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Within a number of SME’s the finance function is viewed as an overhead, required in order to ensure transactions are processed, cash is received, and all purchases and expenses are recorded and paid. It may also be responsible for the processing of wages and salaries, plus routine reporting and the filing of any necessary returns. Such a view however is failing to “value” the finance function and invariably results in the business as a whole, being considerably less valuable. So, what should the finance function be doing and how does this add real value? The finance function should be taking a key strategic lead in the management of the business, establishing aspirations and goals and turning these into clear deliverable plans for action. From forecasting tools, it is possible to establish a view of what the future will look like if the plans are delivered but also, importantly, confirm other possible outcomes – better or worse. Such forecasts are not a once a year exercise but must be live tools that govern action in the business. Following the well know saying of “what gets measured get done”, actual performance needs to be regularly and routinely measured against plans. The creation of key performance indicators produce informed decision making, driving improved results. Empirical evidence repeatedly demonstrates how decision making based on systems of effective planning, measurement and monitoring consistently deliver significant performance improvement. Seeing accounting activity as simply one which records the past, does a disservice to the whole business but most importantly to the owners themselves, who are failing to achieve the full value of their business from improved performance. An additional benefit to the owner ever planning a sale is that a business with a history of effective financial forecasting and monitoring is more highly sought after and valued by investors. Come back for further thoughts on how the finance function can add value: • Preventing commercial disputes or ensuring positive outcomes, • Protecting the most valuable business assets, • Ensuring the business serves the interest of the owner and not the other way round. • Plotting the shareholder journey, • Addressing risks; mitigation strategies, If you would like to know more but don’t want to wait for the articles get in touch now.