We're Business Partners, Not Bean-Counters!

Transforming Finance from Bean-Counters to Business Partners

Being a former CFO, this subject is one of my favorites. In many companies, the baseline perception is finance is a bean-counting organization; folks in the back office who just add the numbers up and report the results. Make no mistake about it, while some people think this a bit funny, in actuality it’s a term of derision.

It is Finance’s responsibility to turn that perception/reality around 180 degrees, because until other functions view Finance as a “go-to” function, Finance will not in position to add the value it should, and needs to, if the company is to achieve or exceed its goals.

While clearly, the “cost of entry” for Finance is satisfying its fiduciary responsibilities, because if this objective is not met, there could be severe consequences including time spent in prison. Therefore, it is the responsibility of the CEO and CFO that Finance has the adequate skill-set, bandwidth and resources available to achieve this object. However, once the fiduciary responsibilities are under control, Finance should focus on being value added business partners that others in the company can and will rely upon.

The actual measurement of finance’s obtainment of being a valued added business partner is very interesting food for thought. While obtaining feedback from the executive team and other functions is an important component and one that should happen on a regular basis, it often can be somewhat subjective. To counter balance the subjectivity, one method I have used is to observe how Finance gets involved with other functions. If the other functions seek Finance out, before committing to a course of action, then Finance is most likely adding value. If however, Finance has to force their interactions with other organizations, then they are probably viewed as a “necessary evil”.

Keep in mind that being viewed as a value added business partner is not something that usually can be achieved overnight. It has to be earned over time through consistently providing valuable information and results. However, once achieved the finance organization can and should be viewed and respected as a high performance team.

Some quick examples of Finance’s business partner opportunities:

• Executives: Providing timely, accurate and perceptive information enables and facilitates proactive vs reactive actions.
• Sales: Contract review with Legal to ensure that the terms and conditions of a transaction enable favorable business conditions, accounting treatment in terms of revenue recognition or minimize liability exposure.
• Engineering: Analyzing product deliverables in conjunction with budget constraints to ensure Sales assumptions/expectations regarding new product offering to boost sales are in sync.
• Marketing: Review of sales revenue/margin performance in conjunction with inventory positions by product to facilitate course correction of strategy and tactics.
• Manufacturing: Analyzing results to understand variances, lower costs and work to improve performance.
• Administration: Establishment of budgets for headcount/recruiting, training and office space requirements.