Solving common financial system hurdles, like managing timely financial reporting, meeting budgeting requirements, and helping overburdened accounting departments work effectively are common challenges for Tribes.
Other obstacles include outdated, paper-based processes or inefficient technology practices that hinder organizational growth and agility as well as a tight labor market and preferential in-Tribe hiring practices that keep Tribal accounting departments understaffed.
Finance transformation is a strategic approach to structuring financial systems that can help Tribes address these foundational issues and improve their financial infrastructure.
What Is Finance Transformation?
Finance transformation is the process of analyzing an accounting and finance team, identifying roadblocks, and creating systems and processes that help finance departments run efficiently and effectively.
Finance transformation creates solutions that help Tribes align their accounting processes, staffing needs, and technology investments with their larger goals.
What Are the Benefits of Finance Transformation?
High-functioning accounting departments can create positive impacts for the entire Tribe. Finance transformation elevates Tribal accounting departments’ performance and can help Tribes see better results in the following areas.
Budgets, Grants, and Forecasting
Winning grants depends on accurate and timely financial forecasting, accounting, and reporting. Finance transformation practices can help Tribes’ budget, manage, and report spending accurately and more efficiently making it less likely that grant applications are returned or rejected.
Finance transformation practices can also improve member service departments’ ability to track goals and adhere to financial forecasts, while allowing program departments to verify spending obligations or compliance adherence.
Automation
Digitizing financial operations frees financial processes from dependency on a specific location or person; data and processes are democratized making them easier to access and use. For example, a finance transformation effort can automate invoice preparations, improving cash flow and freeing accounting staff for high-level tasks like tracking and analyzing budgets.
Accurate Data
Accessing and reporting accurate financial data can become faster and easier via finance transformation protocols. Up-to-date and accurate financial statements improve Tribal councils’ decision-making and goal setting capabilities, allowing them to better serve the Tribal membership.
Efficiency
Implementing efficient financial processes returns time to Tribal accounting departments. This improvement allows the department to not only support daily financial activities, but also Tribal leadership’s efforts to secure the Tribe’s future growth and sustainability.
What Triggers a Finance Transformation?
Finance transformation can be triggered by various events, including:
- Stronger budgeting requirements due to funding changes
- Changes in Tribal council or other leadership roles
- Chronically late audit reports
- Need for visibility into financial processes and systems
- Enterprise resource planning (ERP) solution upgrades
- Financial software improvements
What’s Included in the Finance Transformation Process?
Finance transformation processes vary depending on the Tribe’s needs and the reason for the change.
Typical steps include:
- Confirming expectations around timing and outcomes
- Identifying the change drivers
- Assessing current processes, tools, and staff
- Analyzing the current state of the Tribe’s finance department
- Sharing observations and developing recommendations
- Developing and presenting an implementation and change management plan
What’s in a Finance Transformation Roadmap?
Moving an accounting or finance department from manual or inefficient processes takes careful planning and a full understanding of the entire tribal government. Like many complex financial tasks, finance transformations are more effective with professional guidance that can help your Tribe develop a finance transformation roadmap specific to its needs and goals.
Here’s an example of what a finance transformation roadmap can include:
Phase 1: Planning
Create a plan with a defined scope, approach, and timeline. Identify which areas and staff members should be observed and interviewed.
Phase 2: Discovery
Start the discovery process by analyzing relevant documents and observing processes. This phase includes interviewing accounting staff and any teams they interact with regularly, such as operations or programs, to identify pain points.
Phase 3: Analysis
Analyze observations and develop recommendations. Benchmark the results to peer Tribes.
Phase 4: Implementation
Present observations and recommendations. Follow-up with coaching and project management assistance.
This roadmap can also be used to guide Tribes initiating their other digital transformation activities, such as implementing new accounting software.
What Do Finance Transformation Consultants Do?
Finance transformation consultants help Tribes gain a holistic view of their financial landscape by bringing broader expertise and experience to the project. Many have been controllers or finance directors and bring first-hand knowledge of Tribal accounting departments and governments.
Consultants work with Tribal finance to plan, assess, analyze, and implement the transformation, and provide leadership coaching during implementation.
A successful finance transformation can help improve morale and communication in addition to streamlining budgeting, invoicing, and other Tribal finance department tasks.
Other changes include:
- Visibility into budget versus results
- Better alignment of duties and roles
We’re Here to Help
To learn more about how finance transformation can improve your Tribal government, contact your Moss Adams professional.