Seven great tips financial managers can really use
Some companies cannot maximise their profits in the market but that does not mean the CFO is not capable but may be working under economic and administrative models that are no longer relevant to the market.
They need to move to more efficient models that not only focus on short-term returns but do not compromise the company’s longterm growth prospects. Here are seven tips for financial managers to maximise the efficiency and profitability of their organisations:
1. Review the business plan periodically as the company may not be on the right track especially in operational and market performance, financial metrics and cash flow.
2. If there are impediments to the performance, introduce a new plan to the board. You may need to cut costs — say, from 3 per cent to 10 per cent — because unexpected market events can happen in terms of demand or the emergence of a new competitor
3. Concentrate on cash; for a successful business transformation, focus on cash returns, which is a real element of success. The effective bank balance must be monitored, providing sufficient liquidity for expansion, growth and maintenance of operations.
4. Identify and avoid risks, and this requires bold measures that change the course of the company and push employees to be productive by introducing new and multiple options.
5. Focus on three or four safe bets to shift the company and stay away from big risks that need time and effort and do not pay off.
6. Eliminate old incentive schemes and give employees a goal to reach as well as more rewards to those who exceed the expectations.
7. Retain and search for talented and innovative workers.
Focus on three or four safe bets to shift the company and stay away from big risks that need time and effort and do not pay off