How To Become A Value Creating Financial Department

Each company's financial departments are faced with different situations, and the changes to be made are different.

The principles of change are easy to overcome and difficult to follow.

I take a friend's case as an example to illustrate that "change brings value."

For a financial department with pursuit and ideal, it will not only be satisfied with the location of logistics support service department, so as to seek pformation and development, and become a financial department with three types of accounting support service department, control management department and value promotion department. It hopes to play its due role in the future intelligent planning of company's future planning, operation decision, execution control, performance evaluation and so on.

If we do not pform, we can honestly do an account bookkeeping account. Can we?

But have you ever thought about the meaning and value of your work? Everyone has just finished the summary of their annual work. Has it been found that we can find out the dates and figures of last year's work summary and continue to use this year? If so, we can say that we haven't made any progress in the past year, and the work of the finance department has not had any achievements and highlights.

Of course, we can do nothing but make some basic decisions.

For example, the collection of original bills, the entry of credentials, and the registration of books.

However, I would like to remind you that standardization work will be replaced by machines more and more. If we do not pform, it will mean that our accountants may lose their jobs. Only intelligent planning, decision-making, control, evaluation and so on will not be replaced by machines.

A lot of people think that the above saying is "crying wolf", but when the popularity of computers in the 90s came up with similar opinions, financial and accounting personnel were not replaced by computers.

What I want to say is: maybe you haven't felt the crisis yet, but there are more and more cases showing that this time is "the wolf is really coming!"

Not to mention Intel, IBM and other international companies, China's ZTE, HUAWEI, Sinopec, China Telecom and other companies already have financial sharing service centers, and more and more companies are building or planning to build shared service centers.

The sharing service center has greatly improved the efficiency of the basic accounting work. The basic accounting work that originally needed 10000 accounting personnel may be completed by only 2000 or even fewer people, while the remaining 8000 accountants were either pformed into intelligent management accountants or unemployed.

The financial sector structure of a large company has changed or has changed dramatically from the former functional structure to the Strategic Finance (value creation), business finance (management and control), shared service center (basic standardization work), functional finance (funds, taxation, etc.) that are compatible with the company's development.

The biggest worry for the chief financial officer of some large domestic companies I met now is the problem of how the original accounting staff had been arranged after the construction of the shared service center.

Some people would say, I am only engaged in small businesses.

It will not face similar reforms of big companies.

The challenge for Financial Accountants of small businesses in the future is the socialized sharing service center, the agent bookkeeping company.

Therefore, borrowing the most fashionable term "supply side reform", our accountants also need to supply side reform. Nearly 20 million accountants in China can see that there is no shortage of accountants, but there are too few financial personnel who understand strategies, understand investment and financing, understand management and control.

Some friends have suggested that in most enterprises, the financial sector itself is a disadvantaged sector. The environment of the chief financial officer of Chinese enterprises is not ideal. The chief financial officer of the enterprises in Europe and the United States is often recognized as the second or three in the business. But the chief financial officer (Chief accountant) in Chinese enterprises can always enter the final leadership even if he can enter the corporate leadership.

Therefore, it is difficult to shift from bookkeeping finance to value creation finance.

Moreover, although many friends in financial work have suggested that the financial department should not only be a logistics support service department, it should also be a value creation department, but in the most deep-rooted sense of non-financial management, the financial department should be just a company's post support service department (including the location of the financial department in Ren Zhengfei's mail). Therefore, financial pformation is difficult to get the support of other senior executives of the company, which is much more difficult.

My personal view is that it is because it is difficult that it is valuable; when we can not change the external environment and the concept of others at the moment, we can change ourselves now; financial pformation is not only a matter of top management but also whether we have the awareness and ability of pformation; whether the financial sector can establish authority as a strong department, the key is to let us see in the work that we can help the development of the company.

The financial department of a company is only a logistic support service department, or is a logistic support service and value creation department. In the final analysis, it is not the financial department that talks about itself, it can be decided, nor is it the leader's speech, but it needs the financial department to determine the actual performance brought about by the work.

Although we have repeatedly said that we should become a value creating financial department, it is very difficult for the financial sector to create value.

When is the value of the financial sector reflected? Some friends have attributed the value creation of the financial sector to tax planning, foreign exchange risk management, capital management and reducing the cost of capital, and making full use of all kinds of preferential policies. I also agree that this is the embodiment of the business value of the financial sector.

These aspects reflect the more valuable part of the financial department's job, but still fail to look at the value of the financial work out of the financial sector. It is still difficult for the management and other departments to agree that the finance department is the value creation Department of the company.

In my opinion, while we are doing a good job of creating a valuable financial position, we must jump out of the financial perspective and finance is a company's capability, such as the company's R & D capabilities, marketing capabilities, and so on, to create value for the company.

So when will finance be a capability of the company? I attribute it to six words: change brings value.

When the work of the financial department brings a good change to the management and business of a company, we can truly feel the value and performance of the financial department. At this time, we do not need to say that the concept of the corporate leadership will naturally change, and the finance department will naturally become a professional and authoritative department in a company.

This change starts with our financial department itself and starts with enhancing our own strength.

My friend entered the financial department of a central enterprise in Beijing after graduating from graduate school in 1999. His performance was excellent. After a few years, the company promoted him, but there was no suitable location for headquarters, so he was sent to a two class company in the province as chief accountant.

The top two executives of the company are all from Beijing Province, except that he comes from other parts of the country.

In this case, we all know that when he first arrived, he had a good time.

But my friend still has two down son.

Just a few months ago, I settled down my attitude and understated the company's situation, and then found a suitable time to report the work to the chairman and general manager, and put forward the company's "three high" problems.

Which "three high"? High bank deposits, high bank loans, high interest costs.

Why does this happen? Because, as a group company in the construction industry, there are many subsidiaries, branches and item company. These companies have more money than they spend on bank deposits, some funds are tight, bank loans are more, and loan interest rates are higher than deposit rates.

The cost is high.

How to solve it? Sign a strategic cooperation agreement with a bank, and centrally manage the funds through the pool of funds.

The chairman and the general manager thought that this was a matter of financial affairs and did not affect his authority. He supported him and made it in that year.

In the second year, the chairman and the general manager took a look at the interest cost of the group company, and really strengthened the management and control of the subordinate units.

Next, when the chief accountant communicated with the chairman and general manager, he believed that all the procurement rights in subsidiaries, branches and item company were not only too risky but also difficult to ensure the operation effect. Therefore, we should establish a centralized purchasing center and implement a hierarchical procurement system.

With the support of the top management of the group, it took a year or so to turn the idea into reality. The purchasing process of the whole company has undergone major changes, and the purchasing cost after centralized purchase is also very obvious.

The financial sector gradually proves that the financial sector is not only a service support department or a value creation department, but also a company's capability.

By the third or fourth years, just in time with the State Council, the Ministry of Finance and the Ministry of finance, all the departments of the State Council, the Ministry of Finance and so on have all requested to strengthen the internal control of enterprises. On the basis of prophase purchase control, we should carry out comprehensive internal control in the whole company, sort out the system, optimize the process, and change the way of thinking and behavior habits of the top and business departments of the company.

One of his leading ideas in the construction of internal control is that internal control should not only conform to regulations, but also improve efficiency and improve results.

Many people think that internal control and efficiency are natural contradictions. In fact, this is wrong, and the two have been well balanced in this company.

In the fifth year, the financial department, under his leadership, launched a comprehensive budget management throughout the company.

Why is the budget management of many companies unsatisfactory? Budgetary management is based on solid internal control and process management. Without this basis, budgetary management is a castle in the air.

Therefore, many companies that do not lay a solid foundation do budgetary management, find that the budget management is not ideal in reality, and then come to the useless theory of budget management.

Therefore, the financial department should promote the change of an enterprise step by step.

Another example is the director of financial work in a public institution.

In his first year in office, he began to implement a classified financial disclosure system throughout the unit, and most of the financial information was disclosed to all employees.

This work seems superficial, but this is actually a mechanism of forced reform. The front end business department must regulate its own business behavior, otherwise the non-standard financial results brought about by non-standard business behaviors can be imagined once the whole staff is open.

In the second year, the Ministry of finance's "internal control standard of administrative institutions" was implemented, combing the system and optimizing the business processes of all departments, and standardizing the management of the whole unit.

Meticulous budget management was implemented in third years.

Comprehensive risk management was carried out in fourth years.

Every year, there are themes of work. Every year, there are changes and highlights in financial work. And every year, the management of the whole unit has undergone a good pformation, thus naturally setting up the position of the financial department in the unit, and changing the prejudices that everyone used to account, reimburse and compile the accounting department, and realized that the financial department is an important management department of the unit.

To sum up, how to make our work more meaningful and valuable when financial pformation is going on is a major issue for visionary financial staff and financial departments to think and Practice for a long time.

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