Wednesday, March 6, 2013

The Business of Business: Leading the Money Train, Part #1 - The Start

Starting a business? Got a business already and having money management challenges?

Many start-up companies and small businesses existing for a number of years outsource a large portion if not all of its financial management component.  If they staff it internally, they sometimes relegate it to a bookkeeper, family member, or a business manager whose expertise may be in another discipline or one who lacks financial management breadth and depth.  During my career of advising small businesses in financial management, I observed a weakness that poses a significant risk to companies as going concerns: financial leadership.

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Effective financial management for both profit and nonprofit requires experienced and astute leadership joined with integrity.  Without such leadership, the organization could not survive for long, remain financially healthy, and expand into its markets.

The finance manager (CFO, controller, or accounting manager) informs the organization of the importance placed on strategic and tactical allocation of company resources in line with business mission and goals.  This importance expresses itself in several ways.   

1. Sound financial management weighs heavily on the “tone at the top.” 
2. Sound financial management requires expertise and experience.
3.  Sound financial management means vesting the appropriate level of management oversight to the finance manager for insuring successful business management.

If these traits do not rise to the level for addressing the challenges and issues the organization faces with its finances, proper oversight would be elusive and missing.  Successful business management directly relates to sound financial management.

NEXT:  Part #2 - The Tone at the Top

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