The quality of your Financial Control and Board or Executive Committee Reporting Processes has always been important, but the continuing impact of covid-19 and ongoing conflicts in the world has made it critical!
Businesses were forced to rapidly adapt to mitigate the impact of the disruption caused by the pandemic.
Keeping their finances strong has been the top priority for the majority of businesses. For many, cashflow management and forecasting has required urgent attention, to maintain liquidity & even their survival.
For most Small and Medium Businesses, understanding How to optimise Financial Control in their Business can be challenging at the best of times.
Entrepreneurial businesses are commonly started by people with a specific expertise, whether technical, service, or trade based, the owners will, understandably, tend to focus initially on their area of expertise, and as a result, as the business grows, the level of attention to Accounting & Financial Control may be overlooked. Could this be you?
This program was designed to take your Financial Control and Reporting Processes to a new level. Whether you fit into the above category or have been managing your finances and reporting fairly well, the impact of Covid-19 requires businesses to adapt their existing financial frameworks to deal with a much more volatile environment.
Your Financial Resilience will need to be stronger than ever, so selectively implementing the radical new business models and practices that many businesses around the world have adopted and are achieving significant benefits from, and which are revolutionising the way companies operate gives you the tools to achieve that.
In this program we will share these with you and work with you one-on-one to implement the elements that are relevant for your business.
How to Optimise Financial Control in Your Business
Financial control has 3 elements:
- Financial Management and Reporting,
- Key performance indicators (KPI’s),
- Financial Resilience – Post Covid-19 (including Cash Management and Forecasting)
So, let’s look in more detail at those 3 elements.
- Financial Control and Reporting
Having a good grasp of your businesses financials and getting regular monthly updates in the form of a monthly Executive “Business Performance Report”, with a section dedicated to financial performance, is critical to the ongoing success of your business.
The Monthly Executive Business Performance Report pulls together all the relevant information for review by the board or executive team in their monthly meetings.
A good report should contain all the information necessary to facilitate decision-making at the senior management level.
When a potential investor is considering acquiring equity in your business, or you seek a debt facility with your bank, that’s what they will want to see. And not just the latest numbers, they will probably want to see them for the past two years, depending on how much money you want them to invest or lend to you.
Your senior Finance Person will be responsible for preparing and presenting the report. If you don’t have an experienced financial expert whose skills & experience are at the CFO level, you might want to consider hiring an outsourced virtual CFO. This can be a valuable and reasonably priced alternative to have those high-level skills in your business at a fraction of the cost of hiring an experienced full-time CFO.
- Key Performance Indicators (KPI’s)
The executive team should agree the high-level KPIs to be included in the monthly performance report.
The KPI’s should:
- draw together and integrate management information.
- reflect the critical success factors of the organisation and provide a high-level aggregate overview.
- provide a reliable and easy-to-use base through which to provide information that the executive team finds meaningful.
- be appropriate to a challenging management environment and be reviewed regularly.
Your business’s KPI’s will depend on the type of industry you serve and the nature of your business.
For most product and service businesses, in addition to any Industry Specific KPI’s, the monthly executive report should contain a maximum of 6 to 8 high level KPI’s.
- How to build Financial Resilience in your business
Strong Financial Resilience in 2023 will require businesses to adapt their existing financial frameworks to deal with a much more volatile environment.
There are 3 key elements in creating financial resilience in your business post Covid-19:
- Cash Management and Stress Testing
The current environment requires companies to have strong capabilities for understanding their current cash position and how much cash they may require in the future.
Even for cash-rich companies, the potential benefits of accurate cashflow forecasting are numerous.
All Businesses that the owners or senior executives believe could potentially be at risk, need to take action to rapidly reduce costs and preserve cash, without taking unacceptably high risks.
They also need to adopt cashflow models for uncertainty and disruption into their budgetary and financial management cycles.
To implement the above quickly, medium and large size businesses are forming Agile Multi-Disciplinary teams, including talented people from functions such as IT, Admin, HR, Legal, Media and Communications, Finance and Operations.
Small businesses and mid-size businesses with limited manpower resources should consider bringing in a financial expert to set up the Cash forecasting and Agile Process and train internal people to manage it ongoing.
Financial stress testing is about identifying the areas of vulnerability in your business so that alternative plans can be tested to address the vulnerability in a timely and proactive manner. This will allow you to determine the length of time your business can trade under different scenarios.
- Liquidity & Financing
Ongoing uncertainty over demand and supply chain resilience is creating liquidity pressure across businesses.
Your Team will need to evaluate funding strategy options in order to meeting your funding needs in the time available.
Engage regularly with other key stakeholders on interim funding and payment alleviation options, including those supported by government.
- Financial Crisis Response & Contingency Planning.
In the unlikely event that insolvency looks unavoidable, carry out contingency planning to decide the insolvency strategy most likely to protect value for creditors.
Directors must understand their duties in a financially distressed situation, potential personal liability and disqualification risks should be considered.
Your Next Step
If you believe that the Financial Control Post Covid-19 Program might be right for you, to upgrade your financial management & reporting processes and incorporate the new financial resilience, cashflow forecasting techniques and agile methodologies into your business, you can book a free 20-minute call with me personally, so we can explore whether it is a good fit for you and your business at this time.
Click on the button below to book an appointment in my calendar:
Click here to book your free 20-30 minute strategy call
You will receive an email confirmation and a reminder from my booking system prior to the meeting.
Or alternatively, message me in LinkedIn, or message in LinkedIn and I will call you back within 24 hours to arrange a time for an initial chat.
My mobile number in Australia is 0418 277 137.
My business email address is: [email protected]
I look forward to talking with you.