One of the most underrated skills as a finance team is organization. Now I'm not talking about org charts or hierarchies. I'm talking about file organization [Note: I don't mean physical files. I mean electronic files. This is 2018 after all.) This is such a simple, but important skill to learn.
How often do you or your team ask one of the following questions?
- Where is the 'XYZ' file?
- Which copy of the file should we be using?
- What's the difference between these versions?
I bet if you're reading this then you have come across all of these issues way more than you should be. As a manager or CFO, it is critical to eliminate these bad habits from your organization, especially in finance where there is high turnover for positions. This means it is crucial to stay organized to ensure that your team is as efficient and effective as possible.
I've worked for many multi-billion dollar global corporations in my career and the one commonality each company shared was how disorganized they were when it came to their files. [To be clear I'm talking about electronic files, not physical ones. This is 2018 after all!] Every team I've worked on has wasted countless hours stumbling to find the files they needed, combing through files to figure out what changes have been made, and talking to countless people to figure out which copy of a file to use. (Hint: It's not always the one called 'Final'!)
Luckily, through these experiences, I have come up with 3 simple tips to help you and your team get your files under control.
Understand your overall structure
Have a file naming system and stick to it
Add comments everywhere
1. Understand your overall structure
Before you proceed any further, you need to understand how your organization or team is structured. Start with a single 'Finance' folder for your entire company and add sub-folders for each main finance group.
Ex. Finance
- Sales
- Operations
- Treasury
- Accounting
Next, take some time to understand the needs of each group. Under each of these groups you will probably want to use the following breakout:
Ex. Sales
- Actuals
- Forecasts
- Ad Hoc/Miscellaneous
Actuals will hold your month-end close files. Forecasts will obviously be the location for your annual forecast and any other mid-year updates you may do. Ad Hoc/Miscellaneous is the place for everything else that doesn't fall into the first two categories.
2. Have a file naming system and stick to it
Now that you have a nice clean structure for your files it's time to fix your messy file names. My advice for file names is to be as descriptive as possible. If you have a file that you know will be going through multiple iterations then I suggest the following format:
'Descriptive File Name v1.0 (Description of changes made since the last version)
No more calling files 'Final Final Final'. Now you'll have a clear record of every file and what was changed since the last update. This is critically important towards the tail-end of forecasts where you may have to make a bunch of quick last-minute edits. Just update the version number and give a brief description of the changes made. You can either override the description each time or create cumulative descriptions like in the example below:
- '2019 Annual Forecast v3.0 (Adding merit increases)'
- '2019 Annual Forecast v3.1 (Adding merit increases + bonus)'
- '2019 Annual Forecast v3.1 (Adding merit increases + bonus + benefits update)'
[Note: I like to put old versions of files into their own folder to keep them out of the way once they are no longer relevant.]
On a side note, I will generally reserve updating the first digit in the version number for instances where I make significant changes to the file itself. This gives me a good idea of what I can expect if I'm going through old copies of files.
Another great example use case for naming this way is for official submissions or presentations:
- '2019 Annual Plan v3.0 (Presentation to CFO)'
- '2019 Annual Plan v3.1 (Updates from CFO Review)'
- '2019 Annual Plan v3.2 (Official budget submission)'
Getting into the habit of using this naming convention will help you stay organized and make finding the right file a breeze.
3. Add comments everywhere
Now that we have a file structure and new naming convention, we are ready for the final piece of the puzzle. While it is great that we now have descriptions of changes in the file names, that doesn't necessarily mean it's easy to see those changes in the file.
The way around this is to be liberal with your use of comments in files. Comment on everything! Seriously, if you're in Excel, make notes about every cell possible. Explain where values come from, the logic used in a formula, what edits have been made to the values and why, etc. Too many times have I come across a formula or hard-coded cells with no note about where the number came from or the logic used to get it. That is exactly how you end up stuck or confused. This is 100% avoidable by just taking the time to make comments.
Don't be afraid to link cells or files together either. Excel makes this super useful with the shortcut 'Crtl + [' which will jump you to that exact place you're referencing, even if it is in another file.
By implementing one or more of these tips I hope that you can start to push your finance organization into a new direction. These instructions should improve your team's overall effectiveness by cutting down on wasted time.