Top 10 Guide: Marketing your Start-Up and SME
Immerse yourself with international brand man and entrepreneur, Graham Dodridge who shares his insight and experience.Download Now
To some people Finance is the most boring subject in the world. To others the most confusing. But here in the finance department we love it. We see it as the vital key to business success.
Generally we all have an understanding of our own financial matters but with company finances everything becomes more complicated.
We must remember that a company’s financial performance has a direct impact on the financial situation of its directors, managers, employees and suppliers.
But what actually does a finance person or department do, to help a company manage its performance?
A key element is to have a good understanding of the company’s running costs, resources, and funds available. This is achieved by keeping detailed records, and analysis on a regular basis.
Producing monthly management accounts is essential to show integrated monthly cost, revenues and profit figures. Together with cash flow reports, it is easier for decision makers to understand in which direction to steer the company. Relevant action can be taken to either improve business profitability or to address weaknesses. Every company, whatever the size, needs people to understand that procedures of producing monthly management accounts should be implemented as it provides both informative and planning tools for the company.
But it is not only the numbers that matter in finance. Although they are the most obvious element, we can’t forget about building good business relationships with our customers and suppliers.
Paying your supplier on or before agreed payment terms will show that you appreciate their service and will build a picture of being a trustful company. In most cases they then prefer to work with you over other companies and if you have last minute projects to do, they will find resources to help you. Perhaps if difficult times were to hit your business in the future, your suppliers might be able to give you a bit of leeway.
In the same way that your supplier is happy to be paid quickly, there is no feeling quite like that of being paid on time! But mistakes happen and invoices can go astray, which means you need to put your credit control hat on and deal with the situation. Most accountants will feel uncomfortable asking their customers to settle an invoice, but there needs to be an understanding that the role of finance is to have control of money inflow and outflow. On the other hand if your customer has over paid you, let them know straight away and don’t wait until they discover it themselves. Ask them what action they want to take. This will save you a great deal in the future to reconcile customer accounts without hassle, not to mention the tons of emails and phone calls to get to the bottom of it.! You will give the impression that your company is honest and is not taking advantage of someone else’s mistakes.
One more thing to remember is that the finance department is there to support colleagues who may face, for example, enquiries from HMRC or other money related institutions. Support offered to your employees through financial knowledge and experience is always appreciated.
Finance is the art and science of managing revenues and resources for the advantage of the company and in so doing, it is also a great business coach, facilitator and stress reliever.
Margaret is a vital part of Silver’s finance team. A concise, articulate and fair approach ensures Margaret is not only a popular member of the Silver crew, but is highly regarded by Silver suppliers and customers alike.