Press release: An introduction to collaborative finance

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How to get your non-financial managers to love the budget process too.

by Kevin Phillips, IDU CEO

Yes, I know. Collaboration is one of the most played-out words in the 2020s. And you’ve already resigned yourself to dragging your non-financial managers, kicking and screaming, through the budget process every year. It is what it is, and you’ve accepted it as a fact that you will be knuckling down and making the best of a bad situation.

This doesn't have to be the case, and many companies have found alternative approaches. And in today's fast-paced business environment, it is crucial not to accept this status quo. In this four-part series, I will provide indicators to determine if your team is financially unempowered, examine the characteristics of a financially-unempowered management team, and explore the steps needed to empower your people. The good news is that achieving this empowerment doesn't require a costly five-year change management programme!

How to spot a disempowered management team

There are several signs that your managers might be financially out of the loop:

  1. You have a lot of paper and spreadsheets being shared around, with no one quite sure how the spreadsheet was set up in the first place. You’ve also lost track of which is the latest version, with different people updating different versions.
  2. You have a lot of out-of-date information and gaps in your data.
  3. Activities such as budgets, forecasts and reforecasts take a long time to happen: months instead of weeks or days.
  4. Information arrives at the last minute, or late, not giving you enough time to consider it properly and reach well-thought-through recommendations or decisions.
  5. It feels to the business that the finance team is quite separated from the rest of the organisation and doesn’t really add a lot of value. (In fact, they are seen as business disablers).

The outcome? The annual budget cycle is viewed as an accounting task bearing little resemblance to reality and enjoying virtually no buy-in. It is begrudgingly endured by all, takes up too much time, doesn’t leave enough time for strategic analysis, and frankly, is no longer fit for purpose today. In fact, other departments in the business may question if the entire process hasn’t just been designed to make the bean counters feel important!

The financially-unempowered management team

Ask yourself, honestly, how empowered are your managers today, especially your non-financial managers. Is it easy for them to contribute numbers and insights into the budget process? Does the final budget reflect their on-the-ground reality? Do they feel ownership and responsibility for implementing the budget, or is it just something abstract that is handed down from the corporate ivory tower? Do your line managers participate in monthly financial reviews? Is your reporting process a black box, or is it a collaborative bi-directional process?

Basically, are your managers metaphorically akin to mushrooms, sitting in the dark, single-mindedly focused on one thing, and lacking active involvement in generating value across the broader organisation?

Now the real question, in today’s world, is can you afford for them to be?

Constant business disruption

Tough and unpredictable economic times need all hands on deck, no dead wood, and input from the ground that is accurate, fast and provides a view of the challenges and opportunities the business faces both today and tomorrow.

There is absolutely no doubt that constant disruption has become the business norm. Just ask Google about ChatGPT! Who better to identify and interpret impending disruption in your business than your managers on the ground, dealing with customers, suppliers and other stakeholders every day? Your on-the-ground managers are your early warning system when it comes to both risks and opportunities for your business. Without their input, how can your budget, forecasts and plans reflect the reality on the ground?

Start empowering your management team

Replace the spreadsheet shuffle and non-finance-friendly tools with business-friendly, contextual accounting tools that have been designed for non-financial managers. This will allow them to provide their insight from the coal face quickly and clearly, as well as give them visibility of the numbers that are relevant to their domain, in a format that works for them.

As a result, your non-financial managers will feel involved in the process and the outcomes, and more accountable and responsible for achieving the numbers. This is worlds apart from them spending their days chasing a seemingly arbitrary number, not to mention having your finance team try to drive delivery against those same numbers – a bit like herding cats, at best!

Once again, and given the disruption present in our everyday lives, I ask if, in today’s world, can you afford not to have an empowered team.

The takeaway: Empowering non-financial managers with financial knowledge and decision-making authority cultivates a workforce that is both financially literate and actively engaged. This empowerment allows them to make valuable contributions to the financial success of the organisation.

In the next article in this series, I will delve deeper into how your budget process and software can empower managers across your organisation. By doing so, you can deliver a budget faster and more accurately, and promote greater collaboration within your business.

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