Building a Strong Finance Function from Scratch: A Simple Guide for Finance and Business Leaders.

Day 16/30

The conversation between Consultant Iwelabi and his client continues:

Client: Good afternoon, Iwelabi. Thanks again for all your help so far. I’ve started discussions with the People Team regarding the budget for building my finance team, and they’ve informed me that I have $5k to hire a team of four people. Do you think this would be sufficient to bring on four highly efficient talents?

Iwelabi: Good afternoon, Sir! I’m happy to hear that you’ve already started discussions on building your team. Absolutely! With a $5k budget, I can help you find some of the top talents from our pool of mentees at Mentorship Corner International.

Iwelabi: Meanwhile, if you're currently able to hire just four people, I'd recommend focusing on the key functions you need to effectively perform as CFO. That means starting with two key hires: an experienced Financial Controller and an FP&A Manager. These two roles should be at the same level, with the Financial Controller handling tasks related to financial reporting, recording transactions, and governance (including internal controls and regulatory compliance). The FP&A Manager would take care of budgeting, budgetary control, forecasting, and other related tasks. Both should be supported by two associates—one working directly with the Financial Controller and the other supporting the FP&A Manager.

Iwelabi: Also, to establish solid controls as we’ve discussed in previous sessions, make sure there’s a clear segregation of duties within the team. Additionally, incorporate as much process automation as possible to streamline operations and reduce manual errors.

Client: Interesting. So, if we were to break down their main job functions and required skills, what would your thoughts be on that?

Iwelabi: Great question! Here’s how I’d outline it:

Iwelabi: To start with, let’s look at the Financial Controller: The Financial Controller is the backbone of the finance team, ensuring that all accounting operations run smoothly and efficiently. In this role, the FC oversees the accurate recording, reporting, and governance of all financial activities within the company. This individual must have a strong grip on regulatory compliance, financial reporting, and internal controls while being able to lead a team in executing these tasks effectively.

Key Responsibilities:

Managing Accounting Operations: The Financial Controller is responsible for overseeing all key accounting functions including billing, accounts receivable, accounts payable, cost accounting, general ledgers, revenue recognition, and inventory accounting. This ensures that the company's financials are maintained accurately and in a timely manner.

Regulatory Compliance: The FC ensures compliance with regulatory reporting requirements, including preparing and submitting tax filings and financial statements to local, state, and federal authorities. Staying up-to-date with regulations like IAS, IFRS, and CAMA is essential to maintaining accuracy and avoiding penalties.

Monthly Financial Statements: The Financial Controller is tasked with preparing and publishing monthly financial statements. This provides key insights to leadership about the company’s performance and ensures transparency in financial dealings.

Technical Research: The FC must keep pace with changes in accounting standards and perform research on technical accounting issues to ensure full compliance with relevant guidelines and regulations.

Quality Control: One of the key responsibilities of the FC is to ensure quality control over financial transactions and financial reporting. This includes reviewing financial reports for accuracy and ensuring that they are free of errors or misstatements.

Policy Development: The Financial Controller plays a crucial role in strengthening internal controls by developing and documenting robust accounting policies and processes. This helps mitigate risks, prevent fraud, and ensure transparency within the finance function.

Required Skills & Capabilities:

In-depth Accounting Knowledge: A successful Financial Controller must have a deep understanding of accounting principles and business concepts, including how to apply them practically to the firm’s financial operations.

Analytical Skills: The ability to analyze financial data and transactions is key to quality control. The FC must be able to review financial reports and catch discrepancies or areas of concern before they escalate.

Leadership & Decision-Making: Strong leadership skills are required to manage the accounting team effectively. The FC should be able to make informed decisions quickly and steer the team towards accurate financial reporting and compliance with regulatory standards.

Attention to Detail: This role requires an eye for detail, particularly when it comes to preparing reports, financial statements, and ensuring compliance with all applicable regulations. Accuracy is non-negotiable in this position.

Process Improvement: The FC should continuously seek ways to improve financial processes and strengthen internal controls to ensure the company operates efficiently and meets all regulatory standards.

Client: Wow! This is detailed!

Iwelabi: Very well, sir!

Client: I think we should continue with the other roles breakdown tomorrow. Or what do you think?

Iwelabi: That's fine. See you tomorrow.

Cheers,

#Iwelabi.