CFO Cents | Fall 2024
Bringing Value to Your Organization as a Financial Partner
To advance the overall organization, the finance function must serve as a valuable partner. Here are a couple ways to support this endeavor.
Claire Burke, CPA
CFO and Treasurer, Dearborn Group
Creating Value for Your Company
As I’m writing this, it’s late summer—one of my favorite times of the year. Not only is the weather delightful, but it’s when I begin planning for the upcoming year and start thinking about how to advance our finance function’s performance, as well as our overall organization.
During this planning phase, I think through the typical things: how to implement technology initiatives, improve processes, develop my team, and drive the company’s desired financial results. I also reflect on what we’ve accomplished over the past year, along with areas where we might’ve fallen short. But one overarching initiative that’s always at the top of my list is to find out how our team can better serve our organization.
As accounting and finance professionals, we tend to be laser focused on the numbers, ensuring what we’re reporting is accurate, complete, and timely. Overall, we focus on actual financial performance compared to projected. We also ensure that our financial controls are followed, employees and vendors are getting paid, customers are billed timely and accurately, cash flow is adequate, investments are achieving the best yields possible, and everything is “ticked and tied.” And while all of this benefits our organizations, it’s pretty much expected. Therefore, I believe in order for the finance function to truly help advance an organization, it needs to be a valuable financial partner to its key stakeholders.
THE ART OF STORYTELLING
One of the best ways for the finance function to bring value to an organization is through storytelling. The finance function must tell the story of what’s driving financial results and how these drivers could impact future financial performance. After all, understanding what’s causing the current situation, whether good or bad, goes a long way in understanding implications for future performance. Through storytelling, the finance function can serve as an invaluable asset in helping the organization’s key stakeholders (senior leaders, functional managers, shareholders, or clients, to name a few) connect the dots between strategic and business decision outcomes and financial outcomes. Of course, the finance function’s team can take advantage of numerous opportunities to share these stories, including at monthly financial results meetings, earnings calls, client meetings, or even setting up ad-hoc meetings to focus on particular performance metrics.
While this may sound easy, it’s important to know there’ll be challenges at first—it should be looked at as a continuously improving process. Telling the story behind the financials requires a combination of business and financial knowledge, as well as the art of storytelling. While not every person in the finance function can have a deep knowledge of the business, there should be certain roles that are required to gain this knowledge. It should start at the top, with appropriate intel cascading down to other roles on a routine basis. In fact, anyone analyzing or reporting financials should have a general understanding of what’s going on across the organization. Questions like, “Did the company expand into a new market or implement a new pricing strategy? Is there a project going off the rails that’s driving up expenses?” should all be able to be answered by key players within the finance function. These folks should also be encouraged to meet with others across the organization to learn about the business and what’s happening outside of the finance department.
Overall, financial reporting and analysis shouldn’t be done in a vacuum. To develop the storytelling aspect, finance leaders can use dry runs for those presenting, with ongoing feedback to help the person develop a crisp delivery that effectively ties the financials to the business. Notably, this is a skill set that someone can—and should—continue honing over their entire career.
Of course, the other part of storytelling is time. People need time to learn about the business and dig into the financial results each month. This is the other part of the planning process that we do each year. My team looks for ways to improve our processes and drive efficiencies so we have time to develop our team and ensure they have the time to understand the business, digest the data, ask the right questions, and assess and formulate their stories.
THE CONSULTANT ROLE
Another avenue for the finance function to help advance the organization is by serving as a financial consultant to senior leaders and key decision-makers (this dovetails off the knowledge needed to tell the financial story). Consultation opportunities can arise during strategic planning processes, including when evaluating financials to determine where to invest in corporate initiatives, launch new products, and enter new markets, to name a few.
Finance can also provide input for functions who want to add resources. They can help the business think through the financial return gained by investing in more resources, which also helps educate business decision-makers so they become more mindful of the organization’s return on investments.
Another consultation opportunity is during budget season. Using the budget process as a way to learn about what is and isn’t going well across the organization is vital information to help develop the appropriate budget for the following year. Instead of simply saying yes or no to additional funding requests, gaining business insight allows for a more informed answer.
As you can see, there are many opportunities for the finance function to be a valuable partner across the organization. By telling the story behind the financial results, the finance function equips key stakeholders with the knowledge needed to make sound business decisions. This also helps educate others outside of the finance function to be more fiscally responsible. By leaning into the consultant role, the finance function can help the organization be more strategic with where it invests and how it operates.
As you begin thinking about what you want to accomplish for the upcoming year, I encourage you to think about the ways in which you can both educate your team about the business and drive process improvements to free up time. After all, this will make the finance function a better financial partner to the business, which can only help position the company for future success and help bolster the bottom line.
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