MANAGEMENT FOR DESIGN BUSINESS JOURNAL 109 DO YOU KNOW YOUR NUMBERS?
Are you an expert in business financials? As business leaders you are confronted with a myriad of financial information about your business — your income, your expenses, your profit margin, cash position and project performance. And that’s only the start!’ Your role as a leader is to regularly absorb this information and to make decisions in a timely manner. These executive decisions can then be converted into activities to be completed by your team. Your accountants and finance people then report these activities in a numerical way to produce your business report card. This will most likely be in the form of an income statement, a balance sheet and most importantly a cashflow statement. You then turn to your Chief Financial Officer (CFO) to decipher and inform you about these numbers. That is, if you have a CFO! The role of your CFO is to describe back to you the financial impact of the decisions and associated activities that caused the numbers in the first place. The numbers are always a reflection of the decisions made and/or not made. So doesn’t it stand to reason that if we want to change the numbers we simply need to change the activities that caused the numbers?
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The role of your CFO is to describe back to you the financial impact of the decisions and associated activities that caused the numbers in the first place.
” Where are your numbers today and where do you want them to be at the end of the year? How do you drive your business to succeed and deliver the outcomes that you are seeking?.
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firms that are similar in size and business model to your own. 5. Take the right action — create change Of course, knowledge without action won’t benefit your business. You’ve got to use the information you gather to make smart strategic moves that will enhance your success.
Outsourcing your CFO 5 steps to business success 1. Know your numbers The language of business is accounting. How do you know where you need to go if you don’t know where you are? 2. Set your KPIs Are you measuring your day-to-day activities? Have you set targets that align with your strategic plan? Analyse your data and select relevant metrics to help you define business success. For example, do you know your debtors days? This KPI has a direct impact on your cashflow and should be measured monthly. Do you know your % of technical salaries to fees? This is another valuable measure to use to keep your business in check. 3. Measure, measure, measure Management guru Peter Drucker is often quoted as saying that “you can’t manage what you can’t measure.” What gets measured is what gets done. If you are not measuring it you are not managing your business effectively. 4. Compare/benchmark You need to compare to how you are tracking year in year out as well as comparing your results with those of appropriate peers — that is,
The quality of your decision-making has a direct impact on the performance of your business. To make good decisions and outperform the competition you need the right information at your fingertips. An experienced and expert CFO can bring significant value to your business and ensure that you are set on and continue the path to success. And you don’t need to employ this role on a full-time permanent basis. Many successful businesses are tapping into an expertise that is becoming more readily available at any time you need it. This person will optimise the value of your internal accounts team by providing a business-focussed overlay to your finances. They will report, advise benchmark and provide strategic advice before turning your financial data into actionable information through analytics. Your firm deserves a strong financial leader with the expertise to ensure the well-being of your business now and the knowledge to offer meaningful solutions to take your business forward in the future. By supercharging your accounts, your CFO will become your trusted business advisor and empower the business leaders to see the big picture that impact at a micro and macro scale to protect and accelerate the company. Business analysis and decisions are able to be made with more confidence giving your firm the advantage over the competition.
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Outsourcing your CFO provides many business advantages, including:
• Certainty regarding up-to-date commercial and financial knowledge
• Business leaders are able to focus on core business activities and strategies to remain competitive
• Tailored budgeting to ensure your profits are reinvested where they will have maximum impact for people and infrastructure
• Access high level technical resources
• Total confidentiality of client records
• Continuity of service, knowledge and financial management ensuring your business never misses a beat
• Knowing where your business stands financially at any given time
• Cost savings for larger firms and affordability for smaller firms for whom a CFO was previously a prohibitive expense • Independent and objective advice — no-one is protecting their job • Data-driven analysis to guide decision-making any time and anywhere
In an environment where every dollar has a place and a purpose, outsourced your financial expertise to an experienced and expert Chief Financial Officer will enable your business to cohesively manage its bottom line. This will free you up to take the lead in your core of your business with the knowledge your finances are in safe hands.
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Gordana Milosevska, CPA Director, Management for Design Gordana is a Director and Owner of Management for Design and devotes her valued skills assisting clients to build successful and sustainable businesses that enrich the built environment by setting them free to focus on what they do best. With over two decades of broad experience in accounting and financial management in a range of industries, including design, hospitality, retail and security and investigation, Gordana’s areas of expertise encompass accounting, financial strategy and control, business performance analysis and reporting.
Gordana Milosevska gmilosevska@m4d.com.au @M4D_Australia
Gordana has been instrumental in enabling businesses to attain financial stability and sustainable growth by creating the change that’s needed to unleash the professional expertise and creative spirit in businesses.
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