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2021/04/18

The Building Blocks of Financial Effectiveness

Tanvi Fal Dessai

WHY do we need Financial effectiveness?

Pursue zero Failures in Performing financial Activities

The meaning of financial effectiveness is to achieve financial objectives and avoid failures successfully. So failures are indicators of ineffectiveness…!

Business defines financial objectives, which are primarily the responsibility of the finance department of a business. So the first and foremost thing for financial effectiveness is the achievement of those objectives.

So in maintaining this pursuit, a focussed and defined path should always be visualized. The right approach is the foremost thing to achieve a financial objective and hence getting financially effective.

The approach is followed by the right strategy to do each task under financial objectives. On a holistic basis, the approach to work, working strategy, and the way of working define how effective a financial system results in.

WHAT can be done?

Segregate clearly the deliverables and milestones

  1. Identify the essential skills and roles required to be an effective business partner
  2. Improve the way finance interacts and collaborates with the rest of the organization.
  3. Develop new and compelling insights about your business.
  4. Identify where technology can improve productivity and deliver better value.
  5. Focus on the processes that will make the most significant impact.
  6. Classify opportunities for self-service functions to improve productivity and decision-making.

WHO should be responsible?


Clearly define the responsibility..!

One of the primary reasons for financial ineffectiveness is that the roles and responsibilities are not clearly defined. How and whom the work is distributed is defined by many factors, such as:

  1. Work Assignment: Clear and specific assignment of work
  2. Responsibility: Clear definition of the responsibility connected to the assigned work.
  3. Authority: Empowering people whom responsibility is given.
  4. Delegation: Provide capacity to delegate the work.
  5. Accountability: Objective evaluation of the performance of responsibility holder.

WHEN to act?

Effectively schedule the activities

  1. If you’re confused about what governance principles you need to establish to balance finance with the enterprise.
  2. You were looking for cost reduction and improved the performance of the finance department.
  3. You’re attempting to get finance and industry together to have an integrated success improvement and challenging process.
  4. You’re worried about keeping the right balance of controls in place and ensuring they don’t stifle the company’s development.
  5. You’re experiencing more issues than expected in setting up joint operations and outsourcing deals by providing long-term gains.
  6. You want to see change as a “normal” state, and you want to figure out how to incorporate change management skills into the finance department.
  7. You want to investigate a financial vision.

How can we help?

AM Audit designs services that provide you with an optimal and effective financial system.

Get a free consultation for any queries.

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