Managing a finance department is more than signing off on numbers and reconciled accounts. It’s your job to see the big picture and make sure that every decision makes sense with what the department and the company are trying to achieve long term.
The best way to do this is to identify the challenges which threaten the success of your department and understand what you can do to make sure you and your team can overcome them.
You are not the only decision-maker in the department. If you were, your plate would be overwhelmingly full.
The purpose of having a department, or at least a team, is to delegate the short-term decisions so you can concentrating on steering the broader direction of finance. But even though you aren’t making the decisions, you want the right choice to be made in every situation. We’ve discussed some of the specifics of managing a finance department, such as:
Ethical expenses. You can set guidelines, but you aren’t looking over the shoulder of every employee every time they put a meal on the company’s tab.
Budget compliance. We don’t have to tell you twice that getting everybody on board with the budget can be a struggle.
Stable supplier management. Your vendor roster needs to be healthy, but your employees make the decisions day-to-day about who to work with.
These are just some of the actionsthat affect the department and by extension the company, but you aren’t necessarily the one who carries them out and it’s impossible for you to monitor each decision as it’s made.
So how do you overcome the underlying challenge of ensuring employees make the right decision every time?
The need for long term goals
Your department needs long-term goals to give purpose to the short-term decisions. Everyone in the department needs to know what you expect to achieve.
All finance managers feel the pressure to cut costs while ensuring value and the constant need to grow the business, but the clearer the goal, the easier it is for the men and women in your department to reach for it.
Forming clear long-term goals
The finance department has been strategizing for a long time. But now, with the right tools it’s easier than ever to store and summon the data that will help you set realistic goals and effective plans.
You can tell your employees, ‘Right now, we are here and we want to be over here. To do this, we have to work on this number right here.’ You can tell executives, ‘This is where we were and here is where we are now’ in specific terms.
With the specific, real time numbers, you can create clear goals that allow your department to put purpose in each decision. The only thing left is to decide how to get there.
Putting strategy into everyday decisions
Strategy communicates the steps to achieve those long-term goals. For your employees, it may mean trimming the vendor roster, cutting back on expenses or purchasing more at one time for better value.
Every time an employee logs an expense, buys from a vendor or makes a decision on behalf of the department, it’s up to you to make sure they have the long-term goals in mind and know how to get there.
A little transparency on your part and solid information on your side go a long way in overcoming the task of ensuring your employees are constantly working toward the success of the department and the success of the company.
(Hat tip to Ansik Koskinen for the photo)