Managing financial policies and procedures is a lot like managing your oral health. If you fail to do the routine brushing and flossing and get regular checkups, you can quickly end up having to get extensive, costly, painful, and time-consuming dental work down the road.
Financial policies and procedures are no different. Waiting five years to update these critical items will be about as much fun for your team as a root canal and will take longer than it should—which means costs will be higher.
One of the most essential things finance teams can do to keep costs down is to review financial policies and procedures regularly rather than only gathering their team for this purpose sporadically.
Finance teams should aim to review financial policies and procedures at least annually. Some areas of finance, like accounting or treasury, may need even more frequent review (e.g., quarterly) to account for changes to business travel or evolving financial regulations.
Once a review schedule is set in each area of finance, the four practices below can help your teams use their time as effectively as possible:
- Make sure you have governance in place and have identified the parties who will be responsible for policy review. In larger companies, the head of each area of finance (e.g., VP of treasury) is responsible for leading policy and procedure reviews for their respective areas. Design governance structures that make sense for your organization so it’s clear who is responsible and accountable for the effort.
- Good content management is also critical for a smooth review process. Multiple versions or drafts of a policy held by various people will cause confusion, adding time to your review process. Work for a single source of truth for these documents so people know where to go for the most reliable, up-to-date version.
- Make a checklist and document your process steps for policy review. Process documentation should address who is involved when reviews need to happen and how they should be carried out. The more standardized your process, the less likely your teams will spend time doing things that don’t matter.
- Draw key stakeholders into the review process. For example, your biggest travelers should give meaningful input into your organization’s travel and expense reimbursement policies. This helps ensure that policies are relevant and meaningful to those who need to follow them.
Learn more and tap into the total cost to manage financial policies and procedures.