52 Weeks of FOS

Re-Evaluate Your Finance Department – Week #39 of The Financial Operating System®

Business finance evaluation: Improving accuracy and efficiency in financial reporting
October 27, 2025 by Calvin Wilder in Articles

After implementing The Financial Operating System® and then going through at least a couple monthly close cycles, it is time to re-evaluate the performance of your finance function. Chapter 24, “Re-Evaluate Your Finance Department,” emphasizes the importance of ensuring the finance function of your business effectively supports your objectives after implementing initial changes during previous steps in the process.

Key Highlights:

  1. Periodic Re-Evaluation:

    • Assess whether the monthly financial close is timely, completed by the 15th-20th of the following month, and provides accurate, actionable insights.
    • Ensure financial statements reflect performance accurately, using a suitable level of accrual accounting (see Chapter 26 for practical guidance).
    • Evaluate whether the reporting package goes beyond financial statements to include explanations for significant deviations, metrics, and a forecast.

  2. Efficiency and Technology:

    • Systems and processes run efficiently, consistently, and accurately.
    • Technology streamlines finance-related tasks.

  3. Internal Controls:

    • Confirm the existence of measures to prevent errors and fraud.

  4. Actionable Insights:

    • Reports provide practical insights rather than just historical summaries.

  5. Self-Sufficiency:

    • The finance function is largely self-managed, minimizing reliance on the business owner for routine matters.

  6. Signs of Underperformance:

    • If the finance function isn’t meeting these criteria, changes are needed. This could involve replacing personnel or adding higher-level capabilities, such as a controller or CFO, to address gaps in the Finance Stack.

  7. Upgrading Personnel:

    • Focus on developing existing staff, but acknowledge when roles outgrow their current occupants due to business growth or changing needs. A-players—top talent—are ideal for driving progress.

Takeaway:

The chapter emphasizes that periodic re-evaluation of the finance function helps ensure that it meets your business needs. The faster your business is growing or changing, the more beneficial this re-evaluaton will be.

Next Step:

Business owners can self-implement The Financial Operating System. Chapters are available to download at smartbooks.com/resources or you can buy the whole book from Amazon (the marketing firm version or the general business version).

If you would like assistance with implementation or would like to accelerate results for your business, please contact author Cal Wilder at cwilder@smartbooks.com or book a free consultation with our team directly using this calendar link.

Written by Calvin Wilder