What Defines A Finance Master?

In some areas of life, it’s easy to define when you master something as it means you’re among the best at what you do. In sports, you’re typically a professional competing with the best of the best. In the arts, you might have a painting featured in a famous gallery or play music in a well-known orchestra. Even in business for some functions, it’s easy to define when you’re a master like Sales when you keep beating your sales targets or in Operations when your unit almost never breaks down. But what does it take to master Finance or become what can be termed as a Finance Master? I’m setting out to investigate this in my new "Finance Master" series but on a high level, this has already been defined. 

Finance & Business + Efficiency & Effectiveness 

First introduced in 2008 by Deloitte a Finance Master is a finance function that masters both finance capabilities and business capabilities. In addition, companies with master finance functions outperform their peers. In simple terms, a Finance Master is defined like below.

In my opinion, we need to add two more dimensions to become a Finance Master that stretches beyond capabilities. That would be, efficiency and effectiveness as defined by The Hackett Value Grid created by The Hackett Group the world’s leading benchmarking company of the finance function and more. The Hackett Value Grid defines what a world class finance function looks like essentially saying that compared to a representative peer group your finance function needs to amongst the 25% cheapest (most efficient) and amongst the 25% best (effective). In simple terms, you can see how a world class finance function is defined below.

To truly be a Finance Master you, therefore, need to have top-notch capabilities within core finance areas as well as superior capabilities to support the business. At the same time, you need to be the best and the cheapest at applying those capabilities. 

Can anyone really be all that once? 

That’s a good question and if you know a finance function that looks and performs like this I would like to know about it! The "Finance Master" series will look at several core finance areas and areas supporting the business to discuss how you become the best in each of them. Hackett looks at the finance function by process and benchmark each of them whereas Deloitte takes a holistic approach. This is also why I think the two models complement each other so well. The Deloitte model defines the superior capabilities needed and The Hackett Value Grid defines how to execute them and make them relative as they are compared to a moving target of a peer group. It’s probably not likely that a finance function can do all at once and that choices will need to be made along the way but I think there’s merit to examining and discussing for different areas how you could master them. In the end, we’ll revisit the overall Finance Master term and discuss what it would take for any finance function to become one. Below are the areas that will be examined and as time passes you can click through directly to each article that examines the individual areas closely.

• Accounts receivables / OTC (published on 14 August)
• Dunning (published on 28 August)
• 3rd party dunning (published 12 February 2018)
• Accounts payables (published on 4 September)
• Working Capital Management (published on 25 September)
• Month-end reporting (published on 18 September)
• Travel expenses (published on 1 August)
• Intercompany
• Tax
• Financial Modelling (published on 21 August)
• Internal audit (published on 7 August)
• Forecasting
• BI & Analytics (published on 11 September)
• Business support
• Planning
• Risk Management (published on 12 October)
• Hiring of finance professionals
• Finance transformation
• The Finance Master Professional (the individual Finance Master)

Obviously, there are other areas of the finance function that could also be examined hence later more articles might be added. 

Your input is needed as well 

This is a great opportunity to co-create definitions of finance mastery together with all of you as most of the areas within the finance function either one of you will be more of an expert than I am. Therefore, I’m also reaching out to you with a proposal to co-write many of the articles if you have great insights into let’s say accounts receivables or tax etc. Just send me a message or comment below if you’re interested! I look forward to discussing finance mastery with all of you over the next couple of months and hope that we can define how to be truly great at Finance!

As always, I’m interested in your feedback on this article and the topic in general. Do you find it relevant or has it already been done? Let me know by liking, commenting and sharing and indeed if you know a Finance Master then let’s put them up there on the wall as a target for anyone else to beat! You can follow me on Twitter for continuous updates about what’s happening in the finance function. 

I encourage you to take a tour of my old posts on finance transformation and not least “Introducing The Finance Transformation Nine Box” which is really that starting point for the transformation. Finally, you should join my Finance Business Partner Forum where we will continue to discuss this topic.

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Anders Liu-Lindberg is the Head of Global Finance PMO for Maersk Transport & Logistics and is working with the transformation of Finance and business daily. I have participated in several transformation processes such as a (business) finance transformation at Maersk Line, going Beyond Budgeting at Maersk Drilling and transformed a finance team from Bean-counters to Business Partners. I would love the chance to collaborate with you on your own transformation processes to help you stay out of disruption. Don’t be shy! Let’s get in touch and start helping each other.