Reducing the Finance Staff – You May Need to Look Outside Finance
You know your finance staff is too heavy. You’ve benchmarked it against firms similar to yours and they come up leaner. It makes sense to trim your staff back.
So do you just go ahead and make the cuts?
Maybe you can’t do these cuts alone. You could be treating a symptom and still not getting to the disease.
You might need to also see what is causing the bloat. Where does some of the extra staff seem to be spending their time? Consider some possibilities:
· Accounts Receivable. This could be a signal of service, production or system issues. Are customers holding back on payments for a reason? Are change orders not getting communicated before the billing gets out, leading to large number of credit memos?
· Accounts Payable. Are there cash flow issues that mean the company is behind payments, resulting in time spent handling vendor calls, juggling payments and other non-productive work?
· System Issues. Poor systems can really hit home in finance and lead to a lot of extra work.
· Company processes. Are there ways a company operates that make things that they really need to be? Where are there too many steps or too many approvals needed?
· Misfit in finance talent. If you have weak players, you are going to need more of them. It could be a hiring issue or a training issue or both.
· Wrong person at the top in finance. Get an empire builder or someone who is not hands-on when hands-on is needed and you will be too heavy in finance.
Based on what you find, you may have to do more than just cut finance to pull it off. Know if it is just a finance department issue or if there is more to tackle in order to pull off the cuts without bleeding.
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