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Advice and Information for Finance Professionals

29 Intimate Touchpoints Between Finance and HR: Modern Best Practice

Whether or not their parents approve, finance and HR are in a long-term relationship. Shouldn’t they be on good speaking terms?

In the past, HR systems have often been the poor relations when it comes to IT budget allocation. But with the courtship for top talent heating up, cloud-based solutions for attracting, managing, and retaining the best people are becoming more popular.

Unfortunately, passion can cloud reason and sometimes decisions are made to adopt HR systems that don’t talk to finance. Think about—every time you make a change to an HR policy, there is a reciprocal impact on finance.

Now, I’m no Dr. Phil, but I know that communication is the key to a long and happy relationship. If your HR system is not talking to finance and vice-versa, it’s a problem that could fester and ultimately blow up and cause big trouble.

HR and Finance should have no secrets. That’s why weve just published Modern Best Practice for Finance and HR where we list the top 5 ways that, for better or worse, finance and HR are connected.

And, since modern relationships can be complicated, weve identified 29 Intimate Touchpoints between HR and Finance and other ERP suitors

Modern Best Practice for Finance 

1Budget To Approval: Organization Change Impacts Budgets – your company has decided to increase the amount of sales personnel to capitalize on new products in the marketplace. New departments and budgets will need to be created and approved.

2Asset Acquisition to Retirement: Organization Change impacts Asset Management – your company is on an expansion path. You need to plan acquisition of assets such as furniture, real estate, and computer equipments to accommodate the growing organization and how best to take advantage of the depreciation schedule.

3Bank Transaction to Cash Position: Organization Change impacts Cash – your company has decided to setup branch offices and production facilities in new countries to better serve the expanding local clientele. Cash reserves in local currencies have to be setup to meet the new payroll requirements and accurate HR personnel data is key to effective cash allocation.

4Expense Report to Reimbursement: Policy Change Reduces Expenditures – the office of the CFO found travel costs to be considerably over budget after an analysis of expenditures. Adopting a new travel policy across the entire organization which requires video conferencing first or a travel justification and management approval second will reduce unnecessary travel.

5Supplier Invoice to Payment: Organization Change Impacts Supplier Payments – the office of CFO decided to consolidate supplier payment activities to regional level instead of cutting checks from the local offices. Payment to suppliers is maintained during the responsibility shift so the company does not lose any payment discount. 

6Daily Close to Financial Forecast: Organization Change Impacts Approvals – a regional CFO is promoted to a global responsibility; its important from day one that the new Global CFO has access to dashboards that cover the entire operation. Simultaneously, the regional CFO replacement gains access to appropriate dashboards and gains approval privileges that reflect their new role. 

7Period Close to Financial Forecast: Organization Change Impacts Closing – it is the first quarter-end close to incorporate the financial reporting from a recent acquisition. The accounting staff from the acquired company needs to have access to data and reports to resolve the open transactions for speedy resolution and better consolidation.

Modern Best Practice for HR & Talent (Impact from Finance)

8Recruit to Onboard: Business Objective Impacts Recruiting – your HR department needs to advise to business managers for budgeting purpose, bring in the right candidates for vacancies, and streamline on-boarding process. Your company is building a new team to focus on promoting and selling through digital channels. HR utilizes social media to source candidates and conducts initial screening using video conference. The new hires go through on-demand orientation process and access to company systems on their starting day.

9Benefit to Payroll: Business Activities Impact Benefits – HR needs to support business activities in offering competitive pay and benefits.

10Payroll to Payment: Business Activities Impact Payroll – your organization decides to open a new country office to serve the growing clientele. HR needs to make sure the payroll process is complied with local regulation.

11Time Collection to Payroll Processing: Business Requirements Impact Time Reporting – As employees are assigned to a project, the project information should be available for time recording. To prepare for the busy season, your organization reviews past time cards and overtime costs to determine the number of seasonal workers needed. These seasonal employees are granted access to time reporting so they can record their time from their start date. 

12Goal Setting to Appraisal: Business Objective Impacts Goals & Appraisals – your organization targets midsize companies for the new product. The performance goal for the sales staff is adjusted to encourage more selling in the midsize segment.

13Career Planning to Performance Management: Business Requirements Impact Performance Measurement – your organization decides the key to win customers is to influence them early in their decision making process. You work with the head of marketing to add online media competency into the performance measurement of the marketing staff.

14Talent Review to Development: Business Needs Impact Talent Requirements – your organization decides that digital media is key to reach your target customers. HR reviews the talent profile of the marketing, sales, and service employees and tailors on-demand learning offerings on this topic for different roles & responsibilities.

15Termination to Payroll: Employee Termination Impacts Requisition Approval – when employees leave an organization, requisitions in their approval queues need to be rerouted to substitute/next-level approver based on business rules.

16Absence Planning to Productivity Improvement: Business Needs Impact Absence Planning – your organization works on better scheduling of vacation time in the groups supporting critical customer activities. You implement an approval rule the vacation time requests from these groups must be submitted ahead of time and go through managerial approval. 

Modern Best Practice for Procurement

17Insight to Smart Sourcing: Organization Change Hinders Contract Negotiations – to reap the benefit of smart sourcing, there are many departments involved: purchasing, subject matter experts, contract specialists, and accounting. Any personnel/organization changes in these departments can hinder the effectiveness of negotiations. Up-to-date organizational records allow review and approval routing to be executed without a hitch.

18Requisition to Receipt: Policy Change Impacts Compliance – all purchases of a certain category, say for contingent labor must be subject to VP level approval within the accounting function. If HR and Finance are in sync, the policy is immediately reflected in all the appropriate workflows without the need for human intervention.

19Contract Creation to Spend Compliance: Organization Changes Impacts Approval – any revision of/deviation from standard terms & clauses requires approval. The speed of approval can impact contract negotiation because often you have to respond within a timeframe. 

20Supplier Registration to Supplier Performance: Organization Change Impacts Supplier Management – a new hire in the Purchasing department has access to dashboards to collaborate with right people with right knowledge: recipients of purchased goods and services for feedback on supplier performance, subject matter experts for qualification criteria, and production managers for purchase order distribution. The configured approval and workflow synchronized with HR, so she is sure to reach the right people.

21Supplier Return to Settlement: Organization Change Impacts Supplier Settlement – employees new on the job can view return orders on their dashboards to work on follow-up actions. 

22Supplier Invoice to Payment: Organization Change Impacts Approval – resolving disputes quickly and paying supplier on time allow organizations to take advantage of any payment discounts and lead to favorable terms for future contacts. New employees in the Payable department gain access to dashboards and necessary approval privileges to resolve disputes and process payments.

Modern Best Practice for Projects

23Initiation to Project Plan: Resource Capacity Impacts Project Decisions – to put together a proposal, a project manager needs to know the skill set and availability of the staff. She needs to know whether new staff or training the existing staff on new skills are needed to meet the project commitment.

24Resource Deployment to Utilization: Organization Change Impacts Project Resources – when resourcing a project, the manager needs access to the detailed talent profile to determine best suited project staff. Up-to-date picture of the talents in the organization is critical to project staffing.

25Project Execution to Control: Personnel Change Impacts Project Execution – It is not uncommon that team members are reassigned or replaced during a project. New members need to gain the right system access to perform project tasks and record status to reach full productivity as soon as possible.

26Project Expenditure to Cost Control: Organization Change Impacts Project Costs – project members need to access to system to record project activities and status to reflect project cost accurately.

27Grant Award Funding to Closeout: Organization Change Impacts Award Distribution – The composition of a project team may change the direction of the project and how the project is funded. Award administrators need to adjust funding accordingly.

28Project Contract to Revenue: Personnel Change Impacts Revenue Recognition – Project Admin is on leave of absence. Access to dashboards is available to new assignee to ensure milestones and work completions are recognized for revenue reporting.

29Analysis to Project Optimization: Accurate HR Data is Vital to Project Analysis – CIO reviews the reports from the latest projects and discovers that many projects use database administration service provider on a part-time basis. After reviewing the current talent pool and staffing requirements in the pipeline, CIO decides to build shared database admin resource in house and direct HR to start recruitment.

Best wishes for a long and fruitful future for your ERP and HR systems.

Want to learn more? Download "Winning the War for Finance Talent."

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