Great Financial Departments Do These Four Things

Relevant financial insights to help you better execute

 

There are things every great financial operation provides:

  1. Timely and accurate accounting
  2. Understandable reporting
  3. Insightful financial planning & analysis
  4. Valuable advice

These four pillars support your entire business, ensuring you have the visibility and insight to make better decisions. Knowing which pillars you need will help you maximize your return on investment in your financial department.

There are four pillars of every great financial operation: accounting, reporting, planning & analysis and advice. These pillars support your entire company, ensuring you have the visibility and insight to grow your company.

Accounting handles your ongoing day-to-day transaction processing activities. Invoices, bills, payroll, bank transactions, these are the financial building blocks of your business and they never go away. Your objective here is to consistently post the right data at the right time. If your data is incorrect you will not be able to make decisions that are correct. Here are some examples of accounting transactions

Reporting turns your accounting into knowledge. The objective here is to keep you informed about what matters. You should not have to work too hard to get good reports and they should be easy to understand. In addition to financial statements we use dashboards and supporting reports to keep our subscribers informed. Data always changes over time so it's important that your reporting keeps up with your needs

Planning and analysis is used to continuously improve your company’s financial performance. This is where we develop a financial plan, set metrics and hold the company accountable to achieving objectives. The companies I have seen grow their valuation fastest were those with great planning and measurement functions.

Advice focuses on helping you grow your business with improved strategy and execution. The objective is to give you confidence that you are making the best decision possible with what you knew at the time.

Knowing which pillar you need will help you maximize your return on investment in your financial department. Processing accounting transactions is fairly commoditized, so you would not require as much investment as you would if you wanted regular advice from a Chief Financial Officer. That advice, however, is based upon good financial data so If you choose to outsource your accounting, your pricing will reflect this chart as well.

To learn more about each pillar, check out our video links below.

This video explains the role each pillar supports at a company. Learn more about each one by clicking a link below.

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