started here in just one more minute. We're going to be talking about finance process optimization, some practical steps and some experiences and a framework you can use to improve your processes, which is more important than ever these days. Very excited to have all of you out there with me. If you can hear me, please let me know where you're coming from before we get started here. Just go ahead and put it in the comments. Would love to know where you're coming from. All right, we're going to give it just another 30 seconds here and we'll jump into the presentation for today. But if you're out there, just let me know you can hear me. Give me a thumbs up in the comments and let me know where you're coming from. Hey, Haseeb, welcome from Toronto. Ron, welcome from London. All right, we're going to go ahead and jump into things. Co the title for this webinar is Finance Process Optimization, Practical Steps to Process Excellence. And so where I want to start is just taking a minute and thanking Maxio, who is our sponsor, for this webinar. For any of you that aren't familiar with Maxio, Maxio can help you create frictionless finance, helps with your billing, your SaaS metrics. It's a fabulous prop platform. I recommend you check it out. So they've, they've sponsored this today. So giant, thank you to Maxio for making this possible. All right, a little bit about me. I think most of you know who I am, but I'll just give a real quick recap. You can see here. I'm a trainer. I create content in FP A. I run three podcasts, FP and A Tomorrow, Financial Modelers Corner and Future Finance. If you haven't checked them out, I recommend you check them out. I'm lucky enough to co host Future Finance with Glenn Hopper. We talk a lot about AI and technology. I'm also a trainer. I have the privilege of training people on Excel, FP and a a little bit about financial modeling, data storytelling. And I've worked for several large companies including American Express. So that's a little bit about me. All Right, so we're going to do just a quick 12 minute recap of last week. You can find that available on YouTube. If you missed it, it's also on LinkedIn. I believe it's still up there. So if you missed it, please feel free to watch that. And then we're going to spend most of the time talking about a process framework running through some steps of ways to improve your processes. And then we'll finish up with some key takeaways. And as always, you're welcome to ask questions throughout. I'll do my best to keep an eye on the comments section for your comments as they come in. All right, so this is something I've seen similar to this, something I've shared before that I love. You know, this is a three part series on frictionless finance. So it's people process technology. Week one was people having a talented team. Today we're going to talk about optimized processes and then what I like to call thoughtful technology. You know, you can do amazing things with Excel at times you need other tools, you know, bi different things. But it's about being thoughtful, not just installing technology to enable you to accomplish more. And that's when magic happens, as I like to say. You know, the most productive teams starts with people, then processes, then they bring in technology in a thoughtful way to make them more efficient and effective. So last week when we talked about, you know, a high performing team framework, and we started with it, it starts with culture. We talked about mission, vision and behaviors. I shared a clip from a podcast episode I did with Brett Hampson, which I recommend you listen to if you get a chance. And he talked about the importance of finance and FP and a really having a clear vision and mission so that they don't get caught up and just doing what the business wants like the, the emergencies, the fires, the things they want in the moment, versus focusing on what's most important for finance and the business. And having that clear mission and values helps you always look back and going, is this helping us accomplish what we need? Then we talked about surveying the landscape using benchmarking, using maturity models, assessments of your team, the importance of attracting, retaining and developing talent. Now this week we're going to focus on, hey, how do you create better processes? Next week we'll get into tools and technology. So how many can relate to this image here? I love in the thoughts, right? But that is the way we have always done it, Stein punching the clock every day, right? Those people that are just there. And the reason I share this image Here, where you see a bunch of numbers on the screen and somebody out of 10 key is, I still remember learning this early in my career. This is 20 years ago, probably now, almost. I was attending a session on vba, an efficiency how to be more efficient in Excel. And I remember the guy that got up there, he goes, I remember I started my career, computers were fairly new. They'd had spreadsheets. This is probably, you know, late 80s, because I think the person was using Excel. And he goes, I'm sitting there with my new employee, with this boss, the guy who's going to be training me, and I'm watching him work, and he enters. He has a bunch of receipts, and he enters the numbers line by line in Excel, gets down to the bottom, he's entered them all, goes over to his 10 key and adds each number up manually and types the number in the bottom of the spreadsheet. And the guy looks at him and goes, I'm pretty sure the spreadsheet will add that for you. And the man responds with, I don't know about that, but this is how we do things. And, you know, the guy just was shaking his head and going, you know, that's the mindset we don't want. We want a mindset of how can we be more efficient in what we're doing. And so I thought that picture kind of captured that. And I always remember that story at the beginning of that training and the phrase that we've all heard, but that is the way we have always done it. If someone tells you that, tell them that's not a good answer. You know, ask them to give you a better reason, because that's just a. That's a terrible reason to continue to do something. All right, so, you know, we'll get into this a little bit more next week, too, but it's really important to fix processes. I love this quote I came across this. It's from Hasser Consulting, I think it was Richard Hasser or one of the founders, where he said, new technology plus old processes equals less reliable, more expensive old process. And so, you know, it's important that we're always thinking about our processes, especially in a day of AI. I bet if I asked every one of you, sat down and had a couple minutes with you and asked you about AI, I would bet there's processes or something you're doing today that makes you more efficient with generative AI than you were before. It's a golden age to really disrupt many processes. Is AI there for everything? No. Is AI still sometimes A little more talk than reality in areas, yes. But can it make us more effective? Without a doubt. Hardly a day goes by that I don't use AI. I can say I used AI in this presentation. You say I use it with emails, there's times I use it in Excel. And so, you know, we need to constantly be thinking of how does that impact our processes and what we're doing. All right, so here's the framework I like. There's set. There's seven steps to this framework. So, you know, we have starting with mapping the process. It's really hard to fix something if you don't understand the current state. I mean, how many have ever came into a role? We've probably all been there and you inherited a role and there's no good documentation. Hate that. I had a situation where somebody I know, he. He got himself let go from a job. He had done some things, and fortunately I knew he was going to get let go. So I was able to get a little bit of documentation from him, but I had hardly no documentation. Inherited this big, huge database and this big long process that we had been using for years for, with 40 years of data and just kind of had to figure it all out. And had I just had a map, had I had a little more detail, it could have saved me hours. So process improvements and just processes in general, you need to map the process, you know, from there. Once you've mapped it, once you understand it, you got to spend time analyzing it. That idea of, you know, well, this is how we've always done it, needs to be thrown out. Then starts the process of redesigning the workflow, you know, assigning those resources, implementation, execution, and then you monitor and optimize. And we'll go through each of these one by one. But this is the framework I like. And what I like to say within that, that I think is as important or more important the framework is the idea that you have to have a process mindset, a culture of process efficiency. And again, I'll share what I mean by that. I did a survey one time. I've heard this a lot from people. I don't have the technology to do my job. The tools aren't good enough. I worked in a company, and this is in the 2010s that had its systems like it was the 1990s. Billing platforms. Everything was just a huge mess. Without doing a lot of work, I couldn't even tell you the revenue for our top customers, for just our business, let alone the company as a whole. And in many Cases. It was wrong, but did I let that stop me? Unfortunately, we're a situation where the owners were not going to invest in new platforms. What did I do? I improved my Excel skills. I learned Power Query a lot better. I started building a lot of reports with Power Pivot, eventually put those in Power Bi, and I fixed a lot of things. As I like to joke, the processes were janky and it's not the ideal way I would have done. It would have been better to have a database. Eventually they allowed us to bring someone in the new Python at the time and we improved a lot of the data and the processes. I didn't let the fact that I couldn't invest in new systems stop me. And that's what I mean by a process mindset. It really is a shift in your mentality to say, yes, technology would be nice. Could it help us? Yes, but I can have the best processes possible with what I have today and just, you know, putting in that work and effort. All right, so mapping the processes, this is not a fun part, but it really is necessary. I, you know, I've had the opportunity to do that in more than one situation. We're drawing out, hey, what does the processes look like talking to people? So it starts with, first you need to find the purpose. If someone's sending out reports and nobody can tell you the purpose of it, don't bother mapping the process. Ask if you can get rid of it. I've seen that before. We've all seen it. I still remember having on Jack Alexander. He's written a couple books on FPA on a podcast and he tells how he went into a job and there was a hundred page report everybody had. He asked, is anyone using it? The answer came back, they were using three pages. So he went to his team and said, we're getting rid of the other 97. So sometimes even before mapping the process, which I do list as a first step, is, is it necessary? Right. Really defining that purpose. Then you gotta do all those things, you know, the key inputs and outputs, the activities, what are the critical points? Diagram it. There's a lot of great tools out there, even some AI tools that can help with diagramming. And we'll talk a little bit about that on the next couple slides. In fact, I don't know how many are familiar with, but I would encourage you to follow them. If you're not. Tariq Manir, he's out of Australia, I'll have the privilege of interviewing him here on Future Finance, he's been interviewed on FPA Today and he wrote a book called Reimagine Finance. And today he does process transformation for finance teams. And he's using digital twins. And I really love this LinkedIn. Post the links down here. If you go look them up. He has an entire deck that talks about digital twins. I didn't want to spend 15 minutes since we only have half an hour talking about it, but wanted to share a little bit. Is he says digital twins are the next phase of prototyping and simulations. And I love this last line. Imagine being able to test assess the impact of numerous scenarios before implementing a new process in the business, right. Typically you run it in parallel with digital twins. Might be able to limit the amount you need to run it in parallel. Do a lot of those testing with AI and so great person to follow to really kind of see how the technology is going to start reshaping the way we improve our processes. Not just using AI to, you know, take out the manual work, but using AI to help us map and understand where we can be more efficient in our processes, which is pretty amazing. It was, I was really fun when I got to talk to him, I think it was last week about this. Next, you know, analyze the processes. When I think of analyzing processes, there's a few key areas. Key areas I think about one, you know, time measurements are good. Sometimes you need to know them depending on the process, sometimes not necessary. But for me, you analyze the process. Where is the bottleneck? Is there something really efficient? Like, is it going back and forth when it doesn't need to? Like, is somebody doing something, send it to someone else. They're doing, sending it back. Is there a way to eliminate that? That will often come out as you start looking and having some of those either actual time measurements or estimates to say, where's the bottleneck? Where's the inefficiency? And this kind of gets into Six Sigma and a lot of manufacturing principles when you think of bottlenecks. But it applies to finance processes just as well. Do those interviews, right? Ask the people, like, what would you change about your job if you could change something? What would you change about this, this process? And then there's exception handling. There's almost always an exception to every process and usually it takes a ton of work to add in those exceptions. So is there a way to eliminate them? Are they exceptions you have to handle? Is there a way to streamline them and treat them different? Don't let one or two exceptions blow up the entire streamlining of a process. Exceptions happen. Focus on that, you know, kind of 80, 90% and really think about, is there something we can do to, you know, set that aside and allow everything else to be more efficient? That's one thing I've been guilty of, is often thinking, well, there's this exception, there's that exception, and sometimes it's stepping back and asking what's really important. Then you get into where you read, read, redesign the workflow. This is where I think AI can be really helpful. I would encourage everybody on any process you have that you're thinking of redesigning. Start with, what can I automate? Some of it could be automated, right in Excel, Power Query, you know, maybe some of it could be automated with Power Automate or Google Sheets or whatever tools you use. There's lots of different ways to automate. Maybe it's something like Zapier. If you're a small enough company, then ask, how could AI assist with the new process? Is there opportunity to use agents? And I'll share a little bit of that at the end and my thoughts there. Then you start mapping out, what's this future state look like. You know, talk about that new design with people, key stakeholders, then you're always going to need that success criteria. What does success look like? So, you know, I've, I've had the opportunity to do this. I still remember we were redesigning one of the businesses I worked for, all of our metrics, and we were trying to be more SaaS, like. And I still remember multiple emails going back and forth, just trying to define what a booking was, what a new cell was, what the actual contract value was as we work through how this process would work. Because, right, to create all those reports, to treat a business like SAS that hadn't been SaaS before, requires a lot more redesign than you would think. And it was amazing how difficult it was just to get everybody to agree to definitions, because I was like, we're not going to go out and do a bunch of work to all on the same page what it means, because that impacts systems. So feel free. Any questions at this point, throw them in the the chat. I'd love to hear any thoughts or questions you have. All right, so we'll go to the next one here. Next is assigning resources and here I'm just going to talk about some tips. You know, we don't always have the ideal team we want. We may not have every skill we need and sometimes we have to make do, sometimes we have to go out and hire. But start with trying to match the people and tools to the purpose of Each workflow step, you know, if you have a workflow step that makes sense for someone in accounting to do that's good at it, then look at using that person. You know, make sure each task has a designated owner. I mean, I can remember, you know, in accounting, I worked closely with them. One time we had a problem where our prepaids weren't getting recognized, they weren't cleaning up their balance sheet. So I set up some automated processes, worked with them, but then I made them the owner and they ran it going forward. And I was available to help them if they needed it. So I tried to match the people to, you know, and those tools to the right area. I helped, but they were the ones that were ultimately accountable. Make sure you assign tasks to people based on their skills and experience, not just availability. How many have seen someone get assigned a task that they just can't do? One of the biggest things I've learned is if you see that and it's apparent, don't wait. Make sure you address it early on. I let one sit for a long time and it, it caused a lot of problems in the company. And, you know, I learned a valuable lesson. Have that backup support, you know, and so I think this can, this is an area where it can make a huge difference in processes. It gets back to people. All right, so the next step, step five here is around the implementation plan. So if anyone's ever done any kind of transformations or, you know, implementations, I've done, you know, a lot of process overviews. I remember one of my first roles back when I was at American Express. New department. The prior year, they'd had a lot of problems with the budget, the annual budget. So I was asked to go in and spend several months creating a new process. And I remember we broke it down into phases where we needed to back or doing all the interviewing, developing training material, trying to do, you know, check ins throughout the process. And so each of these steps, you know, risk mitigation plan for key processes. If you have something really simple, you may not need a risk mitigation plan, but if you're implementing something like a new erp, you're implementing a new planning tool, you're implementing a new billing system, which, you know, I helped do before. You need to make sure you have each of these and you don't try to do it all at once. I don't know if anyone's heard this saying before, but one of my favorite sayings, and I think this really applies to the whole idea of phases. Does anyone know how you eat an elephant. Still remember learning this when I was probably 15 or 16. It's always stuck with me. You, you eat an elephant one bite at a time. You take a project one phase at a time. If you try to do it all at once, you're setting yourself up for failure, especially the more complex it is. And training materials, so important, but easy to forget. You're like, well, I can just help people as they need it. It's really nice when you have materials and good documentation. You know the joke I like to call when it comes to spreadsheets? Yeah, Jake. Yep. One bite at a time. Exactly. Thank you. I think there's a little bit of delay between when I ask and responses. But what I was going to say is what do you call a broken spreadsheet? The new employees problem. And that's often because there's not documentation. All right, next you execute the plan. And first thing, I'll just remind people if the process is important. Make sure you're not doing the first month during a critical time. Bad idea to have your first month of a big cutover on year end or quarter end. You know, try to run it, run it in parallel those first few months and make sure the cutover is in a month where if something goes wrong, you can correct it without being a big issue. Right. I've seen that happen. We had a situation in a company I worked for where at the end of the year, they had made a switch in some of the tools and we could tell something was wrong. The numbers just didn't make sense, but we couldn't prove it. So the controllership and the audit wouldn't correct the books. They're like, we're not comfortable making adjustment because you can't clearly show us where this was wrong. This is end of year. Turns out there was a 9, but a $9 million over accrual of revenue. The company's threshold was like 10 million to restate publicly. We ended up coming up to 99 as a company as a whole. Because at the, as the new year came, they realized something was wrong when they dug into it and then they had to correct it. And so that's why it's so important you really think about when you're running it. You know, what are the risks? Get that feedback from everybody. Run, you know, run in parallel and then celebrate the wins as they happen. You know, don't, don't wait till it's all done and everything's going perfect because it almost never is. Enjoy the journey. Make sure you have fun. Along the way, everybody wants to work in an environment that, you know, you celebrate and have fun. All right, so then as you've implemented the plan, you got to monitor and optimize, right? It's not enough to just be like, okay, we got the new plan in place. There's going to be problems. There's going to be things that need to be fixed. You're going to need to adjust resourcing, update that documentation. These are things that are really hard. This is the ideal world. I mean, I think if I ask anyone, how good are you at constantly pro doing your documentation and your workflows and all those things, I'm going to guess 80% of us say no. Accounting tends to be better because they have to for audit, you know, FP&A and some of the other functions don't, don't have the same audit. So may not always be as good, but it is really important. And then the last step, and I talked about this at the beginning and then we're going to go through those slides, but the last in the seven step framework. Remember, create a culture where process improvement is not only encouraged, but rewarded. You know, we've heard of the situation where, hey, put suggestions in a box. Nothing's off limits. Brainstorm. Your people are your best resources. They'll tell you if something's inefficient if you give them the opportunity. And then I just want to briefly touch on AI agents as they are. They're here, they're going to continue to come, they're going to get better. You know, one of the things many companies have to figure out is data, what tools to use. But there are many people using them. So what is an AI agent? A lot of people ask. I kind of bolded what I thought the key, key parts were from this definition. It's an autonomous software program that can, you know, perceives its environments, makes decisions and takes actions without requiring constant human intervention. In many ways, it sounds like a person, obviously, no, it doesn't have general artificial intelligence. It's not a human. But it can learn and it can get better and can manage a lot of tasks. So I think that's something that I would encourage people to be learning about. And here are some of the benefits that people are seeing of AI agents. They can help improve productivity. They can reduce cost. In many times. They can help with faster insights, give us some ideas, analyze some data so we can help the business make better decisions. And one of the best things they do, learn from historical patterns and data. And so it's you know, it's one more tool in our toolbox as we try to improve processes. And then here's a couple resources that I, I found out there and that you can see there was AI agents explained. Okay, just got a question here. I'm going to throw this up real quick and then we'll come back to that. Hi Paul. The cross functional process where accounting, finances connected with procurement, marketing, etc, what roadmap will be recommended? Can we have any reference to look into it with proper insights and details? So anytime you have a cross functional project, those seven steps still apply. You just need to bring everybody into the process. You need to make sure you have key stakeholders from each team. Right. That kind of gets back to having the right resources, the right people involved. You should never do it in isolation. How many have ever had a process just thrown on them and you get upset? I think we've probably all had that. I know somebody who implemented an FPA tool at a company and they didn't discuss it with the business at all. It presented to the CFO and the rest of the business and the other business leader said this tool is terrible, we're not going to use it. And they actually, and the CFO made them go back to the drawing board and they had to find a different tool because they didn't engage from the beginning the other people. So the biggest thing I'd say is I think the principles apply. I don't think they change whether it's finance or elsewhere. But Shakat, the biggest thing is involve them early if it's going to impact them. Make sure you have champions from the different departments for the process improvement because if they're not on board, it's going to be really hard to be successful. And so IBM has a guide to AI agents that I found out there. Microsoft has an AI Agents for Beginners course, 10 lessons, teaching you how to start building AI agents. I'm not saying we all need to go out and build AI agents. Probably good to familiarize ourselves with them. And so there's, you know, a lot of great resources out there because they really are going to make our jobs easier over time. All right, so real quick, I'll go through a key through key takeaways. We're right at the top of the hour. If you need to run, understand I'll stay for a few more minutes and continue to ask any other questions people have. But the key takeaways for me is it starts with develop a process improvement mindset. Don't be the person that says, I Can't meet my business's need because of technology. The reality is there may be limitations, there may be some things you can't do, but almost always if you focus on process improvements and the right mindset, you can help them more than you realize. Even with a really poor tech stack, you know, incorporate AI when improving your processes. Don't sleep on the impact it can have. Use a framework. We talked about a seven step here, but there are others. But frameworks and checklists are there to help you make sure you cover everything. The more simple the process, the less you have to follow it. But it really is important. And then I'm just gonna, you know, I mentioned AI agents, but I'm gonna close with this. Never settle for that is the way we have always done it. If that's the answer you get, tell the person you don't care. You're here to help it be more efficient. Let's talk about the way it should be done. All right, so with that, I'll open it up to any questions. I'll hang on for two, three minutes here and just see if any questions come through. I know sometimes there's a lag, so please feel free to put any questions in the comments. And while we're waiting to see if we need get any questions, again, huge shout out to Maxio for sponsoring this. You know, go check out their platform. You know, they provide SAS metrics and billing. They're one of the early tools in that SaaS space and they do a lot of great work and really excited for part three of this frictionless finance series that will be next week as we will talk about technology. Rossian, glad you enjoyed it. Glad you found it interesting. I said I'll leave it open here for another minute or two for any questions from anyone foreign. So I see Stephen asked a question for some reason that didn't come through in Streamyard, so I'll look at that. Now I'm just switch to the. To LinkedIn. I'm starting to develop interest in FPA processes. How do I strip? How do I switch from mainstream accounting to FP&A. What skills do I need? Do I require certification? So, Stephen, I'll encourage you to go to my website. I actually wrote some articles about that very issue that you'll find on my website. The FPA guy. I also go through all the major certifications, so if you get a chance, please go ahead and check that out. Stephen, you're also welcome to DM me, but that's the, that's the answer there. Angela, the video will be available on YouTube. It will also be available on LinkedIn. You can go watch it after the fact. So, yes, you can watch it for sure. All righty. So I think that's everything I'm seeing. Let me just look one more time on LinkedIn, because sometimes I don't know why not. Every single question comes through, so I'll check to see if I see anything else. Tom, I'm not seeing anything. We're a few minutes pass, so I'll give it another 30 seconds. If nothing comes through, we'll let everybody go enjoy the rest of their day. But I will put a shout out again for Maxio and let everybody know. Any of you that are in FPA, you're counting, looking to get in the FPA, you can join my FPA community, the fpahub.com for free. We have nearly 1300 members. We would love to have you join us. So just please know you're more than welcome to join us there. And thank you everybody for joining me. I really appreciate it. Thanks, everyone.