Finance OKR Examples

Table of Contents

    Finance OKRs (Objectives and Key Results) are a set of performance metrics that finance teams use to measure progress towards achieving financial goals. OKRs are a popular goal-setting framework that helps organizations to align their goals with their overall strategy, communicate priorities across departments, and measure progress towards achieving those goals.

    OKRs are used to set financial targets and track progress towards achieving those targets. These goals can range from improving financial performance, optimizing cash flow, reducing costs, increasing revenue, or achieving any other financial objective that is important to the organization.

    Finance OKRs Focus Areas

    Finance OKRs help connect the everyday tasks of the finance department to the strategic priorities of the organization. These OKRs are mostly focused on the usual operations of the finance department. The focus areas for the finance department are: 

    • Revenue and profit OKRs 
    • Budgeting and fundraising OKRs 
    • Tax and accounting OKRs 
    • Financial Planning and Analysis OKRs 
    • Payroll OKRs 
    • Asset management OKRs 
    • Credit management OKRs 
    • Cost management OKRs 
    • Compliance and risk management OKRs 
    • Inventory management OKRs 

    Writing Effective Financial OKRs 

    When setting Finance OKRs, the objectives should not just be focused on outputs. Instead, they must be more outcome-oriented rather than result-oriented. For example, the output “lower the operational expenses” does not determine if the right solution was delivered or if it brought about positive changes in human behavior. To write financial OKRs: 

    1. Write a finance objective that solves a business problem 
    1. Tie your Key Results with behavioral changes  
    1. Track the changes 

    To set effective financial OKRs, the objective must be aspirational or able to solve a current business problem. Next, tie the Key Results with behavioral changes and track them. For example, a finance objective, “Improve quarterly budgeting and planning,” may have a KR “Reduce the budget approval process in (days).” Here, the KR is tied to increased collaboration, accountability, communication, or implementation of systems, all of them being associated with changes in behaviors.  

    Setting finance OKRs may also require the department to clearly define its Key Performance Indicators. KPIs for the finance department help them look at the bigger picture without losing focus on the overall organizational objectives. In this example, the KPI for the finance department is “Budget variance,” as it measures the actual and planned budget spending.  

    Sample OKRs For Finance Department for Larger Organizations and Start-Ups 

    Finance OKRs usually aim to solve current business problems and align the finance department’s objectives with the company’s objectives. Setting finance OKRs requires the setting of KPIs as well. Some of the sample OKRs are: 

    Revenue and Profit OKRs 

    Objective: Increase revenue in the new market 

    Key Result 1: Lower the operational expenses by 35% 

    Key Result 2: increase subscriptions from 15K to 20K 

    Key Result 3: Achieve quarterly revenue by 15% 

     

    Budgeting and Fundraising OKRs 

    Objective: Gain new donors 

    Key Result 1: Collaborate with 3 like-minded organizations to build partnerships 

    Key Result 2: Use social media platforms and increase brand visibility by 30% 

    Key Result 3: Be active in the local newspapers and magazines. Get featured 5 times. 

     

    Objective: Increase the efficiency of quarterly budget planning 

    Key Result 1: Prepare a budget plan before the 1st of each month 

    Key Result 2: Organize meetings with each team’s managers and ensure the usage of online dashboards 

    Key Result 3: Finalize budget by the 10th of the month 

     

    Tax and Accounting OKRs 

    Objective: Ensure adherence to tax laws 

    Key Result 1: Reduce accounts payable from 10% to 5% 

    Key Result 2: Reduce audit adjustments from 15% to 10% 

    Key Result 3: Conduct an external audit of tax returns 

     

    Payroll OKRs 

    Objective: Reduce payroll inaccuracies 

    Key Result 1: Implement double-checking procedures to prevent errors 

    Key Result 2: Review and audit payroll processes and rectify errors by 25% 

    Key Result 3: Train staff on best practices in a month 

     

    Compliance and Risk management OKRs 

    Objective: Improve compliance training  

    Key Result 1: Develop a comprehensive training program for every department 

    Key Result 2: Review and update the training program on the latest changes in regulations 

    Key Result 3: Conduct employee feedback and compliance audits to measure the effectiveness 

     

    Financial Planning and Analysis OKRs 

    Objective: Improve financial planning accuracy  

    Key Result 1: Implement new data analysis tools 

    Key Result 2: Develop better forecasting models 

    Key Result 3: Regularly review and upgrade the forecasting models 

     

    Asset Management OKRs 

    Objective: Increase asset utilization efficiency 

    Key Result 1: Conduct an asset utilization analysis and identify inefficiencies  

    Key Result 2: Implement strategies to optimize asset utilization by 45% 

    Key Result 3: Monitor and evaluate regularly to identify areas for improvement 

     

    Cost Management OKRs 

    Objective: Reduce procurement costs 

    Key Result 1: Reduce procurement spending by 20% 

    Key Result 2: Develop a procurement scorecard to track supplier performance and increase efficiency in 5% 

    Key Result 3: Reduce procurement cycle time by 15% by conducting market analysis  

     

    Inventory Management OKRs 

    Objective: Improve inventory turnover ratio 

    Key Result 1: Implement an automated inventory tracking system to reduce stockouts, reducing inventory turnover by 20% 

    Key Result 2: Develop plans to sell/liquidate slow-moving inventories in the next 2 months and improve turnover by 15% 

    Key Result 3: Enforce clear inventory control policies and reduce excess inventory levels by 10% 

     

    Credit Management OKRs 

    Objective: Minimize credit risk and bad debt 

    Key Result 1: Establish a clear credit approval criterion, reducing bad debts by 10% in 3 months 

    Key Result 2: Implement a credit monitoring system for customers to reduce credit risk by 5% 

    Key Result 3: Conduct regular credit reviews and revise credit limits to minimize bad debts by 15% 

    Move Towards Success with Keka’s OKR Software 

    When setting OKRs, it is crucial to align objectives on a company level. Aligning them will increase communication and collaboration, allowing everyone to focus on solutions and outcomes – not just results. Keka’s OKR software provides a hierarchy-based framework, translating goals from a personal level to an organizational level. Individuals, teams, or departments, anyone can set clear objectives and reminders to ensure each goal is achieved.  

     Managers or supervisors are updated with each status of objectives, and they can plan the OKR framework with a single dashboard that gives insights into team and department goals. Overall, Keka’s OKR software not only spurs self-growth and motivation but also makes teams more productive. 

     Use Keka for a free trial period. 

    FAQs

    1. How do Finance OKRs differ from other types of OKRs?

    Finance OKRs differ from other types of OKRs as they are tied to finance OKRs to reach their goals. Financial operations include payroll, budgeting, and other tasks that are aligned with other objectives at an organizational level.

    2. What are the benefits of using Finance OKRs?

    Finance OKRs help improve the optimization, communication, and collaboration within the team. Additionally, Finance OKRs can help increase transparency and accountability within financial teams, by clearly defining measurable targets and tracking progress towards them.  

    3. How do you set effective Finance OKRs?

    To set Finance OKRs, first list down financial objectives that are ambitious or solve a problem. Next, break down an objective into achievable, measurable “Key Results.” Finally, track these changes consistently and work toward achieving the objectives.  

    4. How do you track progress towards Finance OKRs?

    Track Finance OKRs by setting a start value or a benchmark. Monitor the progress against set values on a regular schedule and review how they were achieved. 

    5. How do Finance OKRs tie into overall company strategy?

    By setting Finance OKRs, the day-to-day operations like accounting, budgeting, analysis, etc., of the finance department can be tied to the organizational strategy. When the alignment between financial objectives and an organization is ensured, strategic objectives are more likely to be achieved.

    6. What are some common mistakes to avoid when setting Finance OKRs?

    Some common mistakes to avoid when setting Finance OKRs are setting too many Key Results, not including stakeholders in planning, not sharing the KRs between teams, and not tracking progress.

    7. How often should Finance OKRs be reviewed and updated?

    Finance OKRs are reviewed on a more often basis if they are to be achieved in a short amount of time. Such OKRs are reviewed weekly or biweekly. Finance OKRs are updated quarterly but some companies may prefer to update them at the end of the month, depending on the OKRs.

    8. How can Finance OKRs be used to drive accountability and performance within finance teams?

    Finance OKRs are collaborative and facilitate communication, thereby making the team members contribute beyond their usual operational roles. Finance OKRs that enable collaboration, drive accountability and increase performance as people prioritize their goals. 

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