Financial Design - The 3 moving parts
In the world of accounting, it's not a word we use often - Design! But when you delve into the idea of design, it becomes apparent that it's very much a fabric of our lives. Every great product of our times is seeped in good design. Finance is not an exception in this regard.
As management accountants, one of the jobs we are constantly involved in is the creation of cloud-based finance departments . We focus on three core areas as a part of the agenda,
2. Process and
We build things for people. Naturally, people are central to creating any finance function. At the end of the day an intelligent financial design is enhanced and powered by real world users who use it to drive business decisions. The more your numbers are alienated from everyday use, the more impractical your financial design is. Understanding the users needs or problems, like in any other industry is central to creating a finance department that would stand the test of time.
Many SMEs, do not need a full-time finance person - be it a bookkeeper, a controller or a CFO. This is manifest in the myriad virtual products and services that are on offer. As a direct result, we find that cloud -based finance departments are very much in vogue. Where we have software such as Xero along with function specific add-ons, fashioning something that closely replicates the functionalities of an end to end finance department is possible.
But good financial design is not about throwing a set of cloud-tools together.
A clear understanding of the users issues and the most preferable outcome is fundamental for achieving the man-machine synergy.
We love this quote from Ryan England, CTO of Many Limited, that sums it up,
“Design, when it’s done right, is invisible. It’s the intersection between form and function, quietly and elegantly allowing the user to do exactly what they need to do, exactly how you want them to do it.”
“Simple can be harder than complex. You have to work hard to get your thinking clean to make it simple. But it's worth it in the end, because once you get there, you can move mountains.”
Ken Segall - Insanely Simple: The Obsession That Drives Apple's Success
An intelligent financial design is impossible without a set of underlying processes that support its successful implementation and more importantly, a post-implementation run. When we say "process" people often associate it mentally with flowcharts and smart-art. A workable SOP is simple, practical and above everything else promotes a "common-sense" approach.
We define a process in this context as a set of support steps that causes good financial design to sustain with reduced human interference.
For instance, sales is a function, and prospecting and invoicing are integral parts of this function. Imagine you run an e-com store. People come to your website and purchase things. They pay for the purchase and receive a proof of purchase - an invoice. There are processes at each stage of this event that has a financial impact. The buying, the reduction of inventory, the issue of an invoice and the money reaching the bank. It's one cycle of events that are intricately connected to each other.
If the process that supports such a function is unclear and fragmented, the design that supports it would be dysfunctional.
Technology is deceptive. Many a times, when companies want to adopt tech for their finance function, they fail to realise that tech is not a magic wand. No - you simply cannot adopt a set of popular software solutions and throw them together to create the finance function you so need and crave. There has to deliberate thought and preferably documented reasons on the "people" and the "process" aspects before you go anywhere near tech. This is where the concept we most love and adapt to every possible build we do - integrated automation.
The power of using the right tools is manifest if the slip and grip between tools is minimal - you spend very little or ideally no time transferring data from one solution to another to create a complete picture of your numbers. So having software that allows for add-ons that would then feed off that data is important. Our take - pick a master software and build utilities around it. We do this with Xero.
Having said that, we make allowances for individual idiosyncrasies and tastes when collating tech tools - such as a user's fondness for using smartphones over laptops.
Does it meet the needs?
No amount of tech can create a good finance function, unless the information you need for quick decision making is accessible to the user. Make the process practical, likable, then throw in the tech for the home run.
Creating a series of smart tools is a great starting point. Sustaining them to get the results you need can be tricky. You need user buy-in. If we are building things for people, make sure they love it, embrace it and use is - constantly!
This is Part I of a four part series - in Part II, we will discuss the People aspect of financial design
1. Design picture - https://www.pexels.com/photo/black-pencils-and-sign-word-6445/
Source - kaboompics.com
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