Managing directors, shareholders and key decision makers need to benchmark the performance of their finance teams and put their function under a magnifying glass, according to Tony Kabrovski, business advisory partner at HLB Mann Judd.
Benchmarking finance teams crucial: HLB Mann Judd
Most businesses don’t focus on benchmarking the performance of their finance team, even though their performance can hold the key to future success of the business, according to Mr Kabrovski.
“It is no longer enough for the finance team to just ‘know the numbers’. Real scrutiny is required,’’ he said.
“The speed at which financial information is made available to owners and managers, and the rate that the information is available, is a key performance indicator and can have a marked impact on the decision making process”.
Mr Kabrovski says there are three key issues to consider when evaluating the effectiveness of the finance team. Does it:
• Produce forward thinking financial information to enable proactive decision making
• Identify the key business drivers and measures that matter to the overall success of the business
• Demonstrate and communicate to management the capabilities and capacity of the finance team
“A strong and effective finance team is the cornerstone of a successful business,” he says.
“Many business owners haven’t articulated their expectations of their finance teams, or questioned the information that is made available, and the time frame that the information is provided in.
“Steve March, the chair of Balfour Beatty, had it right, when he said ‘the two most compelling attributes of a finance director, are nothing to do with numbers – they are an absolute fascination with the wealth creation process and an extremely high emotional intelligence’ – they are attributes that more CEOs and shareholders should be demanding of their finance team,” Mr Kabrovski said.