Future-proofing your finance function

Simon Martin, Partner, CFO Advisory
Julian Rae, Partner, EGC Audit Lead

The role of a finance function can be broken down into four distinct ‘faces’:

• Steward – delivering accurate financial reporting and maintaining an appropriate control environment
• Operator – building a fit-for-purpose team and operating model with efficient and effective processes
  
• Strategist – providing financial leadership to shape the strategic direction of the business
• Catalyst – generating insight and partnering with the business to improve decision-making

All finance functions, no matter the size or scale of a business, need to balance the allocation of time across these four faces, recognising that at different points, the split is likely to vary, and priorities will evolve.

For fast-growing and emerging businesses, this balance is both critical and challenging, given the pace of growth and the ever-evolving list of priorities.

In the Steward area, accurate financial reporting and ensuring the correct allocation of finite resources is fundamental and a foundation on which growth and future investment are based.

As an Operator, finance leaders of fast-growing businesses need to ensure their core finance processes and ways of working are both fit for purpose in the short term but are also scalable and able to grow with the business. Investing in the right people, tools, and technologies—at the right time—is key.

The role of the Strategist often falls to the CFO themselves, who must help balance the ambitions and priorities of founders and investors with the realities of cost control and profitability. Striking this balance can determine the success or failure of a business.

The role of the Catalyst can often be under-valued in scaling businesses, with a perception that the business will ‘grow itself’. The best finance functions, though, always have a seat at the table when key decisions are being made and are on hand to provide key analysis at the right time and help manage cash and working capital.

Getting the balance of time right across the four faces is challenging, especially for lean finance functions. In our experience, the best finance teams are those that, from the outset, put in place the foundations that enable them to play all four roles effectively.

A ‘future-proofed’ finance function is one that:

One common theme we have observed from working with emerging growth businesses is that getting the basics right early on and successfully ‘future proofing’ finance can save significant time, effort, and expense in the future. Finance transformation programmes are expensive, and while all finance functions need to constantly evolve and develop, doing this incrementally (rather than as a big bang exercise, for example, in the run-up to a transaction) is a much more cost-effective approach.

Having worked with Emerging Growth companies for over 25 years, I’ve seen the value of getting the right balance between the “four faces” of the finance function. However, it is easier said than done. In reality, this can often mean the CFO is fire-fighting, going from one emerging issue to another, all in between critical actions like raising finance. However, it’s crucial to take the time to plan and ensure you future-proof your finance function and company.

This is why we recently developed our Finance Diagnostic Tool. Designed to help finance leaders of scaling businesses rapidly assess their current and desired level of performance against each of the ‘four faces of finance’. The tool can be completed in a couple of hours and helps you quickly identify any areas of required focus and ensure your finance function is fully future-proofed.

The most successful businesses are those that prioritise each of these faces – recognising that they are all important. Those companies invest early in people, processes, and technology to ensure that the business can operate ahead of where it currently needs to. This takes a strong finance leader, demanding resources in the face of other business priorities, but the reward is a leading finance function that maximises the potential of any high-growth enterprise.

Complete the finance diagnostic assessment or get in touch to discuss in more detail how you can future-proof your finance function.