3 minute read

What is a finance function?

Are you harnessing your finance superpower to elevate your business? You may doubt whether you have the knowledge (or perhaps even desire) to look at your finances beyond your annual accounts and tax return compliance.

As the potential fear of the unknown diminishes, clients feel much more in control of their finances.

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What finance goals should I have for my business?

Every business is unique, with their own individual values, industry specifics and, of course, size.

When it comes to managing your finances, your structure and tools should be individually crafted and chosen to not only painlessly fulfil your obligations but to thrive in supporting your business’ ambitions and drive its growth.

By taking even small steps to stop and consider how your finances can add value to your business, you can bring great benefits. However, when you feel ready, I would advocate reviewing your finance set up as a whole, as the potential opportunities are boundless.

When I work with my clients, there are four goals we always focus on –Structure, Efficiency, Visibility and Strategy.

Let’s take a look at each in turn:

● Structure

It is really important to start by looking at how your finance activities are being run. This is what we call your ‘Finance Function’.

We all have a Finance Function – small or large, it is the resources you use for your finance tasks.

The Finance Function may just be you! Doing absolutely everything, but the fundamentals are still the same.

Think about who and what. For example, who does your day-to-day accounting? Is it working well? Who is giving you visibility into your numbers? What system do you use? Is it fit for purpose?

Consider where finance sits in the structure of your business too. Is it involved in the decision making or treated as an afterthought? Every business is unique, but no matter who performs the activities, the concept of finance is integral.

● Efficiency

When your finance processes are efficient, you can generate not just time savings but cost savings too.

Think about what you are doing, why you are doing it, and how you are doing it.

I love a vision/mood board when I am decorating at home, and I find using this type of visual representation is really useful when capturing activities in your business. Perhaps you already use mind maps, and this is a great way to use them. Essentially, jot down every finance activity your business is performing on a daily basis and take a view at how each one looks and feels. You could even try ranking them in order of efficiency.

The other way to approach this is to consider each of the traditional areas of your accounting and bookkeeping and detail all of your tasks under each subject area. For example:

• Accounts Receivable

• Accounts Payable

• Bank & Cash

• Taxes, e.g. VAT & Corporation tax

• Statutory accounts

• Payroll

You can apply the same questions, considering your answers and ranking your list into an order of priority.

● Visibility

Once you start making improvements, your efficiencies will gain momentum very quickly. I see this with my clients all the time, it feels like one day, we are climbing a mountain, and then suddenly, it all becomes easier, expanding into more and more time and cost savings.

Once you are confident in the accuracy of your numbers and are benefiting from efficiencies, you will be able to use your financials to provide reliable and valuable insight. There are so many ways you can use this insight to benefit your business - you could analyse cost changes, for example, margins, key customers, your performance over time, the lists goes on.

I strongly believe that by turning the way you think about finance into an opportunity for discovery, the numbers will not only assist in providing you with the visibility to answer your questionsthey will talk to you before you have even asked the questions.

● Strategy

I am often asked by clients whether they need a strategy, and the answer is absolutely yes.

Forecasting the future and building budgets to support a strategy will not only help you to keep on track and in control, they will highlight when things are going off course. By doing this, it will empower you to take steps, or make changes in direction ahead of time - instead of when it’s potentially too late.

When you have crafted a strong Finance Function that is reflective of the energy and passion you have put into your business, you will have your very own finance superpower at your fingertips. ■

Coach www.neonconsulting.co.uk

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