Setting clear achievable goals is crucial for keeping your finance team aligned motivated and performing at their peak. Well-defined finance goals also help drive the organization’s overall strategic objectives. Follow these best practices to set and accomplish impactful finance goals
Define Strategic Financial Objectives
Start by identifying 3-5 overarching financial objectives aligned to the company’s strategy. Common goals include minimizing costs, managing risks enabling growth and profitability, maintaining compliance and providing strategic insights. Focus on qualitative goals as well as quantitative metrics. Keep the goals realistic yet challenging. Define how each goal ladders up to corporate objectives.
Cascade Goals Across Finance
Break down the high-level goals into specific, measurable goals for finance functions like FP&A, treasury, accounting, tax and internal audit. For example, an overall goal of minimizing costs can translate into target cost savings for procurement. Consulting the team leads helps set practical function-level goals.
Set Individual Goals
Involve team members in setting their own goals. Identify development areas and responsibilities of each role. Collaboratively define 2-4 realistic individual goals per quarter aligned to team objectives. Quantify targets related to accuracy, analysis, productivity and cycle times. Add qualitative goals around leadership, collaboration and innovation.
Make Goals Achievable
Ensure goals are challenging yet achievable. Overly difficult goals demotivate while easily achievable ones fail to enhance performance. Analyze historical data, market trends and benchmarks to right-size quantitative goals. Assess team strengths and constraints to identify attainable qualitative goals. Pilot goals and refine as needed.
Align with Resources
Verify sufficient resources like technology, staffing, budget and cross-functional collaboration are available to accomplish the goals. Adjust goals to match resource realities or secure additional resources. Being set up for success helps teams commit to ambitious goals.
Specify Measurable Metrics
Define clear, quantifiable success metrics for each goal such as money saved, accuracy rate, turnaround time or stakeholder satisfaction score. Quantifiable metrics enable objective assessment of progress. Use leading indicators that provide early warning signals as well as lagging outcome measures.
Set Deadlines
Attach specific, realistic deadlines to goals using tools like project plans and calendars. Daily or weekly targets might work better than annual goals in driving urgency. Ensure sufficient lead time for complex goals involving cross-functional coordination. Balance deadlines across goal categories to prevent skewed focus.
Assign Ownership
Designate individuals accountable for each goal. While collaboration is needed, having single-point accountability provides clarity and motivates delivery. Ensure the owners have skills, authority and incentives to accomplish the goals. Oversight by finance leadership is essential.
Monitor and Report Progress
Implement systems to track progress such as status reports, scorecards and project management software. Monitor both lead and lag indicators versus targets. Course-correct quickly if goals go off track through increased coaching or resources. Recognize and celebrate successes through awards, events and compensation.
Review Goals Periodically
Schedule regular formal reviews of goals at least quarterly. Assess performance against targets. Understand reasons for variances and refine goals as needed based on evolving internal and external factors. New leadership strategies or market conditions might necessitate realigned goals.
Reward Achievement
Link goal accomplishment to appropriate rewards like recognition, promotions, stretch assignments, bonuses and incentive pay. Reward both individual and team performance. Public recognition of achievement is especially meaningful. Rewards reinforce a culture of accountability.
Emphasize Ongoing Development
Have mechanisms like mentoring, training and job rotation to continuously advance team capabilities and close skill gaps. This enables sustainable achievement as goals get tougher. Highlight both accomplishing goals and capability building in performance reviews.
Foster Collaboration and Communication
Finance goals often depend on cross-functional partnerships. Structure collaborative goal setting and transparent progress reporting across departments to enable shared ownership. Choose team-based goals whenever possible to promote cooperation.
Make Goals Flexible
Balance consistency for accountability with flexibility to adjust goals based on evolving business conditions and priorities. Empower managers to realign individual goals with team objectives. Maintain focus on the most critical 2-3 baseline financial goals despite changes.
Solicit Team Input
Involve the finance team upfront in goal planning through workshops and brainstorming. They often spot constraints and creative solutions. Participative goal setting ensures buy-in and commitment. Address concerns around unrealistic or misaligned goals.
Connect Goals to Purpose
Help the team see how their goals ultimately serve the customers, investors, employees or community. This connects purpose to work and enhances engagement. Finance plays an integral strategic role beyond narrow functions.
Make Goals Visible
Prominently display finance goals, metrics, targets and progress on office walls and intranet dashboards. Visual reinforcement keeps goals top of mind. Public visibility also builds accountability and energizes the team. Celebrate weekly wins.
The need to adapt has never been more pressing
We are all currently living in a world typified by rapid modernization, the rise of digital giants, and an overall shift towards more technology-driven lives.
As a direct consequence of this, most parts of our traditional way of life have found themselves becoming increasingly redundant. These changes are especially relevant for your finance team.
When youâre the manager of a relatively small-scale organization using traditional forms of financial management might seem alright. But, what happens when youâre responsible for managing the finances of a big organization?
Using spreadsheets, paper receipts, manual invoice processing, etc. is error-prone, time and labor-intensive, and not at all efficient, especially when dealing with large amounts of data.
In light of this, it becomes quite logical to believe that traditional forms of financial management do belong to an older generation.
If you are looking to overcome the drawbacks of outdated systems, modernize your operations, or, try to find efficient ways to get the most out of your business you definitely need to revamp your finance teams objectives to suit this era.
How to do this? Letâs find out.
Return on investment (ROI) goals
Return on investment, or ROI, goals are a type of investment goal with a focus on how much youâll get compared to how much you invested.
For example, one of your ROI goals can be a 15% return on capital employed in the span of 3 years. Coming up with a plan is easier when you have a target.
Setting Goals for the Finance Team – 7 Areas with Examples
How do you set finance team goals?
Here are some tips you can review to help you set finance team goals: When setting goals for a finance team, consider how these objectives can balance freedom and control, so employees have the autonomy to make important choices efficiently but still have the structure and support they require.
What are finance team goals?
Finance team goals are objectives groups of employees set to improve their performance, productivity and efficiency. Finance teams typically set these aspirations at the end of a fiscal year to identify what they hope to achieve in the next 12 months.
How do you set goals for a finance department?
To do so, consider setting finance department goals and objectives in the next several areas… First, if you do not have at a minimum, an annual budgeting process. Then set a goal to put one in place. Because, as a finance department, analyzing the past isn’t good enough. The team must also be forward-looking. Once a budgeting process is in place.
What makes a successful finance team?
Communicating your goals to everyone is the first step to success. Managers need to make clear the end goal, the steps it will take to get there, and the way success will be measured on that goal. For finance teams, this means thinking about the numbers.
