How to improve your finance team

To be effective, finance teams need to become more strategic.

CFOs need to focus on teams that drive success or risk getting left behind.

Stuart Bilbrough, chief financial officer of Radius Care and vice president of the New Zealand Branch Council of CPA Australia, believes that to create more effective finance teams “we need to become more strategic, more value adding.”

He concedes this is something that has been talked about for a long time but not really conquered by many finance chiefs, especially those leading smaller finance teams.

“One of the greatest challenges for CFOs is that we know we have to change but we don't have the support from our own finance teams to make this happen,” says Bilbrough.

Approaching the role of finance in this way means the CFO should aim to spend less time on chores like budget preparation and month end, and more time working with the business and adding value.

For Bilbrough, a defining moment came in 2011 when he was at an industry presentation by recruitment firm Hudson, discussing its report, The Changing Face of Accounting and Finance.

"It is our responsibility to be the internal Big Four for our business." – Stuart Bilbrough

The report cites Flight Centre’s CFO, Andrew Flannery, as saying,  “Many of the challenges we face remain the same but both expectations from the business and opportunities to be strategic are increasing.”

Other CFOs quoted in the report expressed much the same views, with different strategies for overcoming shortfalls in skills and perceptions.

There was a clear trend towards a mix of skills, not all technical. Commercial acumen and communications skills are needed for young professionals to progress, and that requires training.

What the finance team needs

What happens is the compliance, regulation and transactional process, which can absorb much of the day-to-day time, is not something that has much visibility in the rest of the business. That can lead to major and sometimes warranted criticisms of finance teams being “bean counters”, in Bilbrough's view.

To counter that, he says expertise in four key areas will lift the skill set of a finance team and make it into an important part of the business.

All of the CFOs’ direct and “dotted line” reports need to:

•    Ensure that data is always correct
•    Ensure they know who the stakeholders and key decision makers are within the business and how to positively engage them
•    Have financial and non-financial analytics that are not only accurate, but presented in a consistent and easily understood format with insightful commentary
•    Understand the key strategic direction of the organisation in order to add value in the financial planning and budget forecasting stages.

The true value of a top-performing finance team, and the CFO, is to find ways of adding value through the financial planning process, be that budgeting and forecasting, capital evaluation, business case preparation or cost management, Bilbrough asserts.

“During financial planning, we have the best opportunity to add proactive and positive value, as opposed to reactive reporting on what’s already happened, like at month end,” Bilbrough says.

“For example, if your costs have blown out today, asking ‘What are we going to do to fix them?’ is less helpful than to forecast a cost blowout in the future, [where] the question becomes: ‘What are we going to do about it now, so costs don’t get out of hand in the future?’ That's much more valuable to the business.”

He also says even a small team can meet high aspirations.

"When I go to a Big Four firm and ask them to do some analysis for me, what I get back is consistent. It's all in the same font, it’s crisp, it's fresh and the commentary is authoritative and engaging for the reader.
 
“What I say is: Why shouldn't my finance team be doing that, too? It is our responsibility to be the internal Big Four for our business.”

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