The Finance Department, From the necessary evil to the business partner, through coaching
by Mihaela Danalache, Managing Partner Ensight Finance
I have been working in business consulting for many years and I was involved in countless optimization projects of the finance function in larger or smaller companies. I am familiar with the problems encountered by professionals in the field, one of the most common being the incorrect positioning of the Finance Department within the company.
Often perceived as “a necessary evil”, Finance Department can be an essential business partner for all other departments within the company. All processes of a company (Procurement, Production, Sales, or support processes) involves at their end the Finance Department. Therefore, all decisions made in the “upstream” departments could be positively influenced if the financial impact of such decisions is known in advance. This is where the role of the Finance Department intervenes as a business partner – in preventing the waste of resources, in anticipating possible risks and preventing their occurrence, in communicating the incentives the company can benefit from.
Unfortunately, in general, the effort is concentrated on the proper and timely data processing and less or at all on prevention. It is about reconciliations, verification, recording each transaction, tax computation, declaration and payment. It is not an easy job, as all these activities are done in parallel with the permanent monitoring of legislative changes (frequent in Romania). However, accounting can be creative, being based on professional interpretations and judgments. Thus, the most suitable accounting policies for the business can be selected, and there is the possibility of complete separation of the accounting area from the fiscal one.
How can Finance Department become a business partner in the company? The management of the Finance Department has a defining role in this regard. In general, people with special professional results are promoted in management positions, very “technical” people who feel comfortable in dealing permanently with data. Having reached the management position, these people have major difficulties in understanding their new role and for being recognized as such by their colleagues. The classical notions of management are less known, they do not know what their actions as managers should be, and what they should focus on first and how. For a period, they continue to focus strictly on the technical area (comfort zone), perhaps with more dedication than before. But they soon become aware about the need to change.
Support is needed to determine them to act, to make them setting personal goals, to make them to prioritize and achieving them. Experience has shown that the most appropriate guidance comes from a “coach” with experience and expertise in the finance field. Common technical language and understanding of financial processes and technical details often helps.
I discovered with great satisfaction how much and how quickly people can change if they really want this. The change of the individual (manager) triggers changes in the organization: team motivation, a relaxed working atmosphere, less frustration and conflicts. That is why I encourage those who face the problems described above to try a coaching program dedicated to this field.
Ensight Finance can help you through coaching services dedicated to the financial function of the company.Back to News