Leveraging Technology to Prepare for the Future and Support Succession Planning For Finance Teams

Every organization, no matter the industry or size, is impacted by the effects of employee turnover, retirement, transfers, and long-term leave. We’ve all been there. It’s time to submit a quarterly financial report and suddenly you experience first-hand the pain of poor succession planning -- there are nuances to the report that only the previous team member understood, and now you’re left scrambling to get the report turned in on time, and accurately. Or perhaps you need a specific file, but it was a past coworker who knew exactly where that document was and how to update it. Or maybe you are still relying on manual processes and workflows that must be allocated across the team when somebody leaves, increasing the workload and reducing productivity for current employees.


Succession planning is defined by Investopedia as  “a strategy for passing on leadership roles to an employee or group of employees”. Also known as "replacement planning," it ensures that businesses continue to run smoothly after a company's most important people move on to new opportunities, retire, or pass away.”But succession planning is not just for top executives; when your department operates with a small or lean team, the absence of just one person can be detrimental. The AARP estimates that roughly 10,000 Baby Boomers reach the age of retirement every single day. It therefore makes sense to include employees across all levels and departments in the organization in the succession plan. When implemented as part of a broader organizational strategy, succession planning supports retention of existing employees and ensures critical institutional knowledge is preserved in order to reduce the negative impact of turnover. 


Your organization’s succession plan will be unique to your own needs and should align with your strategic goals in order to ensure the continuity of critical business tasks and processes. Finance departments, in particular, have unique roadblocks and strategies they need to consider in their succession planning. or example, consider: What tools will you use to conduct the all-important annual financial audits; Who will be responsible for making payments on outstanding debt; How will internal and external team members access critical data and documentation they need to do their jobs successfully? Debt and lease management software can help finance teams mitigate these risks, as well as enable the organization to operate more efficiently.


Read on to learn some helpful tips that can help you leverage technology and prepare an effective  succession strategy: 



#1: Assess known future changes and risks

The first step in succession planning is to look ahead at any upcoming departmental changes and risks you already know about that would affect the continuity of the department’s operations. An example of a future change might be the retirement of a long-time team member who was responsible for verifying, paying, and posting all outstanding debt payments, and a potential risk could be the team members left behind not knowing when payments are due and who to make the payments out to. This situation could lead to late or missed payments all together or debt payments being made to an incorrect bank. 


To-Do: Before developing your succession plan, identify competencies on the teamas well as organizational gaps across levels; also go ahead andlist future goals and challenges as clearly as possible. An emergency succession plan can  also be a good idea since employees might suddenly become illorapply for an unplanned extended absence from work, for example. The best time to plan for an emergency is when you aren’t facing one. 


How Technology Can Help: A cloud-based solution means that employees can access key documents and information on-site or remotely, plus you will have a history of payments and audit trail to reference. Further, a digital solution can  help you manage your financial records and  assist with the tedious tasks, such as payment reminders and milestone notifications. These types of features can help you and your team better manage any additional workload that may stem from  a team member’s departure. 

#2: Identify key positions, requisite skills, and candidate sources

As a team, determine which positions are critical to the department’s continued operations as well as the requisite skills and experience required for successor candidates. If your finance team is small, with many team members wearing more than one hat, it’s important to understand the entire breadth of their day-to-day responsibilities. For example, a Debt Manager of a small city often is responsible for more than just managing the city’s debt, they may also be responsible for revenue forecasting and managing the city’s investment portfolio. 


Next, consider how you would source candidates for the positions. You may already have an incredible backlog of talent in your organization, but some of the most promising candidates haven’t been identified yet. Unfortunately, the challenges of day-to-day operations can overshadow the potential that is right in your midst. If you want to look internally, consider making a short list of candidates who are already qualified or could be qualified with some additional training should the need arise. If you need to look externally, determine how, when, and where you would source the candidate. 


To-Do: Get creative. There are plenty of ways that you can get talented employees ready to step into key roles. You might pair them up with a mentor or give them some special projects. But, don’t be afraid to think outside the box and get inventive. Maybe there’s a new digital training program that is relevant to the role. Perhaps working on a cross-functional team will help build some necessary competencies. Or, there might even be an opportunity for the employee to “fill in” temporarily in specific roles as they are being trained. 


How Technology Can Help: When evaluating and choosing a technology solution to help you manage your financial records, it’s important to consider a solution that offers unlimited user roles and controlled access to the system. Keep in mind too that younger talent may be looking for career opportunities with organizations that do leverage technology and more modern tools and systems.

#3: Ensure adequate coverage

Determine how to ensure adequate coverage during a period when  you experience a staff shortage and how to quickly onboard the successor candidate. When possible, it is ideal to allow the successor candidate time to work side-by-side with the individual they are replacing. However, in situations where this is not realistic, you may consider cross training your staff to assist in the transition, bringing on temporary help, outsourcing specific duties to a third-party provider, or investing in a technology solution to perform certain key tasks. 


How Technology Can Help: When a critical team member is no longer available to perform detailed and time sensitive tasks, relying on a software to perform these projects can ensure you have adequate coverage and that these duties are being  completed. Consider which tasks are particularly time sensitive and require a lot of heavy lifting from an individual, such as preparing amortization schedules or detailing financial notes, and look for a software who can provide assistance in these areas. 

#4: Document extensively to preserve institutional knowledge

Documenting learnings related to industry best practices and standard business practices is an essential step in succession planning. Effectively capturing such learnings means organizations do not have to reinvent the wheel every time, helping them easily train potential successors to get job-ready quickly and efficiently. The result: significant reduction in the learning curve for critical positions and the need for creating extensive and formal training programs.


To-Do: Create a digital repository comprising strategic and operational plans, annual/quarterly calendars of business activities, budget and audit practices, ROI sheets, etc. that act as reliable reference points for succession planning and training.


How Technology Can Help: Look for a software solution that can track monthly and yearly key milestones with automated reminder notifications. In addition, using a reporting method embedded in a software can help you create a standardized reporting model to serve as a reference point that is consistent and not plagued by the nuances of scattered reporting methods. 

#5: Share the plan with employees and follow through

Ultimately, employees like to know that their company has a plan in place to deal with sudden changes in leadership or other key positions. It not only gives them peace of mind but also some insight about potential advancement opportunities. When you are transparent with your succession plan, employees know what skills and competencies they need to develop in order to be considered for future career options. 

In today’s uncertain times and with the impending retirement wave, having a succession plan is critical to ensuring business continuity. Finance teams especially are increasingly being asked to do more with less, highlighting the importance of leveraging technology to automate manual or repetitive tasks, provide access and transparency across the organization, and document processes and histories.


DebtBook is a powerful, easy-to-use debt & lease management software that can help your team drive efficiencies, ensure continuity across the organization, and effectively plan for the future. With DebtBook, financial reporting and debt and lease management becomes standardized, drastically reducing the nuances that decentralized departments and employee turnover can create. As a cloud-based platform, DebtBook serves as a single source of truth for you and your team. 


Tyler Traudt
Founder & CEO
Tyler began his career in the Public Finance Investment Banking group at Citigroup in New York before becoming a financial advisor at a top 10-ranked firm in the Southeast. He served as financial advisor for finance teams in local government, higher education, and healthcare for nearly eight years before founding DebtBook to bring modern software to debt and lease management.
About DebtBook

DebtBook makes powerful debt and lease management software for governments and nonprofits. You spend less time finding and fixing spreadsheets, more time leading your team forward with confidence.

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