Do you want a stronger, more efficient finance team in your company? Blakely Cragun, VP of Finance at BILL, spoke with us for this post to offer his insights. First, let’s explore the role of finance teams and how they can affect the success of any business.
A finance team is a group of people who manage the money in a business. They make sure that all financial operations run smoothly, and work to minimize possible disruptions. The size and scope of a finance team will vary depending on the size of the company.
In some businesses, the finance team includes accounting. In other situations, the finance team and the accounting team are broken out to work on different tasks. In companies like these, the accounting team focuses on day-to-day transactions and bookkeeping, while the finance department works on managing cash flow, creating budgets, and other long-term financial solutions.
What does a finance team do?
A finance team’s roles and responsibilities will vary depending on the size and needs of the company. These can include:
- Financial analysis
- Cash flow management
- Budgeting
- Spend management
- Payroll and accounting
Financial analysis
The role of a finance department often includes internal financial analysis. This is a process of evaluating the financial aspects of a business. It can help determine the stability and future prospects of the organization, and help decide the best direction for the company.
Financial analysis could include determining a company’s net present value, the internal rate of return, and other information. The results are then shared with management to help with decision making and create benchmarks for KPIs.
Cash flow management
Managing cash flow can help a business stay on top of their finances, save money, and plan for the future. A talented finance team can help improve a negative cash flow and make the most of a positive cash flow.
Budgeting
Creating and enforcing budgets is a process sometimes managed by the finance team. These budgets determine where company money will be spent over the week, month, quarter, or fiscal year.
Spend management
Finance team goals sometimes include spend management, which is a term used to describe tasks such as paying invoices, handling employee expenses, and creating expense reports.
If the company has a separate accounting department, they might handle these projects instead of the finance team.
Payroll and accounting
In some companies, payroll and accounting is handled by a separate accounting team, but in others it is handled by the finance department. Either way, they are important roles for any business.
Payroll involves making sure that employees are paid the wages and salaries they have earned. Accounting is tracking the financial operations of a business, and it includes projects such as keeping track of expenses and closing the books every month. This team may also handle accounts payable and receivable.
How to build a strong finance team
For expert advice on finance teams, we spoke with Blakely Cragun, VP, Finance at BILL. He said, “To build a strong finance team, you need to ingrain in them that they’re actually building the strategy of the company.”
In his experience, finance and strategy are integrally connected. “You need to have your team focus on executing the strategy—not keeping score.”
Blakely believes that menial work will lead to an unhappy finance team, because they won’t learn and grow from that kind of work. Instead, he suggests that focusing on strategy is more empowering for the team.
How to retain finance talent
Blakely knows the key to retaining finance talent is to keep things engaging. “Don’t assign people boring roles,” he says. “If you let it become boring, then the happiness and productivity will plummet,” he says.
Learning and development are key to retention. “If they’re being challenged, if they’re asked to do interesting work, they have something to look forward to,” Blakely says. “What I’ve learned is, if you can keep people in that state, they won’t leave.”
How to scale a finance team
According to Blakely, finance teams are excellent at identifying ways to scale other departments. But when it comes to their own team? “They usually suck at it,” he says.
He finds that finance departments are usually reactive, and only hire once there is a dire need for more headcount. Instead, he says, “You should hire for the future, think about what needs to be accomplished months down the road.”
“For example,” he says, “If I’m planning on hiring a hundred new sales reps, I better also be hiring within finance at that point as well. You have to take a step back and decide, what does the future of this organization look like?”
Automation in your finance department
While automation can be valuable in any finance department, Blakely states, “Automation is a tool that has a role, but only up to a point. It’s never going to replace a dynamic team.”
As he describes, “Recurring tasks should only be about 20% of your job. The other 80% should be focused on solving problems and developing strategy.” Those recurring jobs can benefit from automation in the form of financial software, but they are not at the heart of what a finance team can accomplish.
He also explains, “Automation can save you time, and that time is better spent on strategic growth opportunities.”
“I hired my team for their brains,” he says. “I need them to have opinions, to challenge me, to think independently. I didn’t hire them to build spreadsheets.”
How to be a better finance leader
According to Blakely, “A finance leader needs to be fairly selfless, because it’s a job without any glory. You are successful by helping other people be successful.”
He also warns that there is a danger in being too ambitious: “A finance leader can kill a sales culture. All you have to do is come in, give them an unrealistic target and boom, it’s done—you killed the sales culture overnight.”
“A good finance leader is trying to find balance,” Blakely says. “You have to ask, ‘How do I make sure my business partner is successful?’” And sometimes setting them up for success means holding them accountable, or even challenging their ideas.
A strong finance team is one piece of a successful business, and individuals in finance have to support other departments and help them reach their goals. While finance can be perceived as lacking glory, it’s vitally important to the success of any organization.
Written with assistance from Blakely Cragun, VP, Finance at BILL
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