The finance department is the heart of every company. Here, financial ratios and liquidity are monitored, and data and KPIs (“Key Performance Indicators”) from across the company are brought together to examine their impact on the company. When it comes to the efficiency of other departments, as well as forecasting, P&L and cash flow, the finance department knows exactly what’s going on. Yet, how does the finance team itself actually measure their work – beyond business and strategy issues?
Data-driven work is commonplace in departments such as sales, customer success and marketing. Clear business goals are matched with KPIs to show progress behind individual measures. Instead of using their own metrics, the finance department likes to work with those of the other departments and thus monitor the development of the company – their own work however remains unmeasurable. Why is that? Experience shows that finance teams tend to do the planning for other departments. It is possible that finance teams, as guardians of “corporate health”, are primarily focused on the overarching business KPIs, while their own operational KPIs are relegated to the background or are not even defined in the first place. Maybe because they have no direct influence on the business to begin with?
Finance teams therefore rarely judge their own work on the basis of KPIs. Yet there are enough processes and workflows that can also be provided with KPIs and checked for their efficiency – first and foremost the area of accounts payable. In the following, we would like to provide suggestions on how data-driven work in the finance team can succeed.