Maximum efficiency and line-level visibility are the gold standard for finance and operations teams. Operations teams are always looking to be more efficient. Finance teams need all the visibility they can get.
But, do companies always have efficiency and visibility? Unfortunately, no.
Is it possible to have more efficiency and visibility—on both your finance and operations teams? Yes.
The sad truth is, most businesses lack an organized approach to managing finance and operations. Finance teams don’t know what is being purchased, operations teams don’t know when products are being delivered or who is ordering what products. The top reason for mismanagement of finance and operations? The missing link between the two. Both departments must join forces to be as efficient as possible and help your company grow.
The Complete Guide to Procurement Management KPIs
Dive deep into how your team can benefit from tracking procurement KPIs, the 15 most important KPIs to track, and a detailed worksheet to help you calculate which KPIs suit you!
What happens when finance and operations teams aren’t aligned
Let’s paint the picture of what can go wrong when your finance and operations teams are not working together.
Your business is bound to experience frequent hiccups if your two teams don’t have a centralized way to operate. Some of the things that can impact your performance negatively are:
Siloed ordering and purchase information
70% of business leaders feel the data they use to analyze finances and make forecasts is not accurate.
The finding shouldn’t come as a surprise for many finance and operations professionals. Your purchase and ordering information will remain in silos if your operations and finance are not sharing insights. This takes a tremendous amount of time, money, and other employee resources.
No clarity on budget or spending
A budget is imperative to company growth. However, you can only stay within your budget if you are able to track all your expenses. However, that seldom happens when your departments are disjointed.
As a result, you can never be too sure where your money is going, and what you are spending. Therefore, lacking complete visibility into your spending is unacceptable, and is counterproductive to growth.
No way to plan for future growth
Planning for the future is crucial to surviving these difficult times. Resiliency is key. Many businesses are yet to come out from the impact of COVID, so any plan must be highly pragmatic.
However, you will need real-time data and insights to plan for your future growth. Unfortunately, that can come as a barrier if your finance and operations aren’t collaborating.
Most importantly, you won’t be able to access real-time data readily, which is a challenge for 21% of finance executives.
But there is still hope and you can take steps to get your two teams on the same page.
The Complete Guide to Procurement Management KPIs
Dive deep into how your team can benefit from tracking procurement KPIs, the 15 most important KPIs to track, and a detailed worksheet to help you calculate which KPIs suit you!
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What happens when your finance and operations teams are aligned
Now, let’s focus on the flip side of things. Many businesses have been able to bring their finance and operations closer for a plethora of benefits.
However, it takes a bit of effort to ensure your two teams have a centralized way of operation. You should start by encouraging a change in your work culture.
The task would be to foster a more collaborative environment where employees feel motivated to work together. They should understand that the business can achieve its objectives only when the whole of it performs as a single unit. Empower your teams with the right tools to centralize your operations. For example, a B2B marketplace like Order.co can allow your finance and operations teams to stay on the same page. Some benefits of keeping your finance and operations teams aligned are:
Centralized and seamless purchasing
Order.co offers a user-friendly interface for finance and operations to…that’s right… order everything your business needs. They can use the same platform to source goods and services from multiple vendors. It also gives them a centralized way to manage suppliers and keep track of spending.
Let’s take the example of the Physical Rehabilitation Network (PRN). PRN’s product purchases were decentralized, and they relied on a very manual process for collecting and placing orders for each of their 140 locations.
Then came Order.co.
Order.co allows PRN to order everything—every purchase—from a single place. Each of their locations found it very easy to use the software and place orders directly. PRN has a centralized way to track each order and know what purchasing is going on in every location. In addition, the company was able to save time and eliminate its manual purchasing process.
Fast and efficient order approvals
Approvals are necessary for every business in order to keep their purchasing under control. Not only are they necessary, but they should be quick and hassle-free. Instead, businesses waste endless hours trying to find who approved what, and why.
Sadly, that adds to the hours that you waste every year due to manual, inefficient processes. For most businesses, that can take up to 15 unproductive weeks per year. Admin and tedious paperwork are efficiency’s worst enemy.
Your finance and operations teams need an easier way to manage approvals.
Take the example of CorePower Yoga. CorePower Yoga was struggling to manage approvals for purchases across more than 140 locations. Worst of all, they had no way to track or automate their manual purchasing processes. They had to dedicate an employee who collected orders from all locations and placed them with vendors.
Order.co now allows CorePower Yoga to empower every location to order approved products. By placing restrictions on purchasing through approval workflows, Order.co also allows CorePower Yoga to save $50K in unapproved spending every month.
Granular, line-level visibility
Businesses need granular visibility into their spending for not only efficient expense management, but for future growth projections. Without proper visibility into your company’s purchases, it is impossible to budget and plan for any growth whatsoever. With line-level visibility, companies are able to see every single purchase made in a given month and how much was spent—thus making budgeting easier. Order.co enables businesses to consolidate invoices to have that exact line-level visibility companies need if they want to stay on top of every purchase and plan for future growth. It combines all invoices from your vendor purchases each month into a single monthly invoice. As a result, you can track and analyze every dime your company spends.
Accurate Budgets & forecasting
Let’s face it. Sometimes, employees on finance and operations teams may get a little distracted; they may accidentally put too many zeros after a purchase; they may forget (or lose) an invoice every now and then.
It happens.
However, finance and operations teams can eliminate human errors. Imagine: no more worrying about the quality of your financial data. It becomes free of mistakes. Invoices are perfectly coded automatically in Order.co, so you can import the data directly to your accounting system. This gives you constant, up-to-date information to make more informed financial decisions.
With that, you also have full visibility into each of your expenses.
Based on how your expenses match up with your budgets, you can generate vital insights about not only your finance and operations teams, but your company’s future growth as well.
Plan for future growth like a pro. With more accurate spend data, your future projections for growth are more likely to materialize.
Getting your finance and operations teams in Order
A business can reach new heights when its finance and operations collaborate. You can develop complete visibility into your purchases, orders, and payments. In addition, you can centralize your operations and improve vendor relationships by making timely payments. Moreover, you can process invoices faster and issue approvals with one click. The list of perks also includes cash savings, more productivity, and improvement in your bottom line.
Get your finance, operations, and entire company’s growth in order. Book a demo today to learn how Order.co can make that possible.
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Are your finance and operations teams still working in silos?
Most likely, yes.
So, what does that mean for your business?
For starters, you can be among the 49% of CFOs who don’t have timely and accurate data to drive real-time, informed decisions. Additionally, you may even feature on the list of 73% of finance professionals who complain about the lack of in-depth data.
The truth is sad, out there, and hurting your bottom line.
Moreover, it will continue to impact your business growth as long as your finance and operations work as individual teams. Unfortunately, that is what most organizations are going through, even in this age of technological advance. The flip side of the coin is, however, quite appealing and profitable. Your business can operate as a whole unit when your finance and operations managers put their heads together.
What are the results?
You get real-time, accurate, and comprehensive data to fuel strategic decisions; you can generate vital insights and make accurate forecasts; the two teams can take your company to a whole new level.
Both finance and operations teams are crucial to a business. Therefore, it only makes sense that they can deliver better results by collaborating and sharing knowledge.
Let’s explore the role and impact of both teams, and how getting them to work seamlessly together can make for higher levels of both efficiency and company growth.
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What does a typical finance team do?
Most of us think the job of the finance team is to maintain accounts and create financial reports. It also ensures tax compliance and helps the business stay within its budget.
Undoubtedly, those are the traditional responsibilities of a finance team. However, today, the duties of the finance department are not so trivial. In today’s world, a finance team guides all of the internal and external financial decisions of a company. It provides the number and insights required to stay competitive in the market.
So, what are some examples of the responsibilities of a modern finance team?
Conducting financial planning & analysis to facilitate strategic planning.
Financial planning & analysis is crucial to making realistic forecasts. It enables the business to predict how it will perform financially in the coming days.
The process pits forecasted results with actual ones to identify areas of improvement. It also allows the business to stay agile and deal with disruptions, like losing customers to a competitor.
Managing risks to avoid unpleasant surprises.
Most businesses today rely on debt to operate. As per Deloitte, the corporate debt of nonfinancial businesses grew by 5.5% annually on average between 2010 and 2019. In 2020, that percentage shot up to 9.1%. Debt is not always a bad thing. However, it brings a range of risks to the table. Therefore, finance teams try to identify and evaluate the risks applicable to a business. It looks at several factors like interest rates, legal nuances, and more to predict quantifiable impact.
This data empowers the organization to be in a better position to mitigate risks.
Managing and budgeting capital for optimum ROI.
The finance department is in charge of ensuring your business never runs out of money. Therefore, financial professionals manage working capital and make necessary forecasts. In addition, the team participates in capital budgeting to support business growth. It identifies the best projects and assesses the risks of investing available capital to derive maximum ROI.
Therefore, the finance team is (or, at least, should be) at the core of each and every company’s business decisions.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
What does a typical operations team do?
Would you think of conquering Mount Everest without a guide?
Even trained mountaineers will not dare to climb Everest without a guide. You will surely need someone who is aware of the local conditions to chalk out the best route. Additionally, you will rely on their assistance to arrange suppliers or predict bad weather.
Your operation team performs the same task for your business. It ensures your company keeps running efficiently and effectively to meet all business objectives. However, the exact processes and responsibilities may vary across organizations and industries.
So, what is the main focus for operations teams?
Help the business run smoothly and profitably
An operations team stays on top of all internal details that ensure the profitability of a company. It tries to provide all the right conditions for the business to deliver the right products.
As a result, operations teams are closely tied to customer satisfaction. Take the case of a restaurant for example. The operations team will be in charge of looking after the inventory and raw materials. However, the process is more complex than many can imagine. You not only need to ensure enough raw materials but also their quality and freshness. Additionally, your operations will consider the cost of the materials, labor, and associated processes. It will also work with vendors and suppliers to create long-term relationships.
Some of the responsibilities of operations teams include:
- Managing and facilitating the optimum use of resources
- Ensuring products and services meet customer needs
- Helping C-suite in planning KPIs
- Assessing customer feedback to suggest improvements
- Optimizing supply chain to boost productivity
- Managing and minimizing costs and risks
The final goal of any operations team is to encourage all stakeholders to champion an organization’s value. It also plays a big role in quality management and strengthening the reputation of the company.
Therefore, the operations team is as vital as the finance team to any business or entrepreneur.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
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How can finance and operations teams work together?
A business can walk several ways to allow its finance and operations teams to work together. The process begins with a cultural change where everyone works to achieve business objectives.
We have seen how the responsibilities of finance and operations overlap for better results. However, organizations rely on different methods to facilitate collaboration. The simplest way to tie their processes together is to acknowledge two key truths:
Technology can come in handy to bring your finance and operations teams closer.
For example, spend management software can help your operations team to stay on top of monthly purchases and payments. In the same way, it can allow your finance staff to improve visibility over business expenses.
All team members can access accurate and real-time data from a single interface. As a result, you can also become proficient in expense management and spend management.
In addition, you can discover ample opportunities to cut costs and maximize value. AKA: grow your bottom line.
Automation can streamline the processes of both teams and lead to more profitability.
Your employees spend countless hours on manual and repetitive tasks. This applies to almost all departments—including finance and operations.
For example, your finance team has to go through endless invoices every day, week, and month. The process not only dents your productivity, but also adds to your costs and time. Fortunately, automation can be a key solution to streamline processes and eliminate manual work. Best of all, 1/3rd of tasks in 2/3rds of existing jobs have the potential to be automated. Therefore, it can help your teams save time and focus more on collaboration. It can also facilitate smooth operations and the expansion of your locations.
Take the case of High Level Health, for example. The company had to go through 400 pages of invoices and waste countless hours finding, verifying, and paying each and every invoice. However, High Level Health—in their expansion—utilized invoice consolidation and streamlined their vendor payment process using Order.co. They've since been able to achieve 100% invoice consolidation and save $4,400 in monthly costs.
Getting your finance and operations teams on the same page
Businesses can increase profitability, cut costs, and improve the bottom line when finance and operations work together. That’s a given. However, no matter how “simple” it may seem, some organizations still find it challenging to bring the two teams closer.
To those companies who find themselves struggling to unify their finance and operations teams and cultivate growth, here are a few tips:
Encourage more communication between your teams.
The first step of the process is to get the two teams to communicate more. You have to stay impartial and become the advocate for members of the two teams. You should aim to develop an environment like DevOps where developers and operations work together—only for finance and operations. Call it “FinOps”, or something like that. Be creative.
This way, both teams can share insights easier, faster, and collaborate to achieve your business objectives.
Standardize your business tools for optimum interoperability.
“Optimum Interoperability” seems like a big word. Technically, it’s two big words. Really, what it actually means is “the best way for your teams to communicate and work together”. Your teams may use a range of tools to work productively. That may work in some instances, but after a while, it may not always be the most efficient. In the modern world, you should always aim to standardize your business tools. Look for ways to integrate your apps using APIs or already integrated platforms.
Let's face it: Finance and operations teams are indispensable for businesses. Both teams impact the performance of the organization and growth. Therefore, it is imperative for both teams to work efficiently to achieve success. Moreover, the two teams should work together in close cooperation for making informed decisions.
Make growing easier on your business.
Book a demo today to find out how Order.co can help your finance and operations unify for unprecedented company growth.
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
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