Many accountants want to get out from behind their spreadsheets and add more value. A good way to do this is through the use of business partners in the finance function
So, here is the challenge, whether or not we choose to accept it. We know that the public sector is going to have far less money to play with over the next decade or so, and we know it is the job of financial managers to ensure that the cuts process is managed well and that organisations make the best possible decisions about how resources are used. We also know that, through localism, the ability to control public expenditure from the centre of large organisations like councils could lessen.
The resource question is answered by making ourselves as efficient as possible and getting as close as we can to the people who spend public money. The localism question is best answered by putting ourselves in a position to follow the money wherever it goes.
In the season when some of us will be more worried about the components of the perfect Christmas pudding, here are the ingredients for a new approach to financial management.
First, take your accounting processes, make them as efficient as possible, and put them together within a single financial service centre. At the moment, many local authorities split the accounting function between centralised and decentralised teams. That results in accountants spending much of their time in meetings with other accountants, and that is one activity we can definitely do without.
Then, make your people in the service centre the Keepers of the Sacred Finance System and the Guardians of One Version of the Truth. It is possible that many financial systems will need investment in order to achieve this, but on an invest-to-save basis, the outcome should be the delivery of better quality financial information with less wasted effort.
As to what happens to all that financial information, that is where the other part of the finance service comes in – the decision support role. Although some finance people are allergic to the name, partly because of its historic association with HR, this role is commonly called the ‘business partner’.
With processes consolidated into the service centre, business partners are free from involvement in routine accounting, so they are now at large within the organisation to analyse financial information and to help budget managers make the best possible decisions with it.
Now, it is appreciated that having finance people at large in the organisation doing their own thing will give some finance directors palpitations, but paradoxically business partnering can help to secure greater financial control, because it enables finance people to get genuinely close to the business and understand it. As localism evolves, those same business partners can follow resources down to where they are being spent.
For councils, for example, the mythical notion, embodied in the 1972 Local Government Act, that a single officer sitting in the centre of such a complex and political organisation can be solely responsible for its financial affairs has always been a triumph of hope over expectation, and never more so than now. That is, unless we can get closer to the action and really understand the businesses we serve.
The new model – which is becoming increasingly popular among local authorities – means a major change in approach for most finance people. The key to this is training and development. Both service centre accountants and business partners need to have finely tuned financial skills of course. The service centre people also need to be experts in how to capture data reliably and turn it into reports the organisation can use, and wants to use. That means they need to be just as customer-focused as business partners.
For business partners themselves, in addition to financial skills you can add business and commercial acumen into the mix, not least because business partners will find themselves having to support more and more innovative forms of service delivery. Business partners will also need the ability to form good, sustainable working relationships with their internal clients, exercise influence in a political environment and bring creative solutions to the table.
This is a complete change of mindset for finance folk, but one that many are eager to embrace. Most finance people want to get out from behind their spreadsheets and feel they are adding value. They recognise that their role has never been more crucial and they are itching to get going. Some are more temperamentally suited to the shared centre role and some are business partners in embryo, but the key for all is customer focus and getting the right information and the right advice out to decision makers.
The first job of the New Year for public finance professionals should be to give serious thought to how that can be accomplished.
Alan Finch is senior finance analyst at Tower Hamlets Council