How to achieve financial maturity with your financial performance platform

For many finance teams, improving processes beings with understanding where they sit today. And knowing where you want to be in the future.

But finding time to strategically consider this amidst the hustle of daily tasks can be hard. But with the help of a financial performance platform, anything is possible.

Today we’ll take a look at how you can advance your financial maturity with the support of finance technology. We’ll cover:

Why financial maturity is important

Financial maturity allows organizations to thoroughly evaluate their financial processes and identify areas for improvement. Recognizing your organization’s current level of financial maturity can help establish realistic goals for your organization. This ultimately improves accuracy, efficiency, and alignment with the organizational objectives, leading to long-term growth and success.

The four stages of financial maturity

Recognizing your organization’s position in terms of financial maturity is essential to your growth. Typically, organizations progress through a series of phases, each representing a different level of financial capability. Most organizations grow through four stages of financial maturity:

Básico

At this stage, organizations may have a financial performance platform but have not yet fully rolled it out to end users. As a result, teams still heavily rely on spreadsheets and manual processes for reporting, budgeting, forecasting, and consolidating. This process can be time-consuming, prone to errors, and limiting, resulting in reactive rather than proactive decision-making.

Developing

At this stage, organizations are moving away from spreadsheets and likely use a financial performance platform to assist in reporting and budgeting. While financial planning becomes more consistent, the financial performance platform is only rolled out to the finance department and has yet to expand to other areas of the organization.

Developed

For organizations at the developed stage, technology is used to automate processes and reporting, allowing them to reinvest their time towards other initiatives. This results in increased agility in planning, budgeting, forecasting, and financial consolidation processes.

Levando

At this stage, a financial performance platform is now deeply integrated into the organization and recognized as a vital business advisor, influencing strategic decisions across the organization. Organizations at this stage demonstrate a high degree of financial maturity, valuing continuous growth, innovation, and resilience.

How to assess the current state of your financial maturity

To evaluate your organization’s financial maturity, you need to understand where you fall within the 4 stages of financial maturity.

To do so, you can use a Financial Performance Assessment tool. This self-assessment will help you analyze your strengths and areas of opportunity within your current operations. Additionally, a financial performance self-assessment will measure your current state and provide you with actionable insights on how you can advance to the next stage.

For instance, if you find that you are managing your budget using spreadsheets instead of a financial performance platform, your organization will be classified as having a basic level of financial maturity. This is due to spreadsheets being static tools that are challenging to scale as your business grows.

By comparison, if you have automated your budgeting process and are using a financial performance platform across multiple departments, you would be classified as having a leading level of financial maturity. This reflects your ability to leverage streamlined workflows, generate automated reports, improve data accuracy, and enhance collaboration across departments. This level of maturity facilitates strategic decision-making that meets your organization’s overall goals.

9 steps for conducting a financial maturity assessment

Before you take the assessment, there are other steps you can take to gauge your performance. Assessing your organization’s current capabilities and comparing them to industry standards gives you a benchmark for innovation and growth.

1. Set goals: Identify why you’re taking this assessment and the outcomes you hope to achieve. Ensure these goals ladder back up to your organization’s objectives.
2. Select an assessment tool: Research and choose a self-assessment tool specifically designed for evaluating financial maturity. After the assessment is complete, you should have valuable insights into your organization’s current stage of financial maturity.
3. Collect data and KPIs: Collect relevant data from various departments within your organization that will help you benchmark your current financial maturity against your desired stage.
4. Assess your findings: After you take the assessment, look at your current position with a critical eye. Examine key financial metrics, areas where you’re using (or not using) automation, and risk management practices so you can better align your growth opportunities.
5. Collaborate with stakeholders: Engage with essential stakeholders to gain insight into existing challenges and get buy-in for addressing opportunities.
6. Benchmark your performance: Compare your data and practices against industry standards to pinpoint where you can focus for improvement.
7. Analyze results: Evaluate the data gathered from your assessment and determine your organization’s next steps.
8. Develop an action plan: After looking at your results, formulate how you will action the necessary changes to achieve your desired level of financial maturity.
9. Track progress: Implement the changes and continuously monitor your progress. It’s key to adjust your approach as needed.

Benefits of advancing your financial maturity

Advancing your financial maturity enables organizations to move with more speed and agility. For example, when you automate manual tasks, you can dedicate more time to generating meaningful insights that improve accuracy and support decision-making.

For the finance team, this shift leads to more accurate reporting and processes. With significant time savings, teams can focus on the value-add work that has influence across the organization and strategically contributes to the organization’s objectives.

For the organization as a whole, increased financial maturity supports a culture of collaboration. This leads to continuous improvement and informed decision making as different departments have a streamlined process to contribute to.

Organizations with developed or leading financial maturity can better allocate their resources, as they have a clear understanding of where those resources are most needed. Additionally, data and analysis are more accurate because they have eliminated manual work that has a higher risk of errors. This approach helps with long-term planning by allowing organizations to create realistic forecasts based on reliable data so they can capitalize on growth opportunities.

To fully experience the benefits, it is important to consistently use your financial performance platform. Mature organizations use a financial performance platform every day to gain a deep understanding of their financial data and performance metrics. It’s their single source of truth. By focusing on tasks that matter, these organizations can enhance their stability and navigate challenges with speed.

By advancing your financial maturity, you can position your organization for sustained success and growth in an evolving business landscape.

Conclusion: Enhance your financial maturity with Prophix One

Financial maturity will help your organization meet your business goals. It provides a solid foundation for effective decision-making, resource allocation, and risk management. By increasing your level of financial maturity, you can ensure that all departments are aligned with the business goals.

It is essential for organizations to take the next step towards enhancing their financial maturity, no matter where you currently sit. Begin by conducting a self-assessment to identify your organization’s strengths and opportunities and leverage your financial performance platform to automate and improve processes and data accuracy.

A financial performance platform, like Prophix One, can support your finance transformation. Designed to streamline processes for the Office of the CFO, Prophix One offers one version of truth where all processes, data, and reports are centralized. This allows you to easily navigate between different functions, access real-time insights, and make informed decisions.

By actively working to better your financial maturity, your organization will be better positioned for success and growth in the dynamic and growing business landscape.