How to Improve Transparency in Financial Management

Having financial transparency at your company can improve the culture and equip employees with the knowledge and tools to fully participate and stay committed to your company’s goals. However, many construction companies don’t know where or how to start when it comes to improving financial transparency or even why it’s important for their business.

Top 3 Ways to Improve Internal Transparency at Your Company

Communication

All departments should communicate effectively and efficiently for transparency to be present in a company. If only one set of eyes is on invoices, cost codes, or other paperwork, it can be easy for something to be missed or mistaken during the process.

Using a digital accounts payable system can help you not only automate your system but also improve communication across team members. For example, project managers will be able to review invoices to ensure they are correct before approving them. If changes must be made or costs don’t line up, then they can be sent back to the subcontractor for correction.

Sharing Information

All relevant information should be readily available to team members. This removes any barriers or delays that prohibit them from doing their jobs. When considering how to make your workplace more transparent, consider the question, “Does everyone (at all levels) have all pertinent information readily available to them?”

You can easily do this by giving all parties — owners, project managers, bookkeepers, etc. — access to the company’s financial management system. This can allow them to communicate, share information, and manage digital files — the core three ways to improve transparency.

Digital Filing

According to the McKinsey Global Institute, construction is one of the least digitized industries. Companies can spend up to $27,000 per year printing and managing an average of 5,000 pages per month. The worst part? Around 50 percent of those printed pages will never even be looked at.

If you want to improve transparency at your company while still keeping an eye on the bottom line, finding a way to manage digital files is essential. A solid digital file management system will make documents easily searchable and held in perpetuity. They’ll always be available when you need them.

This also makes audits incredibly easy. If you need to find something, it’s a simple click of a button!

A Business Case for Increased Transparency

Some businesses aren’t sold on transparency. They don’t understand why all relevant parties should have access to information they don’t necessarily need. Shouldn’t just a few at the top be able to see the big picture?

One important fact to keep in mind is that increasing financial transparency at a company is one of the best ways to prevent fraud and embezzlement. Clear and effective financial management creates policies and procedures that ensure that funds are being spent appropriately.

This includes the regular review of financial records, reconciling bank statements, and monitoring cash flow. When this happens, it’s much easier to prevent both fraud and embezzlement, which occurs when someone within a company takes money or assets for their own use without the knowledge or consent of the company. Embezzlement can happen at any level of the company from low-level employees to senior executives. As a result, having financial transparency and more eyes on the process can actually help to prevent any misuse of funds.

Final Thoughts

Are you looking for ways to increase transparency and reduce the risk of fraud? inBuild allows you to communicate effectively between departments, share information easily, and manage digital files at a click of a button.

Ready to learn more about using a financial management system to revolutionize your process and increase transparency? Schedule a demo to learn more.