How to Create a Financial Management System

It may not be clear what a CFO does and how they can help companies improve cash, profits and long term business value. The following nine items show what is involved in building a strong financial management system.

1. Cash Flow Forecast – A weekly forecast of cash – out 6 weeks – will create a strong control discipline and enable you to look forward at least a month.

2. Key Metrics – What are your 5 key performance indicators? How do you review them and maintain focus each week or month.

3. Timely Financial Statements – Accurate and timely financial statements are essential for managing results, and maintaining investor/ bank confidence.

4. Financial Analysis – a monthly comparative review of financial and other indicators.

5. Commentary – a monthly operations overview with suggestion for improvement and strategic development.

6. Monthly Meeting – Chair a monthly meeting on the financial performance, impact on strategy and implications for change.

7. Financial Planning – Develop budgets, plans and rolling forecast to manage desired activities.

8. Cash Management – Build relationships with banks and investors to ensure company cash flow plan is accomplished.
9. Financial Control – Implement internal process and procedures to deter fraud, improve efficiency and maintain confidence in results.

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