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How to tell if your Finance function is any good

By Andy Burrows

There are many different ways of looking at the performance of a Finance function.

But in this article, I want to start from first principles and definitions.

As with any question of performance, before you can tell how well you’re doing, you have to know “what good looks like”.

How can we tell if we’re doing a good job if we don’t know what the definition of “good” is?

But don’t, at this point, go straight into thinking about how you’d define a good job in Finance! If you do, you’re jumping the gun!

We need one more definition... the general definition of “doing a good job”.

The general definition of “doing a good job” is that you are meeting your objectives, which in turn is defined as making your anticipated progress towards your ultimate goals.

So, you have to know at the outset what your goals and objectives are.

Most people think that these are so obvious that they skip the...

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The one risk you should always take as a Finance professional

By Andy Burrows

Do we want risk takers in Finance? Does that conjure up positive or negative images in your mind?

I once asked my Supercharged Finance newsletter subscribers to tell me about problems and issues they had in Finance (by the way, if you want to be on that mailing list, please go to www.superchargedfinance.com and click the button that says "join our mailing list"). One FP&A Director wrote back to me saying that one of his frustrations was that his team was reticent to take risks and get out of their comfort zone.

From a business point of view, I guess we need Finance people who have a balanced view of risk. But in a very big sense, I believe we do need people in Finance who are willing to actually take risks personally.

But what risks do we want our Finance teams to take? And what are the benefits of developing risk takers in Finance? And how do you develop that culture?

Being outside our comfort zone is often not a risk at all

What we’re really thinking...

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What I learnt from nearly going bust

By Andy Burrows

The cold, hard fact

The basic - some would say the obvious – fundamental requirement in keeping a business alive is cash. Not customers, and not profit – you can have both of those things and still have a business failure. Cash is like the lifeblood of a business. That’s why the maxim, “Cash in King” is so true.

Anyone in business should have heard this. But it may still seem confusing to you how you can be profitable and run out of cash and fail. If that’s the case, then you can think more clearly about this by remembering one word...

... timing.

Take a very simple example – I buy a car for £5,000 and sell it for £10,000. There is no question that I have a good customer and I have made a profit. But if I have to pay for the car tomorrow, and I am not going to get money from the customer until next week, then my business will fail if I don’t have £5,000 cash to pay for the car tomorrow.

The brutal fact...

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How to work with the business as a Finance Business Partner

By Andy Burrows

The Marketing Director of a business I worked for a long time ago said in leading a seminar, words to the effect that, “functions like Finance, HR and IT are just overhead costs. They don’t add value. They don’t bring in new business or sell anything, and they don’t produce anything.”

I didn’t respond at the time, but I remember being quite offended. I felt put down, saying that I was no value to the business.

I was, at the time, I have to say, fairly naïve – this was not long after I’d started my first job outside of public practice.

What follows here are some of my reflections on the relationships between the Finance function and the other parts of a business, from working in more than thirteen different companies over more than twenty years since then.

“Business Partner” – a misleading phrase?

One thing that has vexed my pedantic brain occasionally over the years is the use of the term...

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Six things every business must never forget

By Andy Burrows

Business Fundamentals

I’ve been thinking recently about the fact that it’s difficult to say useful things that are relevant to businesses of all sizes.

In reality the difference between small and large businesses, and the way they’re managed, are huge.

And we tend to talk about ‘small business’ as if it were one category, with solopreneur micro-businesses like mine lumped in with the £100m international group.

And ‘big business’ is a massively diverse category too.

And whilst it is difficult to give financial management advice that will suit a wide-ranging audience, every so often I think that, whether you’re in a big business or a small one, going back to the fundamental principles of business can be really helpful.

So, what are those fundamental principles of business? Well here are six things that I think ought to be drummed into every senior manager or business owner.

1 - Profit is Prime

First, your...

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Don’t make this one mistake in your Finance Transformation

By Andy Burrows

Finance Transformation programmes will often include something like the following line in their business case: “Capacity created by automation and process efficiency will be reinvested in value-adding activity.”

Sounds great, doesn’t it? What could possibly be wrong with that?

Well, as an aspiration, it’s got a lot going for it. The trouble is, no one really believes it and it hardly ever happens. In fact, the opposite often happens. The capacity created is turned into cost savings, which leave even less time for “value-adding” activity than before.

So, if you really want a value-adding Finance function, don’t let your Finance Transformation programme become all about cost savings. And be clearer on how Finance adds value.

Automation is a good thing

First, lest you misunderstand me, let me say that automation and process efficiency are good things.

When I look back on the revolution caused by computerisation 20-30 years ago,...

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What’s driving the trajectory of the CFO role?

ai cfo epm finance rpa technology Jan 31, 2019

By Andy Burrows

Let’s talk about how and why the role of the CFO has changed over the last 30 years, and why that puts Finance in a critical position within the business.

You know, ever since I qualified as an accountant in 1995, I’ve noticed magazine articles, courses, seminars, books, all talking about the changing role of the CFO (or Finance Director as we used to call it).

And I’ve always been a bit cynical. I didn’t really know what it was all about until I sat and thought about it recently.

You see, I think there’s a misunderstanding in the media, even in the financial press, about what is driving any changes in role, if there are any.

The media portrays the CFO’s role changing because of Finance technology. In the past it was all about EPM (Enterprise Performance Management), BI (Business Insight) and ERP. Nowadays it’s all about RPA (Robotic Process Automation), AI (Artificial Intelligence) and Blockchain, apparently – you...

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It’s time to take an Amazonian approach to technology in Finance

By Andy Burrows

With all the scare stories about “robots taking our jobs”, it’s easy to get the impression that we’d rather have robots doing jobs because they’re better than us.

Recently, I had to do a 2-minute presentation on the subject of why Finance should pursue automation opportunities. And I was given a PowerPoint slide with 10 or so bullet points full of buzzwords, telling how automation can reduce cost, improve customer satisfaction, improve consistency and traceability, support strategic platform upgrades and accelerate innovation, amongst other things.

Even my own eyes glazed over as I started to talk it through, so I cut to the real point.

Forget the buzzwords!

Forget the buzzwords. Humans are better than robots!

Robots don’t have intelligence.

Robots don’t interpret anything.

Robots don’t take action on information.

Robots don’t make strategies.

Robots don’t care if they win or lose.

Robots do:

Do repeatable,...

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Out with the old (resolutions), in with the new (intentions)

cfo leadership Jan 22, 2019

By Talita Ferreira

I no longer set New Year’s resolutions. I think it is far better to set intentions.

If we follow the latest developments in neuroscience, we can rest assured that our brain, if used correctly, can be a very powerful tool. Although, we currently only use a fraction of its capability and get caught up in the noise of our self-doubts, limiting beliefs and repeat dialogues.

Setting an intention is key to bringing about a change or a desired state or goal. The various synonyms for intention are purpose, aim or plan. Setting intentions can play a key role in activating our subconscious mind to help bring about a goal or desired result. The word ‘intent’ originated from the Latin word ‘intendere’, which means to stretch towards.

 

My first encounter with intention was a few years ago when I read the book ‘Synchrodestiny’ by Deepak Chopra. I was trying to find my purpose in life. I knew I wanted to leave corporate life but...

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Thinking Strategically About Finance Transformation

By Andy Burrows

Finance Transformation should be thought of as a strategy. I get the impression that we don’t think of Finance Transformation like that. We tend to think that the business has a strategy, and functions like Finance just do “transformation” programmes.

I’ve argued in the past that, generally speaking, the CFO’s strategic blind spot is the Finance function itself. In another article, I suggested that CFOs are spending too much time business partnering, so that they don’t give enough strategic thought to the Finance function.

So, this article is all about how we can be strategic about Finance Transformation. In fact, as I said at the beginning, it’s more than that. We ought to think of Finance Transformation as the vehicle for Finance function strategy.

Thinking about strategy makes a difference

My definition of strategy is that, “strategy is a plan of action to achieve an aspiration or overcome a problem.” And...

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