Lean principles part two: Eliminate waste in your finance team
In the final part on her series on lean principles, Tessa Hebditch looks at how reviewing compliance and confidence within your finance team can eliminate waste.
In part one of this article series, I explored how efficiency and consistency can be used to remove ineffective and time-wasting processes within your finance teams. This week we’re looking at how compliance and confidence can eliminate waste in your teams.
It’s important to remember, when undertaking any review of a team’s performance, processes and systems using lean principles, we must always aim for perfection.
The goal here is to reduce the waste of waiting to zero – perhaps not likely in reality, but it encourages us to practice kaizen; a Japanese business philosophy of continuous improvement of working practices, personal efficiency, etc.
I’m not going to bore you here with compliance to accounting standards, as this is our bread and butter, and it’s pretty obvious compliance is required in these roles. CPD is vital for ensuring your team have up-to-date knowledge – please insist on this practice and make the company pay for it.
Compliance in the finance team is adherence to service level agreements (SLAs) bilaterally. Finance teams should adhere to the SLAs set by their “customers” (eg HMRC, other departments, the board of directors etc), but also the finance team’s “suppliers” (eg procurement, warehouse team etc) must adhere to the SLAs set by the finance team.
The first step here may be simply to define these SLAs. It is important to understand the whole process to understand whether these SLAs are achievable let alone sustainable.
There is absolutely no point setting a rule that will be broken, but this may be tempting just to adhere to the SLA of providing the board of directors with their management reports on a set day each month.
To analyse why either the finance team or their suppliers fail to comply to an SLA, you can use the “five whys”. Harness your inner child and ask “why” five times to get to the bottom of the problem.
For example, the warehouse team cannot provide a list of stock to be impaired at the month end:
- Why? Because that would involve going around the warehouse checking every shelf and testing each piece of equipment
- Why? Because we otherwise won’t know what’s damaged
- Why? Because when anything arrives it gets put away immediately
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