Adopting best practices consistently drives financial performance—cash flow, business value, stability, and personal wealth.
Your CFO Solutions provides support for the entire management team, not just the business owners and executives!
Our best practices for management accounting service includes:
- Evaluation of the business end to end
- Establish financial forecasts and performance benchmarks
- Identify steps necessary to achieve the objectives
- Measure the performance and take the necessary action to adjust activity to meet the goals, or take advantage of new opportunities
- Model the business from a financial perspective to project the outcome of key investments in people and / or equipment.
The primary benefits are:
- Clearly defined goals and objectives, first from an operational standpoint, then expressed in financial terms as well as other key performance indicators
- Buy in from the whole management team by understanding the business and goals and objectives
- Ability to communicate goals and objectives to all employees
- Establishing BEST practices to enable the company top excel
- Improved performance leading to short term cash flow AND ultimate value of the business entity
Strong Businesses are Built Through Planning, Measurement and Adjustment
Simply manufacturing a great product or providing a top-notch service is not enough to ensure a successful business. Strong businesses are built through planning, measurement and adjustment. While many CEOs understand the importance of those elements in other areas of the business, such as product features and marketing, the need to apply these same principles to financial planning and management may not be as obvious.
Strong Companies Require Strong Financial Leadership
The core functions of a CFO have evolved, and a company looking to build a solid foundation on which to grow requires a capable, forward-thinking financial leader. Your CFO must be prepared to model your business from a financial perspective, analyzing the projected outcomes of key investments, including:
- Hiring key players
- Increasing your workforce
- Purchasing or leasing equipment
- Expanding your operations into new territory
- Expanding into new products or services
If you had an expert doing that sort of modeling for your company today, he or she would almost certainly tell you that the investment in this type of financial guidance would bring positive returns.
Establishing Financial Best Practices Helps All of Your Teams Excel
No employee or department operates in isolation. Inefficiencies have an impact that reaches far beyond the individual employee and specific task. Small unnecessary expenses add up, particularly when they occur in areas where a task is repeated or supplies are continuously replenished.
Of course, defining best practices requires information–for those norms to benefit your company, you must establish that they truly are the best way of achieving a particular goal. Making that determination means following a series of investigative, analytical and developmental steps, including:
- Thorough evaluation of the business from end to end
- Establishment of financial projections and performance benchmarks
- Identification of steps necessary to achieve objectives
- Measurement of performance
- Adjustment based on measurements and/or evolving opportunities
Of course, working through this process and implementing the plans and procedures that emerge from it will cause some growing pains. The success of this type of company-wide standardization and improvement depends on buy-in from the entire management team and beyond. Achieving that buy-in is a two-step process:
1. The management team must be fully educated regarding the business goals and objectives and how the new practices and procedures will allow you to meet those goals.
2. The management team must be willing and able to pass along appropriate information to their own teams in a way that allows those teams to understand the value of the changes.
The High Value of Best Practices
While it is important that your teams believe in the specific value of the changes they’re being asked to make and have at least a general understanding of why they’re being asked to implement new practices, a high level understanding provides a strong starting point at the management level.
To make the most of best practices, you and your key personnel must recognize that adopting and consistently applying best practices drives your company’s financial performance in all respects: cash flow, stability, business value, and even the personal wealth of the principles. Of course, each of those aspects of the company’s financial performance impacts others. For example, projecting and managing cash flow creates stability, since you will be able to predict periods in which you may require some financial buffer and prepare for those periods during more lucrative times.
Your CFO Solutions Can Help Establish and Implement Best Practices
Taking the Lead for Companies without CFOs
Not every company has a full-time need for a CFO, but every company has at least an occasional need for strong financial expertise and guidance. Evaluation of existing practices and creation of standardized best practices is one of those situations. If you don’t have an in-house financial executive, our professionals can fill that need on a part-time or short-term basis.
Working with Your Financial Team
Sometimes, the best place to look for a detailed analysis of your business practices is outside. It is difficult to objectively assess what has become routine, and insiders can be blind to breakdowns in processes, redundancies and inefficiencies.
Our financial professionals can guide you through every stage of uncovering and implementing the best practices for your business, from the initial evaluation through educating and obtaining buy-in from your team.
The sooner you take the first step toward defining your best practices, the sooner you’ll begin to see the financial and other benefits those processes create. Contact us right now to learn more about how we can help.