I find it interesting to observe the relationship between Finance and Accounts and Operations in an organization. Mostly, operations teams approach accounts department for specific accounting related tasks only such as raising Invoices, Travel and Expense reimbursements, Purchase orders etc. But actually F&A department is sitting on such a huge wealth of information that is critical for the growth of any organization. Most often this knowledge base is out of bounds to operations team as they do not understand the accounts in the manner it is presented. Those numbers are mostly incomprehensible for the operations team. The question that comes to my mind is what is preventing F&A department to act as advisors to operations team on financial matters and provide financial insight that can positively impact the business performance?   Simply put, the F&A department can help Operations understand and have a control on the P&L of each of their project accounts. Finance department can work  together with operations team and help them identify factors that will impact the Balance Sheet and P&L of operations at a function or department level. Wouldn’t  such teamwork be appreciated organization wide? But what is preventing it  from happening?

Here are a few reasons:

1. Departments operating in Silos. The fact is that most Finance and Accounts departments, do keep the books in order, but more often  do  not understand the intricacies of operations entirely. Similarly most Operations team think of the Finance and Accounts team as unapproachable bean counters. Scott Adams, the creator of Dilbert presents the Finance and Accounts Department in a Dungeon, manned by the devil’s own in ‘The Dilbert Principle’. For business growth and developing teamwork that leads to a true partnership, it is important that silos are removed and each department know the other well.

2. Lingua franca. Accountants can get the attention of operations only if they speak their language. There is little wonder then why operations managers tend to doze off when spreadsheets are projected and numbers are discussed. Demystifying accounts is essential to grab the attention of an operations manager. F&A team needs to articulate a problem in such a way that occupies his mind and help identify and execute options that can make a difference.

3. Focus on compliance instead of performance. The measurement yardstick used in the Finance and Accounts Dept is audit. The emphasis in Audits is almost always compliance. Finance and Accounts Departments must instead see themselves as facilitators of business performance. When one of our clients recently asked us to set up and manage department level budgets and performance tracking for them, I insisted that we first get together with their department heads to make sure that all of us approach it with the right perspective. In the video conference we emphasized that as the finance and accounts team our focus will be facilitating performance. We will be at the service of the department heads in creating budgets and financial statements together with them and review progress on a monthly basis, instead of standing at a distance and issuing reports of budget variance.

4. CFOs being too busy to find time for strategic engagement. Impacting business performance is the strategic role of the CFO. But very often tactical issues occupy CFO’s time, not allowing him time for strategic engagements. Many CFOs today seek to protect this space through outsourcing.