Why Collaboration with Finance Benefits Procurement and the Whole Company
Efficient collaboration between finance and other departments is vital for a business's overall success. Like a well-functioning body, a holistic approach leads to better decision-making and improved outcomes.
An Isolated finance department leads to miscommunication and lack of accurate up to date information.
By collaborating with finance processes can be optimised, finance can support better decision-making in various areas of the company, and will improve the bottom line.
What is Collaboration with Finance?
Financial collaboration involves working cohesively across departments to support and provide valuable input for various areas of the business.
When your finance team works closely with administrative and management personnel, they can better assist managers when budgets are being prepared or strategic plans devised.
Collaboration between finance and HR can lead to better management of new hire requirements and salary caps.
Why Collaboration with Finance is Important
Collaborative processes yield improved company-wide results. Finance plays a pivotal role in a company, managing payment to vendors, ensuring timely payments from customers, and contributing to strategic planning.
Siloed finance departments hinder efficiency; cross-functional collaboration is essential for agile financial management and better outcomes.
Collaboration is a two-way street. Ensuring finance has accurate and up to date information from the various departments they are working with helps them work more efficiently and provide more accurate insights.
Finance Collaboration with Procurement
Collaboration between finance and procurement is critical as both departments impact the entire business structure.
Procurement providing accurate information related to purchases ensures finance can process invoices in a timely fashion with reduced delays related to invoice approval. Finance can also manage cash flow more easily with visibility of committed spend.
Supplier relationships with key suppliers can be greatly improved by aligning with finance. By processing invoices quickly accounts payable can prioritise payment to:
• Keep key suppliers happy
• Capture early payment discounts
• Avoid late payment fees
• Manage by exception for discrepancies
Adherence to budgets and better spend against budget information can help both procurement and finance teams greatly.
A dedicated Spend Management software, like Planergy, aids both procurement and finance individually with real-time data but also greatly improves the ability of the two areas of the business to collaborate effectively.
Challenges of Collaborating with Finance
While there are many benefits when collaborating with finance, there are also some key challenges to be faced.
• Resistance to change can hinder the adoption of collaborative practices
• Reluctance to rely on others and fear of job loss can impede collaboration
• Poor communication across departments creates barriers
Best Practices for Collaboration with Finance
To ensure successful collaboration with finance you should consider these best practices:
1. Assess and upgrade existing tools to support collaboration and communication
2. Identify areas of priority and start collaboration efforts there
3. Create a plan for how you will share essential financial information
By Lyle Del Vecchio, Planergy
Planergy will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand B9.
You can register for a free ticket here.
