Neglecting Control will Stifle Growth

Jul 21, 2016
3 min read

Too often when Finance professionals start talking about implementing controls and compliance colleagues begin to glaze over or worse still fear that it’s the accountant saying ‘no’ again. Finance can be viewed as the necessary overhead that stifles and slows getting business done. The opposite, however, should be the case – a strong control environment can enhance your growth potential and speed up the process for closing business.

Business Partnering

Invite your aligned Finance business partner to your department meetings, ask them to present to the group, and ask them to contribute ideas that will help you achieve you objectives.

Why, they’re just accountants ? What do they know about operational matters, sales leads and IT, for instance ?

Well, in reality the answer is far more than you realise. Your business partner is your eyes and ears into the rest of the business. They see and know every transaction that runs through the organisation. They have more insight than any other part of the organisation into what is really happening and the impact it’s having its ability to do business.

By embracing Finance and sharing your knowledge, your objectives, your problems, your needs they become part of your team and can apply their insight in a valuable way to you, your team and the overall organisation.

Investment Governance

Oh no – it’s that word governance. It strikes fear when uttered – but you're better of replacing it with opportunity. Investment Opportunity.

Most organisations exist to make money, to increase the earnings of its shareholders and achieve growth in its overall value. The role of the Finance department is to safeguard the assets of an organisation and to facilitate its growth in a safe manner. Sounds boring, right ?

You’d be wrong – by sharing its unique insight Finance is already safeguarding the organisation by aiding top line grow, providing information that allows informed decision making and running an effective business planning process that manages risk and objectives.

By putting rigour around investment decision making, Finance is safeguarding the business assets through controlling who can spend how much on what. It’s not saying “no!” it’s asking “why?”. What is your expected return on investment from doing this ? How does this investment align with achieving the organisation’s goals ? How quickly will this outcome be achieved ? What is the opportunity cost of not doing it ? And does doing it mean you can't do something else important ?

A modern Finance function can help answer all of those questions, and more. And it’s not just the about investments you’re going to make but also the investments you’ve already made.

Smart Procurement

Part of Investment Governance includes the need to control how the organisation engages with suppliers and procures goods and services.

Transparent, unambiguous spending limits and budgetary accountability are essential – so ensure that the right people are authorised to commit the organisation to the right levels of spend on the right goods and services, from the right suppliers.

The right supplier is broader than just the cheapest supplier or the one down the road who you always use, or the one that can deliver tomorrow. There are a number of factors to keep in mind beyond price and quality – such brand reputation and data protection. Likewise, building a partnership relationship with key suppliers can be mutually beneficial.

Finance should support this process through to negotiation and future testing of supplier suitability that drives value into the organisation – value that can then be invested elsewhere to drive the corporate strategy.

Internal Audit

Through review and testing of processes, systems and data, the Finance team has the opportunity to carry out health checks on any part of the organisation.

This means the leadership of the organisation can use Finance to identify the things that are working well, disseminate the success stories and continue to monitor performance. Likewise, the leadership will want to identify the areas where risks lie – report them and work with the business process owner to fix them.

Simultaneously, as part of the review, there will be opportunities that will become apparent as Finance and its business partners dig deep into the what’s, the why’s, the how’s etc. that will again lead to an investment decision that will drive growth – but one which, this time, will be fully informed, current and making a positive difference because Finance was helping the organisation stay in control.

Green Drum Consultancy

Empower your Finance team to be RELEVANT again by giving them the tools to become 21st Century Finance partners instead of staying stuck as 20th Century accountants.