Organisations must regularly audit their financial policies and procedures, with finance teams streamlining this process to maintain compliance and relevance without diverting excessive time or resources from core business priorities.
According to a guide by APQC, personnel costs are the biggest contributor to the overall cost of managing financial policies and procedures, so it is necessary to build and maintain an ecosystem where people can gather and do the work as quickly and efficiently as possible.
Companies must then review financial policies and procedures on a regular basis, at least annually. APQC recommends that some areas of finance, such as accounting or treasury, may need even more frequent review to account for
APQC enumerates four practices that can help teams:Â
- Make sure governance is 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. Governance structures must be clear on 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 multiple people will cause confusion that adds time to the review process.
- Make a checklist and/or document the process steps for policy review. Process documentation should address who is involved, when reviews need to happen, and how they should be carried out.
- Draw key stakeholders into the review process. This helps ensure that policies are relevant and meaningful to the people who will need to follow them.Â
APQC says maintenance of financial policies and procedures is far more cost effective than waiting until everything is outdated and requires a complete overhaul. This is why it is necessary for organisations to establish a regular review schedule for each area of finance and standardise the process wherever possible.
