Three Things You Should Expect From Your Finance Team but Don't Get Today

Most finance teams do a fine job invoicing, recording and paying bills, reconciling cash accounts, and closing the books. And it is important that they do these things well. But if this is all that you are getting from your finance team, then you are not getting true value for the money you pay.

Accounting and Finance teams are the biggest consumers of data in an organization. They take everything (commissions, payroll data, AP, invoices, metrics, etc.) and finesse it (because much is in an incompatible format) into their accounting system to generate financial statements. They see everything—the cost of a new marketing campaign, the new revenue associated with the campaign, and the commissions generated from it. Because this team has access to information that nobody else has, they have an opportunity to assess, review, and report on many facets of the company and provide critical visibility behind the scenes. Here are three things you should be getting from your finance team today but probably do not get today:

Revenue Generation by Marketing Channel

Most companies have an idea which marketing channel brings in revenue, but they cannot quantify it. This needs to be quantified so that the company can stop wasting money on channels not delivering revenue and instead focus on channels that do. You can also perform sensitivity analysis on a channel by changing messaging to better understand how sensitive a channel is to a modified message. This gives companies a proven target if they want growth—additional investment in proven channels that continually drive revenue.

Profitability by Marketing Channel and by Customer

Similarly, an assessment of profitability by marketing channel will tell an organization how lucrative a sales channel is. Some sales channels may yield smaller customers that require high implementation costs and may yield revenue but not a lot of profitability. Sometimes larger customers in certain channels may not be as profitable as a company may think when they consider all services that they may offer a larger customer. Chopping up profitability by customer and marketing channel can tell you a lot about your pricing and services and should be something your finance team provides you consistently.

Proactive Thoughts on Efficiency and Growth

It’s always good for a finance team to identify an inefficiency or problem.  But it’s better to identify this problem and propose a new solution.   Sometimes these can be simple fixes that your accounts payable staff can address.  Imagine your T&E costs appear to be rising due to the many guests that your company hosts.  Most visitors are finding their own hotels which may or may not be close to you (these are, after all, out of town visitors) and these rooms can be very expensive and are always reimbursed.  What if your accounts payable staff calculated the average days needed in each month and reached out to a nearby hotel to propose volume for low-cost rooms.  T&E costs drop and users get a nice hotel that is close to your office- without the challenge of trying to book a hotel without knowing the area.  Challenges exist in many areas for businesses and your team can drive strategic and tactical decisions by critically looking at data and arriving at new solutions.  This is a big mindset change from the normal finance team and should be the expectation for all of them.  I believe the best organizations and employees tell their customers and managers what they need before they realize they need it.  They shape the future by understanding what is needed today by the changing organization. 

Your accounting and finance teams consume vast amount of data and a high performing finance team can critically evaluate it to shape strategic and tactical moves.  Take advantage of one of your top resources to increase revenue and profitability.  Quit settling for less and expect more from your finance teams than just accounting.   I have taken struggling reactive teams and created world-class proactive teams that add significant shareholder value – and I can do it for you.

Reach out to me HERE.