What is “good financial management”?

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The finance department From the finance department perspective, “good financial management” is having robust processes that ensure all sales and purchasing transactions are accurately captured, processed and paid in a timely manner, the management accounts and statutory returns meet the legal requirements and auditor’s approval, payroll is always run on time and the resulting cashflow information is diligently managed. This financial information is communicated once a month with the Board and senior management, through the management reports pack, usually between 5 – 15 days after the month-end. It confirms where the business was and predicts the probable future. From a […]

How to get management “buy-in” for purchase invoice and order automation

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Ever wonder why is Finance always at the back of the queue for investment? The one common characteristic of every finance team is that it is always crazy busy. This is exacerbated each month-end in the scramble to get everything processed to produce the month-end accounts, management information pack, and quarterly VAT returns as well as the annual pain of year-end and the subsequent audit. Most finance departments are becoming increasingly frustrated by their inability to evolve and adopt better methodologies simply because there are always “more important” projects for the corporate cash and available resources. Unfortunately, it is equally […]

A fundamental problem with current “Financial Management”

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Nobody is going to argue that good decision-making takes place when we have all the relevant information, immediately to hand, influenced by our experience, PRIOR to making the decision. So, there can be no argument that good financial management works the same. For business, once a contract has been agreed or a purchase order placed, the following transaction processing is simply accounting, the diligent recording and processing the resulting documents, (i.e. the order and the invoice), to meet all the statutory requirements in a timely manner. So, what is the “real-time” information that finance provides to the budget holders – the people […]

Budget holders: It is time you held Finance to account.

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I appreciate what follows is potentially going to be seen as contentious, so I apologise in advance if some of you perceive this as offensive, as that is not my intention. The issue is straightforward. Many finance departments believe that their accounting processes are acceptable and many are unwilling to even listen to understand alternative methodologies perhaps because they did not think of it or they have a low opinion of the financial skills of the directors and budget holders in the business (so, what is the point?). Perhaps they like the status quo, namely ensuring that the people that […]