FMAccounting.com » Finance Role/KPA/KPI

Role Of A “Business/Financial Controller”

slang — Sat, 10 Apr 2010 01:23:33 +0000

In earlier articles in the category of Finance Role KPA/KPI, we have been reiterating that many accounting personnel whether they are accounts exective, accountant, finance manager or financial controller should focus on more critical mass like “business” partnering with the other operating managers so as to maximize their contribution to the entity. Many a times even during job interview, accountants/financial controllers have often been asked of what sort of business partnering service they have done and what financial results/impact arise from them.

Whenever we read any advertisement for accounting personnel, often we see advertisers putting up advertisement on specific terms or wording like ” BUSINESS/Financial Controller”. For those who still are not familiar with the term “business partnering” the below job specification might help to open one’s mindset:

The job: Act as co-pilot to Country Business Manager to drive the direction of the business via insightful financial analysis and control

Proactively facililate strategy formulation and communication;
Drive an integrated planning/forecasting process to improve accuracy;
Manage resource allocation process efficientl through appropriate financial measures and monitor Working Capital;
Support management of business performance through the use of KPIs and comparative benchmarking;
Implement cost control measurement (including structural cost)
Ensure that the execution of pricing policy/margins are aligned to the strategies;
Support new business initiatives such as financial modelling for new products;
Advise trading partners/functional departments on finance related business issues by providing insightful analysis and
Champion the Group/business view versus the local/market view.

Does it sound very complicated – does it sound like accountant trying to do business work? Nope, it merely requires a professional accountant to use his accounting and finance knowledge/expertise/experience plus insider knowledge of the company to view the business from the commercial angle so as to advise all level of management re: CEO or low or middle level business unit managers.

So be beware that at any job interview, a small portion of the interviewer’s time should be to understand academically what you have achieved but a larger part should be about how the candidate have fared used your accounting knowledge and experience to help(advise) his/her existing business unit managers so as to contribute to the growth of the company- what we called enhancing shareholder value! Don’t be alarmed that certain interviewers might indirectly insinuate like “in that case, we might as well recruit a bookkeeper/accounts executive to keep books & maintain the transaction processing”

Samples of Corporate Finance Roles And Responsibilities

slang — Tue, 20 Oct 2009 09:56:03 +0000

Presented below is an overview of a typical Corporate Finance function:

• Senior VP and CFO
• Vice President and Corporate Controller
• Director of Accounting Controls and Systems
• Director of Internal Audit
• Tax Manager
• Accounting Systems Manager
• Senior Business Analyst
• Cash and Credit Manager
• Senior Accountant
• International Accountant

Job Descriptions:

Below are very brief descriptions of the minimum activities performed in each financial position..

Senior VP and CFO
• Responsible for all treasury, accounting, legal, investor relations, human resources, information technology and administration functions.
• Should be a member of the Executive Management Team (EMT) and reports to the Chief Executive Officer (CEO).

Responsibilities include:
• Strategic financial planning, budgeting, accounting practices and financial risk assessment;
• Directs the preparation of annual operating and capital budgets and cash flow projections;
• Manages all Corporate financial functions including general accounting, internal reporting and controls, planning, budgeting, forecasting and variance analysis;
• Monitors and analyzes the organization’s financial condition and performance and works closely with the CEO as well as with other key executive staff members to ensure continuous financial improvement;
• Ensures compliance with Corporate governmental regulations for all financial tax and treasury activities, prepares and presents financial reports to the Board of Directors and reviews and implements financial information systems;
• Analyzes new business opportunities and major projects by assessing financial risk/return and
• coordinates the annual audit of the Company’s financial statements by an outside audit firm.

Vice President and Corporate Controller (VP and Corporate Controller)

Report to the Senior VP and CFO and oversees the staff in the day-to-day operations of the Corporate accounting department,

Responsibility is to ensure that all financial activities are:
• in line with Company goals and objectives;
• in conformity with U.S.GAAP; and
• in compliance with governing body regulations and debt compliance requirements to which the Company is subject to.
• responsible for the preparation of the Company’s consolidated financial statements and the filing of periodic reports with the SEC and other regulatory agencies.
• assists the Senior VP and CFO in designing, developing, implementing and recommending policies and procedures for the financial function.

Director of Accounting Controls and Systems
Report to the Senior VP and CFO.

Responsible for

• The development, documentation, implementation and maintenance of the internal control environment of the Company to ensure compliance with the Sarbanes-Oxley Act of 2002.
• Design of control procedures and testing/evaluation of key business processes as to their effectiveness.
• Assists operational groups, where requested, in developing and implementing improvements in systems, procedures and/or controls to improve efficiencies and to safeguard the Company’s assets.
• Coordinates and cooperates with the Company’s internal and external auditors and interfaces with project leaders across the Company.

Director of Internal Audit
Report to the Audit Committee of the Board of Directors with a dotted line to the Senior VP and CFO.

Responsible for:

• The administration of internal audit activities.
• To develop an annual audit plan, execute the annual audit plan, evaluate and assess significant merging/consolidating functions and new or changing services, processes, operations and control processes coincident with their development, implementation and/or expansion.
• Issuing periodic reports to the Audit Committee and management summarizing results of audit activities and keeping the Audit Committee informed of emerging trends and successful practices in internal auditing.
• Assists in the investigation of significant suspected fraudulent activities, if any, within the Company and notifies management and the Audit Committee of the results.

Tax Manager
Report to the Senior VP and CFO.

Responsible for:

• Coordinating various Company tax matters, including the preparation and filing of international and federal and state income tax returns,
• Preparation of the Company’s estimated tax provisions reported in the Company’s financial statements, estimated tax payments to applicable tax authorities, tax research and tax authority audits of the Company.
• Company’s tax planning initiatives and ensures compliance with all tax and related regulations and requirements.

Accounting Systems Manager
Report to the VP and Corporate Controller
Responsible for:
• The design, development and maintenance of the Company’s primary financial system .
• Serves as the liaison to Information Technology (IT) to add, modify, upgrade or otherwise change software features and functions, including the development and maintenance of reports.
• Responsible for end-user assistance and support, including developing and delivering end-user training and ongoing end-user application support.

Senior Business Analyst
Report to the Senior VP and CFO.

Responsible for:

• The design and documentation of the business processes and functional requirements for the Company’s primary cost accounting system which includes invoicing, estimating job costing and profitability analysis.
• Developing detailed functional requirements and completing process flows for identified applications. This position interfaces with all business groups in the Company.

Cash and Credit Manager
Report to the VP and Corporate Controller.

Responsible for:

• Both cash management and credit management.
• With respect to cash management, the Cash and Credit Manager is responsible for maintaining and tracking bank account balances, cash transfers, debt payments, investing cash, managing wire transfers, maintaining accurate Company credit information on the Company’s operations and other Treasury related functions as assigned by the Senior VP and CFO.
• With respect to credit management, the Cash and Credit Manager is responsible for administering the Company’s client credit policies, client collections, credit approvals for new clients and client data maintenance in applicable systems.

Senior Accountant
Report to the VP and Corporate Controller

Responsible for:

• Providing accounting support to the VP and Corporate Controller, preparation of journal entries, various Corporate account reconciliations and analysis as well as select financial statement preparation.
• Managing and maintaining the Company’s Asset Management system, supervising the Corporate accounts payable processes and serving as a backup for Corporate accounts payable and payroll personnel.

International Accountant
Report to the VP and Corporate Controller

Responsible for:

• Providing support for the accounting functions performed by personnel located in the Company’s overseas operations.
• Interfaces with employees in various overseas countries.
• Responsible for various Corporate accounting duties, including preparation of the annual budget, financial statement consolidation of the overseas operations, business planning, taxation and assisting with financial reporting.

WHAT ARE THE QUALITIES OF AN ASPIRING CHIEF FINANCIAL OFFICER/FINANCE DIRECTOR

slang — Tue, 20 Oct 2009 06:21:44 +0000

In the course of your career development whether you have started as a treasurer, accounting supervisor to financial controller, many of us aspire to reach the post of either Finance Director Or Chief Financial officer (CFO). So what are some of the qualities that companies would select for such post?

Experts advocate the following skills and attributes of what an aspiring CFO should have :

Have an excellent communication skills to deal with the board and external clients
Be good at people management-increasingly CFOs are dealing with large teams, often in remote locations
See and be seen by those that matter-build networks and talk to colleagues
Be commercially minded and be a business strategist
Have a range of finance experience-avoid been seen as to much of a specialist
Know the business-be prepared to take sideways step to further your skills
Build up a broad portfolio of skills, including accounting,tax, IT, HR and risk management

Besides the above skills and attributes, companies also look for candidates with an unblemished record and reputation. Due to recent turmoil, many companies may also now be looking for someone who has been through a downturn before.

The Changing Role of Finance: Business Partnering- A Small Example ( Part 5)

slang — Tue, 20 Oct 2009 05:05:28 +0000

Finance role in business partnering

In my four part articles on the changing role of finance, I have frequently mentioned the word “business partnering with operational heads” instead of allocating over substantial time on transaction processing role.
I have also mentioned earlier that transaction processing role should be there but if it of low value transaction per se then it can be easily taken over by internal or external outsourced partners like shared service center or bankers who provides similar services for accounts payable and receivables and others.

In my first part of my article, I have mentioned some areas for financial executives to look at so as to partner with the other heads of department like for example :

· cost-effective support services;
· managing business risks;
· support growth opportunities;
· developing key performance measurement tools .

To share with you again, on the aforesaid emphasis, recently I saw an advertisement from a multinational company seeking the service of a qualified finance manager which asked for the following role:

Partner with operations leadership to drive key business initiatives and deliver cost target
Support the operations leadership by continuously seeking cost reduction opportunities, improve cost efficiency and productivity

Hopefully, more financial executives understand the point on business partnering. Personally, I have seen senior financial executive more tuned towards doing the mundane job of monthly reporting and confining themselves to their own finance department. Familiar wordings like if the operational personnel wants it, they will come to see them. The word proactively and continuous partnership might not have strike their minds.

The Changing Role Of Finance Function: Creating A Vision Statement ( Part 4)

slang — Tue, 20 Oct 2009 02:30:20 +0000

EXAMPLE of a Finance Vision Statement for Business Partnering

In Part 3 of this series of articles, I have also advocated the importance of having a vision for the finance role.

Example of a Finance vision might include statement like:

Be a business partner to other business unit operating managers by offering strategic financial advice
Build on a world-class finance processes and activities
Overcome organization barriers by building trust, establishing accountability and keeping our promises
Deliver the best possible basis for decision-making to business units

During the process of designing a Vision statement for the finance role, the following should be considered:

PEOPLE perspective:-

maximize the capability and competency of the finance staff
proactive and creative
willingness to take risks, challenging line management
communication and people management skills
strong knowledge of the organization and a network of relationships

PROCESSES:

accurate, timely financial information with minimal manual intervention
streamlined, standardized core processes across the company
automated interfaces from feeder to core systems
inconspicuous control systems targeted at key risk areas
easy access to external data

SYSTEMS:

easy-to-access information
financial information available electronically to end users worldwide
user-friendly, state-of-art decision support tools
flexible information delivery systems to respond to changing needs

ORGANIZATION:

highly responsive, lean and flexible
alignment around processes and customers
decision-making delegated to where expertise and knowledge reside
flexibility to form multi-skilled teams to deal with ad hoc issues

When designing, it’s important to be realistic that you cannot move forward if your own finance team is not ready whether in terms of the required manpower or skill set. Similarly this also applies with improper system or infrastructure or processes and top management not buying in or lack the proper endorsement level.

Positioning In The Transformation Of Finance Role

slang — Mon, 19 Oct 2009 15:04:15 +0000

In a meeting or workshop amongst your fellow operating managers where you are presenting certain salient points you might hear your top or senior management addressing you or your staff as from “Accounts” teams.

How do you feel about this?

Well by asking such a question you might think that I am trying to be sensitive about this addressing/wording but rather that in my previous articles pertaining to the transformation of finance role and traits of a first class finance team, it is in fact important that we should attempt to “position” the finance image in a more aggressive manner.

Let’s go back to simple basics:

Accounts to most layman or management would means the keeping of books ( in reality this is book-keeping) or the best preparation of the financial statements for the various stakeholders.

What about finance? – finance management is the managing of the company’s liquidity and profitability and finance which also encompass budgeting, other management accounting role, financing like the sourcing of the much need funding in a timely and correct quantum.

My two cent’s worth is that we should start positioning/ “publishing” ourselves as:

The “Finance” team;

Built up a finance directory where all other internal operating managers are aware of our presence as financial advisors/business partners and to facilitate work flow and
Changing such mundane name of assistant xxxxx to more meaningful name like financial analysts.

Well you might wonder whether I am trying to encourage you to put up cosmetic to your finance team but I assure you that this should be part of the integral step to improve the finance image in your organization. Of course, I am also assuming that you and your team are working very hard to move forward toward the transformation role as mentioned in my earlier articles.

Also, don’t forget branding is indeed a very important tool and why shouldn’t it applies to our finance role?

Finance Role – Business Partnering – Illustration

slang — Mon, 19 Oct 2009 11:20:17 +0000

An actual example of Business Partnering

In my previous articles on the changing role of Finance, there were mentioned about finance’s business partnering with other operating managers, the importance to emulate certain traits of world class finance team, seeking and improving performance metrics like cash conversion cycle and many others.
Today’s article reported in The Star pertained to an actual successful Malaysian, Mr.Tan Wee Seng who was named The Most Outstanding CFO in China last year. He is the CFO of Hong Kong-listed Li Ning Co Ltd, a Chinese sportswear.

Before we proceed let’s have a brief background on Li Ning Co Ltd:

“The maker of sporting products, a Beijing –based company was founded by the Olympics gold medal winner Li Ning, is now listed on the Hong Kong Stock Exchange (HKSE) with a market capitalization of HK$7.5bil. Li Ning shares were floated in June 2004. The counter is a component stock of the benchmark Hang Seng Composite Index and a constituent stock of the MSCI China Index Series. The revenue and net profit have grown by leaps and bounds over the last three years. Last year, revenue surged 30% to 2.45 billion yuan (RM1.1bil) while net profit jumped 52% to 186.8 million yuan (RM85.4mil).”

To pursue company’s excellence Tan’s since joining the company in January 2003 has:

Managed to push through new management concepts and eliminate the “emperor-led” management style that had taken root in the company for years.

He introduced corporate culture of integrity and the practice of corporate governance and transparency;

Improved cash conversion cycle like inventory control and the shortening of the debt collection period to strengthen the balance sheet and enhance shareholders’ value. One typical example is the clearance of unsold stocks that were gathering dust in the warehouse even at a discount price and hurting the bottom-line. He managed to recover 30 million yuan from the old stocks and reduced the inventory cycle to 86 days from 164 previously.

Managed a dividend pay out of 100 million yuan prior to the listing exercise

Tan kept Li Ning’s net profit margin just between 7% and 8% to pursue spending brand building and research and development. This is to pave the way for future growth. 15% to 16% of the revenue were allocated for brand building and 3.4% of the cost of sales for research and development. Due to the stepping up of product development and brand building, the company’s products gained popularity, was ranked as one of the favourite local brands by national broadcaster China Central Television last year.

The above bore facts that the role of finance is towards increasing shareholders value. The ability to convince and persuade top management, Board of Directors and fellow operating managers will definitely be part of the ingredient of success of a good CFO.

Role Of Finance – Skillsets for Business Partnering

slang — Mon, 19 Oct 2009 10:56:01 +0000

Skillsets for finance business partnering role

In my previous articles on the changing role of finance, I have mentioned about business partnering against transaction processing.
Here in this article, I would like to elaborate further that to be able to do business partnering with other operating managers it is essential that we should first:
Know/Understand The Business Very Well :

Shows a good understanding of issues relevant to our overall organization and business;
Keeps that knowledge current and
Knowledge of the processes/key concerns common to all businesses and
Be proactive instead of reactive to challenges

Sharpen Our Business Advisory Skills:

Anticipates and takes initiative to identify customer/client concerns and proposes recommendations as appropriate and
Able to interact with the customer/client as a business partner.(interpersonal skills)

Be Strong In Financial Analysis:

Ability to interpret and draw conclusions from financial/business information;
Able to review a proposal or transaction and determine the future effect on our business.

Be Strong in Planning and Organizing:

ability to set goals;
develop strategies and schedules for meeting those goals;
anticipates obstacles and defines alternative strategies;
schedules and coordinates work of others;
sets priorities;
establishes efficient work procedures to meet objectives

Needless to say, as accounting(financial, costing, management) is our forte, we should be proficient by having the knowledge and able to apply them in terms of the following aspects:

forecasting,
income determination
cost effectiveness;
performance evaluation and decision making;
a good understanding of operations, cost systems and procedures;
the ability to develop, interpret and present cost data to aid in controlling current and future operations.

So, you have sharpen your skills, I believe you can now add further value into your business partnering role. By acquiring such skills, we can then differentiate the mundane processing role of Accounts Payable, Receivables, Order taking and other bookkeeping or accounting work which can be easily outsourced either internally (SSC) or externally (banks, third party, etc)

Financial Planning as One of The Key Finance Roles (Part 1)

slang — Tue, 13 Oct 2009 03:28:19 +0000

In my articles on transformation of finance role and the recent article on finance personnel embarking another role of gathering and analyzing the financial competitive analysis, I again now touch on another critical mass of finance role which is financial planning.

Gone are the days, when keeping the books of account accurately and the timely submission of the financial report to your boss completes your whole cycle of your financial role.

What really is financial planning? What is the contrast with accounting?

To say simply and

If I may say so, when you are involve in the accounting aspect, you are only a “historian”, you take care of the aftermath of events in the business which culminate into the financial figures you are churning out.

Whereas, financial planning is an area where you are “crystal gazing” or forecasting before the financial result is out. Of course, you need to ensure that the actual compared to forecast should be much closed. Normally, the variance should be plus minus 3-5%.

Hence, financial planning (crystal gazing) is the forward planner whereas the accountant (historian) will pick up all the actual financial transaction and translated into financial accounting reports.

In a multinational organization, this role is segregated with the presence of a financial planner and an accountant to take on different role.

However, for most of the organization, the accountant is the one doing both. Hence, because of this so called crammed up of work and manpower limitation, financial planning role has never been able to be fully appreciated by the financial accountant.

Cost Reduction/Awareness/Effectiveness – Suggestion KPI ( Part 3 of 4)

slang — Fri, 05 Oct 2007 08:01:56 +0000

This third part relates to some suggestions on KPIs that can be established when a company is conducting a cost awareness or effectiveness exercise.

Some suggestions are:

1.Targeted Cost Reduction

Each department tasked with identified suppliers/costs and % Y-O-Y tasked to reduce
Key Performance (Cost) Indicators (KPI)
Periodic Tracking and Review

2.Leverage on commonalization of suppliers base

Target 2/3 suppliers for common products and services

3.Return on Investment (ROI) on all cost outlay

Cost Trade-Off Analysis
Whether it is a profitable option
ROI Impact Analysis

4. Propagate to All Operating Managers On spending “constructively or effectively”

Have the mindset right by asking what if the money is yours and how would you like to spend it effectively?

5. Reward Achievers

Yearly Bonus Matrix (With Achievement Multiplier Factor)