In your impression, is a Finance Manager just a simple Mr. Accountant or Ms. Accountant? They are just sitting in the finance area with a pile of bills, and then you normally only go to them when your travel expenses need reimbursement or when you need a purchase order approval?
These stereotypes can still be found in smaller companies in the developed countries, but they are a lot more common in developing countries like China. People tend to think that finance staff are extremely stringent and rigid, who will only show up to point out errors and give correction. Therefore, most people tends to hide away from finance staff.
But, this is a misunderstanding!
Because most of the finances staff are still being viewed at the level of accurate financial accounting, to keep the book accurate, to pass the audit and tax scrutiny, and also to maintain adequate risk control for the company.
However, in addition to this level of financial accounting, there is also another layer of management accounting, which is not that well-known to most people.
For these management accountants, you'd better be a good friend of them, because they will help you. Whether you are in the R&D department, production line, marketing function, sales organizations, or even IT, you will never regret your efforts to become a good friend to your finance manager. Why? I will talk about it later.
First of all, you have to recognize these people who do management accounting
If you just think that finance is limited to pure technical book keeping, you are wrong.
In fact, all business activities, throughout the business cycle, finance and numbers are everywhere, because finance is a business language that runs through everything.
It is difficult for leaders from other functions who do not understand finance to climb up the corporate ladder, because the higher you go, the more you need to be speak the language of numbers and tell the story behind the financials.
Why is finance everywhere? Because larger corporations will deploy management accountants throughout the business cycle, and call them "Finance Business Partners".
The R&D Department will have R&D Finance Manager
The production plant and supply chain will have Supply Chain Finance Manager
The sales team will have Commercial Finance Manager or ITO (from inquiry to order) Finance Manager
Operations, customer service and the cash team will have OTR (from order to remittance) Finance Manager and Cash Manager (not those cashiers who deal with banks, but finance managers who manage cash flow at the strategic level)
Other than the above-mentioned mainstream business activities in the industry, there are also a series of back-office supporting functions, such as Product Management, Marketing, Information System IT, Human Resources HR, Quality Inspection, M&A or BD , Legal, and a few other departments, these places also have their corresponding Functional Finance Managers, such as IT Finance, BD Finance, Product Finance and so on.
Depending on the size of the company, the management accounting functions mentioned above sometimes have a dedicated person in charge, and sometimes one person may be in charge of multiple fields. However, no matter how the staff is deployed, these strategic finance managers do exist in the practical business world.
Five reasons to be friends with these management accountants
Because management accountant is actually a mini-CFO in various functional areas , if you imagine yourself as the CEO of your own department, shouldn't you have a good relationship with your CFO?
First of all, your local finance managers are not just doing book keeping (these are operated by specialized financial accounting personnel, mostly in a remote share service center); secondly, they actually have a lot of "power" to protect you and help you succeed.
Reason one, your budget is in their hands
How much do you want to spend, what project do you want to implement? Those all cost money and where does the money come from? Your finance manager is the one who helps you win. They help you make a business case, show the trade off of costs and benefits, assess the pros and cons, and also use their personal charisma and presentation skills to secure the budget from headquarter for you.
Reason two, your performance is all visible to them
If you are in the sourcing, your performance is how many suppliers you have squeezed and how much money you have saved;
If you are in the sales department, product management, or marketing, your performance is how much your operating income has increased, whether your gross profit has gone up, and whether your market share has expanded;
If you are in production or warehouse logistics, your performance is how much production efficiency has been achieved, how much logistics costs have been reduced, and whether the inventory level has been optimized;
If you are a customer service representative, your performance is the accuracy of booking the orders, whether the discount or commissions are paid compliantly, or the accuracy of the return and refund processing, etc.
There are many similar metrics or KPIs, your finance manager see them all!
Reason three, they help you ride the waves and protect you
Based on the second reason, you may want to leverage their analytical strengths to make suggestions to improve your own and your department's performance together, Otherwise you will only guess in the dark and waste your efforts on trivial things.
All efforts will need to eventually return to the company's profits.
Increase sales,
Reduce costs,
As simple as that.
But you need a good finance partner to monitor these for you. They will keep an eye for you when you deviate from the track, they will cheer for you when things are going well, and they will brainstorm solutions with you when the market environment is less ideal.
Reason four, both the dark side and the bright side, they are there
When the performance is good, they will always keep a clear mind for you, do the right thing, and achieve compliant growth.
When the performance is not good, they will make suggestions, but more importantly, they will ensure that you don't do things that violate the rules to seek temporary gains.
When the business needs to be restructured, in addition to HR, please don't forget your finance manager. They will also help you rationally assess the cost impact. After all, these personnel decisions are ultimately cost related and will be reflected on the book.
Reason five, want to be promoted? Check if you can talk through the numbers first
The higher up you go in the company, the more you have to communicate the business results clearly. Numbers and Finance is a must-have business language to enable you to continue the corporate ladder climb.
Therefore, you may want to be good friends with your Finance Business Partner, so they can teach you for free in their free time!
At the end, what is a good friend?
Finance is a business language
Everything can be finance related
As a financial manager, I hope you can live up to the five reasons to continue to shine.
As a non-finance leader, I hope you can realize the importance of finance and be a good friend with your finance manager and maintain a fine balance of supportive challenges.
After all, good friends will do the right things for you, who may say yes or say no.
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