Thought Piece
Problems in the finance function
In my experience, a problem in the finance function can be the clearest indication that there's a more structural problem within the business. Problems of this nature often go together with less than optimal internal communication and often, emerging problems in the finance function put down their roots a good while earlier and have crept gradually into view, or suddenly reveal themselves alongside a change in material conditions.
"Problems can stem from changes in management and staff; a loss of the original focus and or expertise that built the business in the first place."
"or the result of an under estimation of what it takes to move into a new business."
"what is usually needed is a to build an internal consensus of what to do next and then to introduce the many incremental, complimentary improvements"
Problems can stem from changes in management and staff; a loss of the original focus and or expertise that built the business in the first place. Alternatively, the problem could stem from (trying or drifting into) extending the products/services away from the original concept before putting into place the checks, balances and experience needed for the new area, the result of an under estimation of what it takes to move into a new business.
To address theses fundamental issues, what is usually needed is a to build an internal consensus of what to do next and then to introduce the many incremental, complimentary improvements that get the business to where it needs to be, whilst at the same time, maintaining the "business-as-usual" operations that pay the monthly bills. Without such radical action, further deterioration is certain. All this requires effort and experienced resources. An external team can help facilitate building this consensus and identifying the many improvements that need to be introduced and ideally, play a hands-on role in implementation.
As a member of a team that has managed similar turning points in a range of business situations I can honestly say that it never pays to jump to hasty conclusions. Better to work with external resources that possess the forensic accounting skills to organise the financial data and reveal underlying issues, drivers and triggers. This provides everyone with a 360° view without distracting key management and jeopardising forward motion. In addition, external or interim expertise, people with the experience and track record to facilitate the re-orientation of business direction, can identify the steps required to get there and prioritise the sequence of their introduction.
Peter Charles