You’ve heard of “lean methodology.” But have you realized its full potential in Finance?
This technique, originating in manufacturing, is a great way to streamline processes and eliminate waste – often without shelling out big bucks for new technology or more staff members.
And it can prove especially useful in Finance right now, around year-end.
8 types to tackle
Lean methodology identifies eight forms of waste: transportation, inventory, motion, waiting, overproduction, over-processing, defects and intelligence.
We’ve taken this methodology and adapted it to your departments and processes. Here are examples of how to create a maximum-efficiency, minimum-waste department:
1. Transportation (moving items from place to place)
Finance example: Moving invoices from queue to queue.
Eliminate waste: Ask staffers to flowchart out all the steps in place (arrival, P.O. match, approval, etc.) and then estimate how much each step costs. Then ask: Can any queues be combined or eliminated? Where can we cut time and costs?
2. Inventory (works in progress)
Finance example: Keeping up with record retention – especially all those filing cabinets full of paper.
Eliminate waste: To start off the new year with a fresh slate, schedule time for staff to devote to combing through old records. Guided by your company and government regulations, they can clear out documents that have outlived their retention period or don’t add value.
3. Motion (unnecessary movement of people or items)
Finance example: Paychecks and reimbursements being delivered to employees by hand.
Eliminate waste: Companies that issue any paper checks could take the leap and make electronic payments the primary, preferred option.
4. Waiting (delay in between steps)
Finance example: Waiting for employees to submit expense reports.
Eliminate waste: Provide employees with the option to submit expense reports on the go – like emailed PDFs or mobile Excel files. Making things easier on their end will keep the process from being held up.
5. Overproduction (doing more than required)
Finance example: Generating reports and status updates for other departments/leadership.
Eliminate waste: If Finance issues a report you’re not sure is used by others, evaluate how much time/money is spent producing it to decide if it’s really worth it. Also, talk to other departments about the specific times they need a status report from Finance.
6. Over-processing (having unnecessary process steps)
Finance example: Requiring too many signatures for payments.
Eliminate waste: Every company can benefit from regularly re-evaluating their approval process. How many approvers do invoices pass through? Can that number be reduced for invoices under a certain dollar amount? Could increasing blanket approvals save time and money?
7. Defects (bad data)
Finance example: Errors on year-end information returns that result in time-consuming corrections.
Eliminate waste: You could implement a cross-check process between Finance departments for year-end returns. For example, Payroll could look over 1099s and A/P could check W-2s. It’s a task that’s still in their world – both teams know how to spot tax information errors – but it’s a fresh set of eyes.
8. Intelligence (not using staff to full potential)
Finance example: Staffers’ time isn’t spent on the right tasks.
Eliminate waste: You know it’s key to assess your team as times and roles change. Are staffers’ talents being utilized? What skills do they want to develop? Are individual workloads too heavy, too light? Do duties need to be redistributed? Taking that big-picture look now will help Finance enter 2019 at its best and most efficient.
