In Business spending money is just as important as making money. Do you do a good job justifying how money should be spent for your department? If you work in Finance, do you integrate your actions throughout your organization by helping managers streamline spending requests?...Would other managers agree with your answer? Ask yourself how Finance and the rest of your organization can work better together to make more educated financial decisions that are in line with business needs. It is important to break through the Finance Departmental Silo to make your business more productive and profitable.
The first step to breaking down this silo is to understand what Finance is and what to expect from the people that work there. In simple terms, other departments make investment requests and the finance group reviews them to determine what makes sense for the business and what doesn't. A lot of time is often wasted because managers outside of finance do not understand the terminology and expectations of the finance group. There is a common intimidation that exists due to fear of asking “stupid questions”.
Remember, Finance is a service organization. The service it provides is the gathering, reporting & interpretation of data: financials, budgets, investments and expenditures, as well as economic projections. The Finance group should create and provide financial models to ensure a consistency for decision making in the organization. In addition to financial modeling, it is their responsibility to structure financial resources to meet business demands for investment in projects or support negotiations where investment is required.
Here is what you should expect from your finance team. Be proactive, and direct; ask for the help you need.
Finance Professionals should Understand the needs of their organization, not just their boss.
Every area of the company spends money; decisions are being made every day. Just because money is budgeted does not mean it is a good investment. Finance professionals can help everyday decision makers ensure their thought process is in line with the company’s benefit in mind. The best way to do this is by learning the different areas of the organization, talking with people and explaining to them what finance looks at verses what other departments look at. Establish if there is something finance can do to help you justify your spending, capital requests, or pricing in the case of sales negotiations.
Finance Professionals should Create useful tools and ensure those who use them understand them.
Whether it is a capital equipment purchase, a contract price negotiation, an equity investment in a joint venture or preparing an operational budget, the finance department has the ability to slow down the organization or make it run more efficiently. As long as they create useful tools and properly train people to use them, they will be credited with making things run more efficiently. Make sure you are using the right tools for your financial proposals and decisions.
Financial Professionals should Empower people in their company to do an analysis before they bring things to finance or executive committee for approval.
It happens too often that finance professionals are blamed for sitting in their office, looking only at numbers and not understanding the business. The reality is that non-finance managers may not understand the requirements of the business. It is the responsibility of the finance department to train non-finance managers in advance. A partnership should be created between finance professionals and those who seek financial approvals. If you proactively work together, people will be more likely to seek out more justifiable approvals, they will know what the company is requiring and will be more likely to ask for the finance department’s support to help them structure investments. Finance professionals are the gatekeepers, not the roadblock; it is their responsibility to provide this support to the organization.
Finance Professionals should Align themselves with Executive Leadership.
It is important that finance professionals understand the strategic plans of the executive team, and ensure that financial services and messages to the workforce are aligned. The more informed this group is, the more helpful they will be to other managers, and to streamlining bottom line results.
Finance Professionals should Proactively conduct external and internal research.
They should know what is happening in the company’s industry and how deals are being structured. By doing an analysis of pricing and costing structures they can help determine how competitive their organization is in comparison to others. They should research and report on economic trends, as well as share the results throughout the organization becoming a greater resource to the company. This type of work should not take place in a bubble but should be a collaborative effort with other departments in the company.
Financial Professionals should Track their results.
How many capital expenditure requests were submitted vs. approved? What are the statistics for all other aspects of financial approvals? This analysis will help guide the financial team to areas where they need to focus on training and providing better tools. Executive management and other non-finance managers should view these reports as a tool to push their finance group to be more of a service organization, requesting training and generating the dialog needed to streamline processes for better decision making.
A majority of business managers do not have financial backgrounds, but all are responsible for making or at least requesting financial decisions to be made. These tips are designed to help facilitate dialog, ensure requests get approved and develop financial accountability at all levels and disciplines.
Written by Lisa Woods,
President ManagingAmericans.com