In some organisations,7 Tips for Effective Financial Management Articles managers and leaders fall into the trap of believing that financial management is something that the accounts team are fully responsible for. While there will be areas like cash management, payroll, paying suppliers and collecting payments from customers that are likely to be handled by the accounts team, financial management falls into the remit of all managers and leaders. Mangers often have concerns about this area, often believing that it is difficult and complex. The truth is that if you are an expert in your area of the business, you can excel in financial management. So what are my key tips?
Tip 1: Be actively involved in setting a budget
Most businesses now devolve budget responsibility as much as they possibly can. As a result, managers have a chance to be actively involved in determining things like:
Temporary staffing cover for vacancies
Staffing levels to deliver the sales
Buying preferences in terms of products that will be used in delivering agreed volumes
Investment in new equipment or facilities
Don’t miss out on your chance to determine your budget.
Tip 2: Be clear on your assumptions
A budget is a plan for the future based on the best evidence you have at the time you prepare it. You will have to make assumptions about things like sales growth, staff turnover, sickness, price inflation, etc. Make sure that when https://rozwijajfirme.pl/ presenting your budgets the assumptions are clearly stated.
Tip 3: Work with your accountant
Your accountant who works with you in the business is essentially your personal business advisor. Use your accountant in this way and you will reap numerous benefits. Your accountant gets a better understanding of your area of the business and what the key drivers of revenues and costs are, which will be immensely helpful when it comes to reviewing performance throughout the year.
In addition, your accountant can model results for you based on different assumptions and help you to get a much clearer picture of the risks that might need to be managed.
Tip 4: Share the budget with your team
As a manager and leader, your success depends on the results of the team. Take the time to share your budget with your team, including the key assumptions on which it is based. If the team know what they are aiming for in terms of financial results, they will look to do the right things operationally to get the best result.
Tip 5: Take responsibility
When the going gets tough it is so easy to start to look elsewhere for excuses. If you have been involved in setting a budget which you have signed up to, focus your energies on getting results rather than the injustice of the current situation.