The financial management of any business, big or small is crucial to their success. There is no single success mantra to pursue in financial management services. Along with the proven accounting rules, it is the age-old wisdom along with experience which helps in managing financial services. The two rules that the famous Warren Buffet gives regarding finance is Rule 1: Never lose money, Rule 2 and the most important is never forget Rule 1. Although it is daunting, it certainly is the goal of every finance managers and financial management service providers.
Like in other management divisions, good financial strategies happen because of creative ideas and experience. They are tried and tested, but these will not be taught in any classrooms. Let us look into these rules of financial management services that goes without saying.
The rules that go without saying
Stay on top of the latest trends and rules of finance
It is expected of the financial management services to be the pinnacle of knowledge regarding anything finance. They have to know the nuances of tax laws, auditing and budgeting, which investment gives the highest return or what the promising growth areas of the business are. For this, they have to expand their realm of knowledge outside finance onto the different business areas. The SWOT analysis of these has to be ready at the beckon of the client. The only way to achieve this is to burn the midnight oil!
Use multiple reminders for the bills payable and receivable
It is advisable to set reminders at different timelines especially for the bills payable. The timelines can be set initially at three weeks prior to the due date, for example, then at two weeks, or one week, three days prior to and the day before. At each of these reminders, the finance manager should ensure the account has enough money to honour the payment. These ensure the business is highly credit worth. The bills receivable can also be tracked with such reminders.
Proper internal audit at regular intervals
The internal audit at regular intervals will help in rectifying any issues in the work processes. There are multiple benefits regarding these audits. It improves the turnaround time (TAT) and efficiency of the employees. It helps in reinventing the process and realigning to the core values of the business.
Educate the customer/ client
There will always be resistance to change due to multiple reasons. The client might think the change is not aligning with the vision of the business or might be convinced that it might demotivate the team. The duty of the finance manager / financial service provider is to study the change initiated from all angles. This will help the client to see how it will help in increasing profitability.
Set a stipulated amount as a working expense
It will be easy to track the working expense if it is a stipulated amount. Make a note of the amount at the beginning and end of the workday. This will help in finding out about unnecessary daily expenses.
Every important financial decision or changes should reach every concerned person in writing. This will be a record of the communication passed on to them. This further will give clarity to the communication. Even if the decisions are made with all the employees in the meeting, it is important that the minutes of the meeting reaches everyone.
All key personnel updated on the progress of the work
Even if it is not mentioned in any rule book, it is important to keep abreast of the progress or the details of the work to all the key personnel in the business. This will help them in making informed and guided decisions for the business. It builds trust between the clients and the financial service providers.
Listen to the disagreements more than the agreements.
It is easier to agree on a decision to avoid confrontation. Agreement with a decision might be to avoid taking risks or it can be due to lack of knowledge. So, when everyone agrees to the proposal, then question again. Listen for a difference in opinion about the matter at hand. That different perception of the matter might help in taking an approach that might lead to an optimum result to the process.
Creation of goodwill of the company
The goodwill of the company is what helps the sustenance of the business. The reputation of making knowledgeable decisions, responding well to the changing scenarios, timely output etc will increase the trust of the clients. Delighted clients are assets to the financial management services. Every step of the work has to add to the goodwill of the company.
These unspoken rules in course of time become the good habits of the business. They help create a positive character for the business. These aid in building the consistency and the transparency of the business. Diligen makes it a point to pass on this trait of goodwill and trust to its customers.