Why financial reports are the heartbeat of your company

Your Business Decisions Will Always End Up as A Number in Your Books

No matter whether you sell products or services, everything you do in your business will end up being a number in your books and in your bank account.

Finance and controlling should be the heart of every business. Though often finance and controlling are just support departments helping to generate reports, support keeping an overview of your cash flow, receivables, and payables as well as your business performance and development.

The Heartbeat of Your Company

Often, Controlling and finance departments are not integrated appropriately within the company. They play a side role, delivering statistics, reports, and numbers. In fact, these department are the ones with the best overview of what is going on in your company.

So instead, they should be the heart of your company, as they are able to see and analyze everything within your business. Of course, that does not mean that you should only focus on numbers and cost saving.

Controlling should be very strategic, operational, and commercial, focused. Finance and management reports should support your operational department enabling them to act in time, to adjust plans to reach your company goals. In that case it is what it should be: A management tool as part of corporate management.

A financial controller, who “only” controls, focusing too much on controlling costs will hurt growth.

It's All About Balance

What you need is a balance between having the right budget for each team and making sure that each team is profitable. For a team to be profitable, a good understanding of financial and management reports is key. That’s how you achieve,  maintain and grow the financial health of your business. Otherwise, Controlling will rather hinder the growth of the business.

Making the Right Decisions

Controlling is not only about saving costs, controlling everything and everybody.  Controlling is about making the right or wrong decision transparent.

“Numbers don’t lie” – however you need to understand why your numbers are how they are! So, keep an overview by integrating your controlling team encouraging them to deliver strategic, operation focused information.

Do you have enough fuel? Check and track your Liquidity and Obligations

Finance and treasury ensure that all departments comply with obligations and legalities. They’ll make sure that you have enough fuel to reach your goals and fulfill you plans. Otherwise, even if you have an excellent plan to move the company forward, without cash, you can’t go anywhere. You can’t put your plan into action.

Communications Skills are Key to Successful Reports

Times were controlling colleagues are uncommunicative should be over. I’m saying “should” intentionally!

Communication is key. Still, I often notice that finance and controlling colleagues are people who do not like to communicate verbally as they believe in the truth of numbers in written. On the other hand, operations departments, for example “sales” or “services”, often need more explanations not just numbers.

Operational departments need verbal explanations, discussions, and recommendation to understand the information of the financial reports being able to take improved decisions.

Make Controlling your Strategic Base

Hence to implement an integrate your controlling team you should look for people who do not only have analytic skills but have good communicative skills. This will help you to fill the gap in your company between the two different types of departments and mentalities.

So, what is the role of your finance and controlling teams? Let me know your thoughts.

Book your consulting

Need support with your management reports? Let me know and send an email to Cordula.buss@planatoccontrolling.com

Let’s do it!