Workflow

Every business process, from hiring a supplier to closing the books, follows some path, whether anyone has written it down or not. A workflow makes that path explicit by showing each task, who is responsible for it, what must happen before the next step and where decisions are taken.

It can be drawn as a flowchart or built directly into software. The commercial benefit is control and speed together.

When everyone knows the route, work does not stall because nobody is sure who should act next. Approvals can also be built in, so that a payment above a set amount automatically goes to a more senior person.

Finance teams use workflows constantly. An expense claim moves from employee to manager to accounts payable, a purchase order moves from requester to budget holder to buyer, and a month-end close moves through reconciliations, journals and review.

Each of these has steps that must happen in a set order and sign-offs that must be recorded. Automation takes this further, because software can route items, send reminders and keep a log of who did what and when.

That log is valuable for internal control and for auditors, who want evidence that required approvals took place. It also shows where work gets stuck, which helps managers find bottlenecks (points where work queues up waiting for a step).

The nuance is that automating a poor process simply makes the poor process faster. It is worth simplifying and removing unnecessary steps before building the workflow into a system.

Too many approval layers can also slow the business without adding real control. Measuring a workflow is what turns it from a diagram into a management tool.

Useful measures include the time each step takes, the share of items that need rework and the number waiting at any moment. Reviewing these figures monthly shows whether a change has really helped, and gives the finance team evidence when asking for investment in better systems.