The Finance team looks after financial stuff – it doesn’t affect me!

scoreboardIt’s a common view in business that financial success is the responsibility of the Finance team, so we can leave it to them.  What most people don’t realise is that the Finance team are the scorekeepers.  They calculate the results from what everyone else does.  They count the goals, they don’t score them.

And that misunderstanding often means they also have to count the “own goals”.

Goooaaalll!
Next time you’re talking to one of your sales team ask them “Does 10% discount mean 10% less profit?”

If they say “yes”, you’ve got an own goal.

Think about it.  We but things for 80, and sell them for 100.  That’s 20 profit.  If we give 10% discount we’re buying for 80 and selling at 90: that’s only 10 profit.  10% discount means 50% less profit in this case.  We need to sell twice as many at the discounted price just to make the same profit!

Goooaaalll!
Whoever you’re talking to in the business, ask them whose responsibility it is to make sure the customer pays on time.

Chances are they’ll say “Credit Control” or “Finance”.  You’ve got another own goal!

Customers give lots of excuses for late payment.  We did some research with one client and the excuses included things like:

  • you haven’t sent all the required supporting documentation
  • the invoice is wrong
  • there’s no Purchase Order number
  • there are warranty or quality problems
  • the invoice has gone to the wrong person
  • the goods were delivered late

In each case, when the invoice was sent out it was clear then that the customer wasn’t going to pay in time.

Improving the score
Part of the answer to the problem is seeing the issue.  Hopefully these two examples have helped you see things differently!

Another part of the answer is knowing what to do.  That’s where training helps.  Most people think financial training is about the accounts, and it’s for the accountants.

Wrong on both counts!  It’s about working out what we all need to do to improve the numbers in the accounts.  And it isn’t for the accountants (we rather hope they already understand the accounts!).  It’s for all the people out in the field scoring the goals.

Click here to find out about our Finance Open Programme

kt25_35Wishing you every success!

Alex Hewlett

Finance Facilitator at Keyturn Training


To find out more about our highly enjoyable ‘Finance for non-financial managers’ programmes email us on enq@keyturn.co.uk or telephone the team on 01788 815500.