Session 4: Operational Excellence

Transcription

1 Session 4: Operational Excellence Financial Management Training Program Hilda Polanco, CPA, CCSA, CGMA, Founder and CEO Gretchen Upholt, MPA, Consultant December 8, 2016 Reflections on Session 3 2 1

2 As a result of participation, organizations can expect: Enhanced ability to communicate your organization s financial story to staff, board, funders, and other key stakeholders Increased ability to use historical financial information to inform the organization s future plans and forecasts in an inclusive, team-based process More effective communication and financial decision-making among members of the leadership team A foundation for building an organization-wide culture of operational excellence Identification of areas with opportunities for improvement and action steps on how to move forward 3 4 2

3 What are some elements of success in fi i l ti? financial operations? 5 Welcome & Overview (9:00am) Introduction to Operational Excellence People Accounting Software Efficiencies & Workflow Lunch (12:00pm) Internal Controls Making it Stick Adjourn (3:00pm) 6 3

4 OPERATIONAL EXCELLENCE Operational excellence is an organizational culture that values learning, problem solving, and a strong commitment to continuous improvement Essential organizational capabilities that comprise operational excellence fall into three categories: Strategy Resources Practices 8 4

5 Strategy Resources Practices Mission alignment Adaptable strategy and plans Talent and teams performing at full potential Fund development capacity Organization-wide performance measurement Sound decisionmaking practices Robust governance & risk management Efficient i and integrated workflows 9 Effective internal and external communications PEOPLE Talent and Teams Performing at Full Potential 5

6 Survey Results: Do you believe your organization has adequate staffing in the fiscal office? Not sure, 0% Not Sure, 50% (3 orgs) No, 54% Yes, 33% (2 orgs) Yes, 46% No, 17% (1 org) 11 Level Function Strategic Lead and support organizational financial planning and monitoring Managerial Ensure that the finance office is effectively carrying out its operational responsibilities Transactional Perform day-to-day accounting functions, data entry, and administrative tasks. Adapted from Jeanne Bell Peters and Elizabeth Schaffer, Financial Leadership for Nonprofit Executives: Guiding Your Organization to Long-term 12 Success

7 What Factors Drive Your Fiscal Staffing Configuration? Business model Complexity of revenue streams Number of government grants & contracts Budget size Total number of employees 13 Budgeting Payroll Billing Financial Analysis Accounting Reporting Purchasing Grants Management 14 7

8 Finance Information Technology Human Resources Operations Office Management Facilities 15 Small Organization or, could be outsourced 16 8

9 Medium Sized Organization Executive Director Director of Finance & Operations Information Technology Senior Accountant t Staff Accountant A/P & Payroll Specialist 17 Large Organization 18 9

10 How is a finance leader successful in their role? Technical Skills Business Skills Financial Accounting & Reporting Business Planning Management Reporting & Analysis Competency Framework Strategy Process Management Market & Regulatory Environment Leadership Skills Team Building Coaching & Mentoring Motivating & Inspiring People Skills Influence Negotiation & Decision-making Collaboration & Partnering 19 Adapted from the CGMA Competency Framework:

11 21 Questions 1 &

12 ACCOUNTING SOFTWARE Efficient and integrated workflows Which Accounting Software Do You Use? Software Number of Orgs QuickBooks 7 Abila (MIP) Abila (MIP), 4 3 Accufund 2 QuickBooks,

13 Commonly Used Accounting Software in the Nonprofit Sector 25 Basic Functionality Flexible Chart of Accounts Modules for Accounts Payable Accounts Receivable Reporting against budgets Customizable reports Ability to import/export data Advanced Functionality Fund accounting Automated allocations Dashboards View-only access for end-users Paperless document management Electronic workflow routing Cloud capability / Web-hosting Purchase requisitions 26 13

14 Fundraising Database Planning Software Client Tracking/ Billing Accounting and Reporting Software Travel & Expense Reporting Automated Bill Pay Payroll and HR Systems 27 What makes sense for the data flow between systems? Manual entry of all data points into each system Manually entering batched totals Building a digital bridge to transfer data seamlessly Downloading & uploading data between systems Highly manual 28 Highly automated 14

15 Monthly Monthly Quarterly Department Managers Executive Leadership Board of Directors Budget-to-Actual Revenue Performance Dashboard Management Narrative & Expenses for the program(s) and Budget-to-Actual Revenue Performance Dashboard grants/contracts they & Expenses for Budget-to-Actual Revenue oversee (a) each program & Expenses for (b) organization-wide Performance Dashboard (a) each program Statement of Activities (b) organization-wide Balance Sheet and supporting schedules Cash Flow Projection Year-end Forecast Statement of Activities Balance Sheet and supporting schedules Cash Flow Projection Year-end Forecast 29 Questions

16 EFFICIENCIES: CASH DISBURSEMENTS Efficient and integrated workflows Banking Technology Positive pay Ensures checks are only paid to verified vendors ACH block and filters Prevent unauthorized outsiders from accessing or removing funds from an account Electronic transfers Reduced need for check issuance Purchase cards Eliminates needs for handling cash 32 16

17 Technology: Automated Travel and Expense Reporting Systems Web-based, mobile access Scan or take a picture of receipts/documentation Electronic approval routing Direct connections to: Credit Cards, Payroll, Accounting System 33 Electronic audit trail Costs Initial set up and configuration Per user or per expense report fee Commonly Used Systems Expensify Nexonia Tallie Concur Chrome River TriNet 34 17

18 Automated Check Writing Services (such as Bill.com) provide Automated invoice approval workflow that be accessed via any computer or mobile device Integration with accounting software Elimination of the manual process of cutting and mailing checks Simplified deposit process 35 EFFICIENCIES: PAYROLL Efficient and integrated workflows 18

19 HR Management Database Payroll System Accounting Database Time & Attendance System Travel & Expense System Integrated Platform 37 EFFICIENCIES: CASH RECEIPTS Efficient and integrated workflows 19

20 Cash Receipts: Technology Banking technology Remote deposit (check scanning) New technologies that facilitate fundraising: Donations via text message Mobile bidding at auctions Mobile payment solutions (for example: Square) 39 How do these systems connect? Online Giving Platform(s) Donor Database Accounting Software Merchant Account Bank Account 40 20

21 WORKFLOW Efficient and integrated workflows Why Focus on Process Improvement? Resources are scarce Technology is not always the solution Adding more people to bottlenecks may not help 42 21

22 Goal of Process Improvement Process Improvements: Reduced cycle time Elimination of redundant steps and errors Reduction in variability Result in: Increased quality Cost reduction Additional capacity for higher level work 43 Questions

23 INTERNAL CONTROLS Efficient and integrated workflows Activity: Internal Controls 46 23

24 Why do we need internal controls? Protect Resources from waste, loss, theft, or misuse Ensure Resources are Used Appropriately in accordance with stakeholder expectations, monitoring agencies, and your budget and plan Produce Reliable Financial Statements that are based on accurate and verifiable data 47 Control activities are achieved through: Policies Resolutions adopted by the Board Procedures Specific tasks & measures 48 24

25 Segregation of Duties No one person should: 1. Perform all functions within an accounting cycle 2. Have the ability to cover up an intentional or unintentional accounting error 49 Controls should be in place in each of these accounting cycles: Purchasing Cash Disbursements Payroll Independent Contractors Cash Receipts 50 25

26 Does your organization have an up-to-date written fiscal policies and procedures manual? No, 23% Yes, 77%

27 Questions SESSION 4 RESOURCES 27

28 Resources New Skills, Existing Talents: The new mandate for finance professionals in supporting long-term business success. July 2012 Report of the Chartered Institute of Management Accountants. Factors that set apart top-performing finance teams. CGMA Magazine July finance-teams aspx? aspx? 55 NTEN: Membership organization of nonprofit professionals who put technology to use for their causes. TechSoup: Provides nonprofits and public libraries with learning resources as well as access to donated and discounted software services and products. Idealware: Provides researched, impartial and accessible resources about software to help nonprofits make smart software decisions. Achieving Operational Efficiency: A Means to Bridge the Gap Between Mission and Aspirations. Accenture/NYU Wagner School Roundtable White Paper, Nonprofit Accounting Software: Avoiding an Installation Epic Fail, Nonprofit Times Management/Pages/Nonprofit-Accounting-Software.aspx 56 28

29 StrongNonprofits.org In collaboration with the Wallace Foundation, FMA has created a library of tools and resources to help organizations become fiscally fit Four Topic Areas: Planning Monitoring Operations Governance 57 Online Tutorials for StrongNonprofits.org FMA offers complimentary orientation one-hour webinars that feature an overview of the website and drill down on several of its key resources Upcoming webinar dates: January 24, 2017 at 2:00pm ET To register, or see upcoming webinar dates: net/events/ For a 15-minute, on-demand webinar tour of the site:

30 MAKING IT STICK As a result of participation, organizations can expect: Enhanced ability to communicate your organization s financial story to staff, board, funders, and other key stakeholders Increased ability to use historical financial information to inform the organization s future plans and forecasts in an inclusive, team-based process More effective communication and financial decision-making among members of the leadership team A foundation for building an organization-wide culture of operational excellence Identification of areas with opportunities for improvement and action steps on how to move forward 60 30

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32 63 Source: When has there been a successful change in your organization? What made it successful? When have you seen an attempted change fail? What challenges were encountered? 32

33 Change Management Tools & Strategies 1. Project Charter 2. Stakeholder Analysis 3. Communication Plan 4. GRPI Checklist 5. Elevator Pitch 65 High Interest Keep Informed LOW Influence HIGH Interest Manage Closely HIGH Influence HIGH Interest Low Influence High Influence LOW Influence LOW Interest HIGH Influence LOW Interest Monitor Keep Satisfied 66 Low Interest 33

34 Assess / Introduce team- Provide program restructure finance based budgeting managers regular office staffing process financial reporting Design a management dashboard with key metrics Develop and implement a strategy to build LUNA Document roles & responsibilities in fiscal policies and procedures manual Or, choose another project on your list 67 Key Takeaways Make people the center of your change project. Stakeholders must feel heard and connected with for change to gain traction at an organization. Not all stakeholders are created equal. Segment everyone your project will touch by influence and interest. Vary your message. Determine the appropriate level of engagement for each stakeholder group based on their relationship to the project

35 Direct the Rider: Provide crystal clear direction Keep open lines of communication. Motivate the Elephant: Engage emotional side Bring your people into the change process and empower the team. Celebrate successes. Shape the Path: Make change more likely Prioritize your change; take on one transformative project at a time. Ensure the right tone at the top. What is the change management culture at your organization?

36 1. Project Charter: summarizes key details of a project, including: objectives, participants, timeline, and desired outcomes 2. Stakeholder Analysis: a team-based exercise used to analyze how key individuals will influence and be affected by a project 3. Communication Plan: summarizes strategic communications that need to happen during a project to keep everyone on the same page 4. GRPI Checklist: assessment tool used to evaluate a project team around key indicators of team health 5. Elevator Pitch: a concise and engaging verbal statement used to solicit support around a project 71 STOP START CONTINUE 36

37 WHAT S NEXT? Coaching: final sessions Development of workplans Application for funding to support implementation efforts 74 37

38 75 QUESTIONS? 38

39 77 Please complete and return the evaluation in your packet How did we do? 78 39

40 Established in 1999 to serve not-for-profit organizations around the country Provides customized financial management, accounting, software, organizational development, human resources, and other consulting services Works directly with organizations or through funder-supported management and technical assistance programs FMA's mission is to empower not-for-profit organizations with the knowledge and skills to successfully serve their constituents and fulfill their missions Hilda Polanco Gretchen Upholt New York Chicago Oakland Los Angeles /FiscalManagementAssociates linkedin.com/company/fiscal-managementassociates-llc 40