Businesses can’t run without sound financial management, and most organisations rely on some form of finance system to manage their incomings and outgoings.
But not all finance systems are created equal, and over time they can begin to lose pace with the ever-changing needs of your business.
To learn whether or not your current system is performing at a level that’s more help than hindrance, it’s good practice to schedule in regular system health checks – for your finance system, but it’s good practice for any other business platform you use too!
Finance is a binary issue – the calculations are either right or wrong. Health checks can help to mitigate future errors by either the system itself or from human error in the way the system is used.
Accounting errors can be extremely costly for any organisation. Common mistakes include overstating cash flow, overlooking fraudulent activity and forgetting to pay invoices (or paying them twice!) can damage not only forecasting accuracy but also business planning, reputation, and incur potential governmental fines too.
Read more: How software can enhance your company’s financial forecasting
The lost time and cash associated with a finance system not running at peak performance will usually far outweigh any investment in making sure it’s working correctly to begin with.
We know that checking all systems are firing correctly is important, and ideally those health checks should be scheduled events. But what are the signs that a check really is overdue?
Here are some of the main symptoms to look out for.
Starting with the basics, but if the sums don’t seem to be adding up, then a health check is definitely in order.
Smaller firms in particular, will have a general sense of what forecasts should be predicting or what money is left over once all the bills are paid at the end of the month. If your finance system is giving a number that’s far removed from what you expected (whether too big or too small), it’s a sign that there could be a missed step, or even fraud, somewhere in the process.
Integrations are essential for the smooth running of an organisation’s finances. Whilst there are some great platforms available which offer a lot of the tools most small and medium-sized businesses will need all in one place, it’s common to need to bolt on additions to your existing software, such as digital expense tracking and filing.
Download now: Choosing the right finance software for your business
When these systems aren’t talking to each other automatically, not only does it increase the time it takes to manage all the various finance aspects of your organisation, it also increases the risk that mistakes can be made.
In 2023, we really shouldn’t need to be printing documents and signing forms in order to run organisational finances.
Paper documents and even email chains can get missed, lost, or are open to fraudulent activity. And if your finance team is constantly sifting through stacks of written expense requests at the end of the week, that’s a sure sign your current system and process isn’t up to speed with the best modern finance platforms available.
Automating these tasks, or at the very least digitising them, saves time, improves accuracy, and reduces the risk of error.
In the modern world of work, where specific teams need access to different information, at any time and from anywhere, your finance system needs to be securely accessible at all times.
Within that, the data it presents also needs to be easy to access and interpret.
Outdated finance systems can often require hours of manual data management which can easily incur errors and data loss, as well as an opportunity for fraud to take place too.
Data security is critical in modern business, whether that’s your company’s own financial records, employee data, or customer/supplier personal and billing information.
Even though keeping stakeholder data secure is a legal obligation for any organisation – no matter its size – many smaller companies in particular, will lack the in-house expertise to truly understand whether their processes are running in a compliant and safe manner.
But you can still get a feel for where weak points may exist. For example, if you need to manually upload client billing data to your current system, then the method of obtaining and noting down that information in the first place could be a risk. Paper forms with personally-identifiable information – including card or bank details – are also a common issue and can be costly to pay for a specialist company to shred and destroy those documents too after use.
Any finance system health check will put security at the heart of its considerations, including accessing the system itself, but also how the data within the system is handled.
Is your finance system starting to showcase some of these symptoms? Even if it isn’t, it’s still important to schedule regular, detailed health checks of your current platform and processes.
At Phase 3, we work with hundreds of businesses weekly to ensure the smooth running and accurate execution of their payroll, HR and finance needs.
Utilising our wide industry and system knowledge, our consultants are experts in exploring the ins and outs of any finance system to find what’s working, what isn’t, and those urgent fixes that need to happen immediately.
Our system review service will provide you with a detailed overview of the ‘current state’ of your system, find the gaps in performance that can help your financial operations excel, and address the issues which are leading to errors in calculations and headaches for employees.
Remember that prevention is easier, quicker and cheaper than a cure. Learn more about our financial system review and health check service here.
Laura’s role as Head of Marketing sees her continually looking for new opportunities to tell the world how great Phase 3 is.
