Why Do I Need a Financial Manager?

In our three previous Blog posts, we’ve seen how managing our finances well is an answer to stopping the trend of small businesses failing. And one of the reasons is not having the right people on board. So why should you hire a Financial Manager anyway?

Importance of Financial Management

Hiring a Financial Manager (FM) helps your small business from becoming another statistic. 

They help to protect as well as boost your business. Bringing support straight to the heart of the business’ profitability, they help through:

  • ensuring a sufficient supply and best use of funds
  • good planning
  • implementing financial controls
  • advising around the right investment opportunities.

Finding the most profitable and sustainable solutions is what a FM aims for.

Why a Financial Manager helps your Productivity

Part of managing yourself as a business owner, is to focus on where it most matters. To work on your most skilled and passionate areas of the business. In other words, we need to partner up with the right people to free ourselves up!

A FM ensures effective financial management and so, releases you of the burden. The importance of finances demands expert involvement – rather than you trying to proportion the time and skills it requires. Thereby, killing two birds with one stone. Improve your profitability AND your own productivity!

Financial Control

Things are likely to go wrong if financial controls aren’t in place. And an aspect of financial controls involves having the wrong people in the wrong place. A Consultant and FM are the trusted professionals who help safeguard your business. Whether through prevention or by getting things back on track once they have gone wrong.

Put yourself in the shoes of these real-life scenarios…

Email Fraud

Your Executive Administrator receives an email “from you” instructing to make a payment into a new account.

Would your employee make the payment? Are there financial controls to verify authenticity of this new account and your request?

Fraud via emails are still a frequent occurrence. There are digital tools which will expose email fraud. But, don’t stop at detection. Seek prevention instead! Implementing sound financial controls with the help of a FM can help prevent this from happening.

Preventing a culture of management overriding of financial controls, is another way to prevent these types of occurrences. Plus, this would promote a culture of integrity within the rest of the team.

Deceitful Deposits

Your Sales Representative directs deposits that are six months in advance, into their personal account. There’s a lack of processes for reconciling invoices and so the fact that your business never received the deposits, goes amiss.

We can see here why consistent invoicing and reconciliation processes are essential. A FM can set this up well for you. Over and above this, they monitor payments to ensure legitimacy.

It shouldn’t even be possible for one person in the company to direct any payments to another account. Nor should the same person be responsible for all transactions, reconciliation and assets.

Try reduce employees’ “super-user access” where they are  responsible for all financial aspects. Your FM can coordinate the segregation of roles and responsibilities of financial management between you and your team.

Company Credit Cards

Your Trainer increases the credit limit on their travel allowance credit card. Their personal expenditure goes unnoticed among the fraudulent increased limits.

Credit cards are a common instrument for fraud. Yet, simply monitoring the authorisation process around payment limits, would have prevented this from happening. A FM’s eagle eye covers the business’ most simple to rather complex risks.

Read more about just five of the financial risks that every business should have implemented internally.  

Stop the Trend!

So, why do you need a Financial Manager? Well, a well-skilled FM helps you to stop the trend of small businesses failing. Whether through improving your productivity or implementing sound financial controls.

And you need to be comfortable and confident that your finances are under control. The future of our small businesses cannot afford a lack of expertise on board, executing excellence with us.  

If you’re looking at finding ways to get the right controls in place or want to make sure your financial risk is taken care of, then get in touch.