Recent developments both globally and locally (global crisis, Sarbanes Oxley etc.) are putting pressure on managers to change their ways of doing business. Increasing competition, change in cost structures, the importance of financial planning and the need for transparency and accountability are putting pressure on companies for efficiency and sound management practices.

In order to keep up with these changes, companies will have to make adjustments in their finance, IT and organization structures. Finance functions role is critical to feed the company management with timely and accurate data.

Companies in Turkey generally view finance functions as bookkeeping and tax oriented function. This vision disconnects the finance function from the core processes of the company. In a way finance function is forgotten and has to deal with its problems on its own.

The finance function has to be integrated into the core processes of the company. This will result in a function that can report financial and non-financial data on a timely basis along with the ability to detect problem areas with ease.

To put the finance function more into perspective companies should ask themselves the following question:

What is the value that our Finance Function is providing?

To answer this question first the term "value” has to be defined.

The role of the finance function is to be an enabler in the management's decision making process. Finance function has to have such an infrastructure that it should be able to produce accurate information within an appropriate time frame. Furthermore, the finance function should be able to use current data to make relevant analysis and produce forecasts

In order to understand better the tasks performed by the finance function can be divided into 3 main groups.

1. Transactional work (bookkeeping and the like),
2. Operations in which accounting and tax expertise is needed (tax calculations, compliance issues and the like), and
3. Decision support operations (budgeting, management reporting, and planning and forecast etc.).

In Turkey companies have not given the attention it deserves; especially in the areas 1 and 2. A snapshot of a typical finance function would give the following:

• Very little or no investment on systems,
• Personnel employed are generally under qualified and/or mostly performing non-value transactional work.
  

When items 1 and 2 are not effectively working, this leaves very little room for decision support operations as companies need qualified personnel that can crunch the transactional numbers into meaningful reports.

Companies tend to see the finance function as "cost centers”. This results in a low priority for the finance function making it even harder to be considered for investment. Companies generally tend to tackle these issues only when a company wide ERP is being considered.

As a result, the value that the finance function can bring will be to feed the decision making process with accurate and timely information.

How can Cerebra help you?

• Standardization and simplification of the finance function processes,
• Training the finance function personnel to enable value added tasks,
• Review the current system in use for improvement areas,
• Align processes and personnel qualifications for an optimum workload.

The improvements in the above stated areas will enable the finance function to work in the direction of providing timely and accurate information to management for a better decision.

For more information please refer to our Finance Function Related Services.