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Why It’s Worthwhile To Improve Your Finance and Accounting Function?

Posted by Arya Chatterjee

Expert advisors: William Webster and Ankush Sharma

June 11, 2024

Private company experts Ankush Sharma and William Webster share strategies to increase the value of your business.

Beyond simply number crunching, finance and accounting are pivotal for strategic decision-making, risk management, and operational efficiency. Their influence seeps into every aspect of the company, from securing investor confidence to optimizing resource allocation and ensuring regulatory compliance.

Ankush Sharma and William Webster explore how robust financial controls, interdepartmental collaboration, a culture of continuous growth, precise financial analysis, regulatory adherence, and cutting-edge technologies collectively boost businesses’ financial health and competitive edge.

Strong Financial Controls and Operational Efficiencies

“Strong financial controls and documentation build confidence among analysts and investors,” Ankush explains. “The business that can demonstrate they have strong controls in place can get up to 15-20% more funding from investors.” This underscores the critical role of stringent financial controls and well-documented processes in fostering investor trust and financial stability.

By adhering to detailed standard operating procedures, policy documentation, and process maps, businesses can solidify transparency and reliability in their financial reporting, which is crucial during due diligence processes.

Collaborative Value Creation

The finance department is pivotal in enhancing value through collaboration with other departments, especially with informed and data-driven decision-making. “When the departments are aware of the budgets, actuals, and trends, they can adapt to the ever-evolving business environment that the organization is going through,” Ankush says.

The informed departments can decide where to invest or spend to maximize their returns. Senior management can also leverage financial reports to monitor planned versus actual results, reallocating funds as necessary to achieve organizational goals. Regular updates through weekly dashboards and monthly financials are crucial for tracking KPIs.

Culture of Continuous Improvement

A culture of continuous growth within the finance function is pivotal for sustainable value creation. “The finance team acts as a “watchdog” for the investors, contributing towards maximizing the ROI by helping control the budget for individual departments and overall at the organization level.” Ankush defines. By continuously validating and capturing data points accurately and promptly, the finance team ensures the business is always ready to face investor scrutiny. This ongoing vigilance helps maximize the return on investment (ROI) by controlling budgets at both departmental and organizational levels.

Enhanced Financial Analysis and Reporting

William emphasizes the importance of accurate and timely financial data in decision-making. “All good decision-making comes from understanding past performance. Access to accurate and timely financial data is crucial to forecasting financial performance.” Accurate financial data provides a reliable basis for developing models and strategies that drive value creation.

Compliance with Financial Regulations

Ensuring compliance with financial regulations is critical for long-term value creation. “Compliance with financial regulations can make or break a company’s long-term performance. For example, if a new legislation or regulation is enacted and a company is not set up to handle the obligation, they could be hit with potential penalties,” William explains.

He further shares the example of overtime pay for employees. Many companies are hit with Department of Labor fines for not complying with reporting requirements. Adhering to financial regulations helps avoid such risks, ensuring the company is stable, and its reputation is protected over the long term.

Emerging Technologies in Accounting

Emerging technologies, mainly Robotic Process Automation (RPA), are transforming value creation within the finance industry. RPA can automate routine tasks such as reconciling balance sheet items and pulling data into custom KPI dashboards or financial models. “While the technology is still in its infancy, we can expect organizations that invest in RPA to reap enormous benefits,” William points out.

The road ahead

Value creation in finance and accounting requires solid financial controls, collaborative efforts, continuous growth, accurate data analysis, regulatory compliance, and embracing emerging technologies. As William and Ankush illustrate, these elements help foster investor confidence, optimize organizational performance, and ensure long-term growth. Through a concerted effort in these domains, finance and accounting departments can significantly impact the organization’s financial health, development, and success.

Want to be diligence-ready for PE investment? Don’t miss this opportunity to learn from the best in the business at our Escalon Webinar!

Register now for our webinar on June 26, 2024, at 2:00 PM ET / 11:00 AM PT.

Register Here


Arya Chatterjee
Arya Chatterjee

Arya Chatterjee is a freelance writer and consultant from Mumbai. With a background in journalism and over five years of creative writing experience working with legacy media like Architectural Digest and Femina India and brands like The Label Life, and Macy's, she crafts unique and compelling stories that engage the readers. She enjoys writing about health, beauty, fashion, and lifestyle and exploring the symbiotic relationship between thriving businesses and happy employees through her writing. She is always looking to explore new avenues to expand her creative energy.

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