An in-house accountant or finance manager plays a critical role in any business. SME owners are typically entrepreneurial characters, primarily looking at the big-picture focus of growth and new ventures.
This mindset is important for success, but balancing this with a finance partner focused on sustainable growth is critical.
The right business partner should be the wise voice in your ear, ensuring you remain focused on cash flow while not losing site of growth potential.
The vast majority of our turnaround SME clients have lacked this structure.
The right person for you will depend on the size of the business and industry sector you’re operating within – their commercial perception should be a top priority.
Exact industry experience isn’t essential, however business synergies and understanding the commercial process of your company is crucial.
The position of in-house accountant / finance manager can be mistakenly seen as a required overhead that exists to ensure company books are managed sufficiently, suppliers and staff get paid and stakeholder engagement is managed.
What often gets forgotten is the commercial value and significant cost saving the right appointment should be able to deliver.
As with your sales manager, your in-house accountant / finance manager should be able to add significantly to the profitability of the organisation.
Capabilities of an In-house Accountant / Finance Manager
As well as traditional in-house financial responsibilities such as cash flow, budget control, reconciliations, AP/AR and stakeholder management – an SME finance manager should have experience working on process and commercial analysis. These are the necessary skills to look across the business and action improvements.
By giving them freedom to communicate directly with operations such as the site team or factory floor, they’ll be able to find ways of improving systems, process and controls, running through why a current process within the business is not cost efficient, and offering an alternative solution.
This includes anything from supplier reviews, customer and product analysis (e.g. 80/20- rule), stock analysis (e.g. to identify slow moving stock), and generally realigning expenses with current revenue levels.
Savings may be minimal or significant, but the focus on improvement could make a big difference to your net profit.
Well run organisations often have specialist management accountants or business/commercial analysts. These staff are the cost saving, streamlining specialists and the savings they identify often pay for their salary two or more times over – in line with what is expected of the sales team.
As well as internal process, they’ll conduct external or market analysis on your company. This will enable them to identify business growth or new venture opportunities.
Identifying an In-house Accountant / Finance Manager
In an ideal world, as a business owner or leader in your business, you will be looking for a CA/CPA who has fulfilled both a financial and management accountant or analyst role. This experience should give them the basic knowledge and skill-set to combine the traditional financial duties along with strategic analysis.
If the person you’re looking at is currently within one of these positions, you’re probably giving them their first lead position. They’re stepping up into an autonomous role and one that will allow them to add value and make their own mark, creating a career milestone.
This experience, combined with being the right cultural fit for the business and driven to step up from an entry level role, will generally mean the candidate has what it takes to succeed in an in-house accountant / finance manager role.
Throughout the interview process, be careful not to over-sell the opportunity. You will need to stress the importance of being hands on in the role as well as being comfortable at focusing on the basics as a priority which could take up the most of their time, especially in the beginning. They should not be expected to delve into the commercial elements and wider analysis of the business until they’ve got a good understanding of the day to day accounting fundamentals.
Screening questions to ask
- Describe a recent example of being ‘hands on’ within a business – Are they experienced and comfortable within an end to end accounting role?
- Can you give me an example of how you have improved system, process or procedure and the financial outcome to the business? – Can they add value through cost saving? Are they commercially savvy?
- What do you see as your main achievements to date? – Are these commercially focused and based around cost saving?
This is a process I’ve followed with a number of turnaround SME clients. Once a business is heading in the right direction, we’re looking to pass the reins over to a safe pair of hands.
An important factor is cultural fit. If you’re not naturally ‘gelling’ with the person from the outset, the chances are it won’t work.
Without that mutual respect, you’re very unlikely to offer them complete transparency into your business which they will need to do their job to the best of their ability.
Rik Blanchard is a Senior Executive with Vantage Performance – an award winning, national business transformation and turnaround firm with proven success in solving complex financial, operational and people performance issues.
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