OKRs for Finance Teams

The OKR method has been proving a highly effective way to structure and achieve objectives since the 70s — and its methodology is particularly useful for finance-related fields and departments.

The structure of an OKR calls for myriad established metrics in order to identify concrete, measurable and quantifiable key results that lead to the accomplishment of an overall objective. Whereas other fields and departments like customer service or marketing may have measurements that are more abstract, and therefore less conducive to creating measurable and trackable metrics, finance departments are great candidates for the implementation of an OKR by virtue of their dollars-and-cents subject matter.
Here we will examine some examples of OKRs written for finance departments at both individual, team, and organization-wide levels.

Example 1: Reduce Accounts Receivable

This is a broad and ambitious objective, and very common among receivables departments, but may be slight to broad. It may very well be that this is already among your finance department’s primary goals in general, but for the purposes of writing an OKR, let’s make it something more specific.

To start out, you’ll want to define whether you are looking to reduce the number of dollars in accounts receivable past 60 days due, or whether you will want to reduce the number of accounts in that status. For the purposes of this examples, let’s choose the former.

So, here’s what that OKR may look like.

Objective: Reduce the amount of dollars in accounts receivable past 60 days due

  • Key result 1: Implement a procedure to contact account representatives the week before their accounts land in the 60+ day bucket in accounts receivable.
  • Key result 2: Analyze which accounts are more likely to reach 60+ days past due and strategize invoicing accordingly.
  • Key result 3: Prioritize accounts in 60+ receivables according to accounts with highest balance.
  • Key result 4: Cut the total amount of dollars in accounts 60+ past due by 40%.

Each of these is conducive to creating tasks per key result to achieve the overall objective, and each entails measurable, trackable metrics for the purposes of establishing regular progress checkpoints.

Note that it’s important here, as is the case with every OKR, that the objective is broad and ambitious, but that it is still conducive to identifying measurable and trackable metrics. This fundamental tenet is the bread and butter of OKRs and the means by which your finance departments can achieve significant results.

Example 2: Increase Accuracy and Effectiveness of Bookkeeping Department

Small and large businesses alike rely heavily on their bookkeepers to keep things legal, compliant and as efficient as possible. So where gaps in the process start to appear, OKRs can be especially valuable to keep bookkeeping as tight and accurate as possible.

This objective is exactly as ambitious and realistic as you want it to be. Though it is qualitative and a little abstract, it is still conducive to the application of hard data, measurable metrics, and quantifiable results. Here’s what that OKR may look like for your bookkeeping teams.

Objective: Increase accuracy and effectiveness of bookkeeping department

  • Key result 1: Bring in new team members with impressive qualifications and bookkeeping experience within our specific industry
  • Key result 2: Identify and implement industry-specific bookkeeping tools to streamline tax, invoicing and expenditures processes.
  • Key result 3: Establish regular reports schedule to ensure steady production and compliance
  • Each of these key results is trackable and able to be implemented with concrete steps and tasks. As always, note the difference between tasks and key results: tasks are the steps one takes in order to accomplish key results.

Example 3: Create Next Year’s Budget

Every finance department and company head faces the tough challenge of planning for the future. OKRs can be an especially powerful tool toward this effort as a way to structure planning well in advance and implement steps to keep strategies right on task.

Objective: Create next year’s budget

  • Key result 1: Raise $1 million as a seed fund in quarter 2.
  • Key result 2: Meet with every department head to establish budgetary needs.
  • Key result 3: Finalize by quarter 4.

And so on. Each of this is practical and necessary even without a structured plan, but implementing an OKR toward this purpose guarantees regular reports, tracking of metrics and streamlined communication across all affected departments.

Execute your strategy using the best Objectives & Key Results (OKRs) software.

Execute your strategy using the best Objectives & Key Results (OKRs) software.