I recently met with the FDs of two rival companies operating in the same sector within the space of a couple of weeks. The experience drummed home to me just how the age-old stereotype of the accountant is both long dead and simultaneously alive and kicking.
Now, don’t get me wrong. Both of the individuals in question were perfectly charming, but they had very different management styles, for want of a better phrase. Let’s start with the similarities; they had both trained with big firms, both had a good ten years’ experience with their respective organisations and had both successfully moved up the career ladder.
And there, I have to say, the similarities ended, for me at least. One was dull (there’s no other word for it) and the other was vibrant, passionate about the business, a true business partner and oozing self confidence and a sense of fun. The other insisted on an outline of questions prior to the meeting (the answers to which were subsequently reeled off, parrot fashion like some sort of homework assignment). He came across as a very competent ‘process’ man but not a ‘plant’ in the Myers-Briggs psychological profiling sense of the term (i.e. creative).
I left one interview feeling geed up about the company, and excited about their industry. I left the other half asleep and wondering how on earth I was going to turn the presentation I’d just endured into something anyone would want to read.
In all my time writing about business, I’ve met enough great CFOs to know that those at the highest echelons of finance are pretty much as good as it gets on the business front. There’s a reason why the vast majority of CEOs in the FTSE 100 have an accountancy background and have worked their way to the top via the CFO route.
But for those who haven’t grasped it yet, the message is clear; it’s time for FDs to up their game. The economy may be showing signs of picking up but the trauma that was the recession is still fresh in everyone’s mind. The need for strong numbers, top notch corporate governance and faultless risk management, all peppered with not insignificant amounts of creativity have never been more sort after.
Never has there been a better time to be in the financial hot seat. In terms of opportunities to prove your worth, raise your profile and add real value to the business, the eyes are well and truly on the CFO. Just leave the bean counter stereotypes well and truly where they belong.
Becoming a Next Generation Finance Manager
I agree that CFOs have a real opportunity to prove their worth in the aftermath of the recession, and I believe that technology has a major role to play in distinguishing between the “bean counters” and “next generation finance managers”.
Over the past twenty years, accountants have leveraged technology to systematically improve the financial information available to the business. As the functionality of technology and applications has improved over time, so has the quality and timeliness of the financial information which, in turn, improved the effective management of the business.
However, there remains one last bastion of manual processes that spans the entire organisation and its function could not be more critical and sensitive in the current commercial environment – the way the company spends its cash. The automation of the manual purchasing process offers significant productivity gains, visibility of every financial commitment as it is made, automated budget control, improved accuracy of management accounts and cashflow reporting and the ability to consolidate corporate spending to reduce the cost of purchases.
At the heart of the problem is delegation of the maintenance and management of corporate budgets to departmental staff; whilst delegating procurement to each department simply creates an ever growing list of suppliers with no attempts to achieve best price and significant wasted money. Financial managers have absolutely no chance of imposing control, achieving consistency or ensuring that paid for goods and services have actually been delivered.
The delegation of responsibility is set to end as “next generation” finance managers are seizing the opportunity to take control of the critical process of how the company spends its cash. This automation of the purchase to pay process is the foundation stone of spend control, delivering quantifiable and significant savings to the business that instantly benefit the bottom line and cash flow.
And the financial benefits are significant with most organisations readily conceding that a 3% - 5% saving in prices paid can be easily achieved through a more focused and controlled approach to purchasing, and a further 1% - 3% by purchasing cheaper equivalents.
Finance management is at last coming of age, proactively generating cash instead of just counting it and making a real contribution to profitability.
Neil Robertson
CEO
Compleat Software
http://www.compleatsoftware.com