This is part of a series of posts by Akvo staff members called “Reflections and perspectives”, timed to coincide with the publishing of the Akvo 2014 Annual Report.
During 2014 there were three main events that created some challenges for the Akvo finance team.
First of all, by the end of 2013 we decided that it was appropriate for us to become VAT-registered, due to changes in our business model and our sector. To make sure we did everything properly, at the beginning of 2014 we underwent an extensive audit by our accountant at Lentink en de Jonge. This showed that we made the right choices and we’re heading in the right directions. Like true accountants, they also provided us with some suggestions for improvements in our administrative and financial processes.
Secondly, we continued growing. We realised more income than the year before and the number of staff also increased.
And thirdly, related to this, we expanded more into different regions by decentralising part of our work from Amsterdam. This resulted in setting up new several Akvo entities in different places and transferring some of our staff into these new entities. For the Amsterdam finance and operational admin team, this meant that sometimes we had to look at the finances for all the separate entities and sometimes we had to look at the bigger picture of all the administrations combined. The challenges also varied a little bit in the perspective that we were using.
The biggest challenge was getting our information more up to date and more complete. Before 2014 we reported on a quarterly basis and calculated the hours worked by staff month by month. We started to realise that this could create blind spots that prevented us from spotting mistakes quickly and could lead to unhealthy operations. We also needed to really think about which metrics were the most important for us to have the best picture of the current situation of Akvo. We didn’t want to get lost in all the data that we can collect, but make sure that we collect the data that we actually want to have.
For the regional hubs it was a big challenge to make sure we structure everything in the best way. It is a little bit in Akvo’s DNA to start running first and check if your shoelaces are tight later. With the size we are now, that is something that needs to change a little bit. So before setting up a new entity in a country, a lot of thought is needed regarding local tax laws, staff situation, regional operations, etc.
Another challenge was to find the right balance between independence of the hubs and conformity. We are still in that process of wanting to give local entities their own freedom and power to make decisions, but also wanting to protect the Akvo brand and quality that comes with it. Regarding finance, accounting and admin, the more unity we can realise in the way we account for what we do globally, the easier it is to work closely together and help each other out.
Overall for 2014 I believe these were the most important lessons learned:
To measure is to know
In the Netherlands we say ‘meten is weten’, which basically means, if you want to know something you have to measure it. Now and then we tend to steer the organisation on gut feeling or experience, which is always bound to many constraints. In my opinion, it is the finance team's job to create objectivity by providing as much correct operational data as possible to minimise uncertainty.
Real time operational data is essential
We always tell our partners how important it is to have up-to-date information on what you are doing in order to make good decisions. We need to make sure that we define the operational data we need to steer our own operations in order to practice good business. That means recording hours on time, processing invoices on time and keeping a sharp eye on the income portfolio. This data needs to be evaluated at least on a monthly basis in order for it to still be up-to-date.
A formalised process helps when opening new offices
Every country has its own specific environmental factors and requirements. However, we have acquired some fine experience in setting up new entities in different regions and have gathered skillful partners who can help us assess issues carefully before we get started. In 2015 we should combine all this in a more formalised procedure, which will minimise the chance of errors in operational and administrative processes.
The work we did during 2014 to grapple with some of the issues thrown up by our growth into new areas is standing us in good stead for 2015 and beyond. Within Akvo we will all have to work together to constantly have a precise view on the current status of the organisation. We have much more to do, but the new systems and processes we put in place will give us a strong foundation moving forward.
Stefan van Heukelum is finance & operations officer, based in Amsterdam. You can follow him on Twitter @svheukelum.