We live in an age when nearly everyone is being asked to turn out higher quality work in less time using fewer resources. Ok, the tech is there to help us do this, but it can be a gruelling challenge when whatever progress you make is never enough. And this never-ending march can lead to what can be catastrophic mistakes when those leading the organisation begin to lose a grip on where things are really at and what is really possible. Whether it’s Carillion this year or Tesco a few years back, there was probably someone with a spread-sheet trying to keep up with ever more ridiculous projections coming from stressed-out executives who had lost any sense of perspective of where they were on the road and where this route was going to take them.
So, in these times it is important for those in finance to remember what we are here for: to be The Providers of Reliable Information.
And that reliable information must be based on:
a) strong and honest analysis of where the business is now, known in accounting parlance as a robust up-to-date balance sheet. The balance sheet should be quickly and fully reconciled every month. All else fails.
b) forecasts that use sensible, objective assumptions which are updated regularly. There is always a temptation to skew the forecast to be optimistic or suit whatever the latest groupthink trend is in the organisation. Ultimately this does nobody any favours.
Above all the role of finance is to provide reliable information. A good finance team has the objectivity, the discipline and the resources to deliver this in what can often be demanding circumstances.
Bellevue Partners helps organisations run effective finance functions. If you would like to talk about how we can help you please get in touch.