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Can you hear us?

Getting finance’s message across to the rest of the business requires skill, patience and focus.

Can you hear us?
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A good finance team knows the numbers, it knows how the business runs, what its risks are, and what the key drivers are that push the company forward. But even the smartest team needs to know how to communicate its wisdom – after all there’s no use generating insightful data if no-one outside the team with the power to use it can’t understand it.

Bart Adam can look back on a long career that began in operations but led to the finance function and ultimately the CFO’s office at Securitas, one of the world’s biggest security companies. He’s been on both sides of the fence; out in the business on the receiving end of financial information, as well as facing the challenge of explaining what the financials mean for the future health of the organisation.

So, can the two tribes ever see eye to eye? “You can create a good synergy between the two,” he says, but the key is to understand who you’re working with and what they want.

“From the finance perspective I learned you have to be prepared to ask questions of the business – try to understand the drivers behind the numbers and don’t approach it with a pre-conceived opinion.

“Ask open questions and try to encourage your colleagues to do the same. Doing that creates a good learning environment, for yourself and the business as a whole.”

Once he had jumped the fence and taken on a finance role, Adam was careful to maintain a close relationship with those outside the finance function.

“It’s a piece of advice I give to every young finance person: try to get as close to the business as you can, and spend time in the reality of the business as well. If you work in a business that produces something, go and work on the production line.”

And with the rise of the connected business and the exponential increase in the amount of data available, the importance of making data relevant and understandable has never been higher.

Neal Tanner is currently financial controller at Higher Ed Partners, and was recently awarded fellow status at the IFA. He says that, although he has access to all kinds of sophisticated datasets, expecting non-finance types to absorb the insights hidden therein is a recipe for disaster.

Instead, he uses personal finance examples as a way to impart some basic finance principles.

“I’m trying to get them to think about the impact on the business. For example, cashflow. When you’re looking at forecasts, inventory management or factoring, I say to the individual: ‘Think about your monthly salary, how much the mortgage payments are, what holidays plans you have, what are you saving? Then inventory management – how long is your car going to last, when will it need to replace it? How much will it cost?’ By getting them to think in that way, using personal scenarios, can really help.”

Andy Brown is a portfolio FD working with companies in both executive and non-exec roles. He’s seen many internal finance teams – good and bad – and says there are a number of typical traits that the best ones share when it comes to communicating.

“They tend to be consistently reliable, confidently humble, proactive and empathetic to their position and role,” he says. And when it comes to getting the message across, there are some good habits to pick up.

“A practical tip could be to consider writing a (short) monthly report, maybe even just bullet points – whether you report to the board, or another member of the finance team. By developing the discipline of writing them a regular report might empower them in their role, and curry favour for you; because its worth remembering we each have a unique perspective of the business we work in, and if you take a little time to consider what you know, it could be useful.”

Brown uses the example of a change in the contact name at a key customer as a good opportunity: “It might not be much at all, but it could also be indicative of larger changes in that business, which could bring new commercial opportunities, or, potentially highlight threats,” he explains. “So, your sharing one piece of information might be the second time your colleague recently heard something of interest about that customer, and could prove valuable in the bigger picture.”

And understanding the bigger picture is the key.

“What we sometimes say at Securitas is this: it’s better to be approximately right than exactly wrong,” says Bart Adam. “What we mean by that is this: it’s more important that you understand the numbers and the drivers of the bigger picture than getting completely obsessed over spreadsheets. It also means understanding what’s driving the numbers and how it fits together.

“Spreadsheets can be wrong, remember, so they need to sense check what they’re using. Just accepting whatever is spat out can be a mistake. Ask, does that make sense? Do I understand it, can I connect it to other aspects of the business? And then they’re sending out some really valuable information.”

Tanner agrees: “You can’t expect to have that granularity at all times – businesses move too quickly these days. I enjoy trying to explain some of the underlying trends to them – they’re selling fewer kettles, but why? Is it because it’s too slow to boil? Are the materials deficient? Looking into the reasons and the drivers is where finance can really add value.”

Andy Brown says that providing narrative and context is vital: “The board may be considering decision-making, risks and financial performance. When reporting, don’t just say what has happened, say why, or what the consequence of that is.

“For example, don’t just state a fact like “sales last month were £4.07m”, make that more useful. Last month sales were £4.07m; this was 3% up on the previous month (£3.88m), and was significantly impacted by a large £0.4m one-off order from customer X, which is not expected to recur again soon.

The forecast for the current month is Y…” More questions than answers Of course, the perception of finance from those outside the function is one of the biggest blocks on clear communication: for some in ops, sales or marketing, finance operates as a ‘deal prevention unit’, there to stymie their next great idea by declaring it too expensive; or, worse, accountants cannot see beyond the edge of the spreadsheet and don’t understand the need to take risks and drive the business forward.

Andy Brown says accountants have to vary their approach: “Be prepared to be humble; don’t feel pressure to make something up in the moment, for fear of not knowing. Honesty leads to trust; it is better to say to a colleague ‘I’m not sure, let me check and come back to you’ than to exude confidence in a response that you are not certain in what you are saying. If you turn out to be wrong, it could be costly, but also, will undermine others’ opinion in the future.”

Bart Adam agrees: “Sometimes you have to admit you can’t answer – either because you’re not allowed to, or you simply don’t know. Being clear about that will make the counterparty respect you,” he says.

Adam also makes sure that before any important meeting to run through the likely questions that he might face. “That helps me prepare: what do they want to know? In most cases they will raise those very questions and you’ll be ready.”

But of course, accountants should be prepared to partner their humility with confidence. “Don’t feel the need to apologise for not knowing something you wouldn’t be expected to,” says Andy Brown. “Take the opportunity to return to your colleague with a better answer and more information.”

Christian Doherty is a freelance journalist

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