Three ways your financial manager should keep your company healthy

It’s that time of year again. Sit in any meeting room and you’ll hear a round chorus of coughing and spluttering. Go to a movie cinema, and you might confuse it with a doctor’s waiting room. Everybody’s battling sniffs and coughs, sore throats and runny noses.

The pharmaceutical companies take to the airwaves. Suddenly, there are seventeen different new ways to boost your immune system. Pharmacies suggest you get this year’s flu shot; others say you should double your vitamin intake. At the end of the day, though, there’s no quick fix to either getting or staying healthy. Research has shown that good health involves a number of factors, including a balanced diet, regular exercise, sufficient sleep and keeping stress levels moderate. How well you manage this series of factors will determine the extent of your overall health.

In the same way, every company faces the ‘winter’ every now and then. You might find that your cash flow is running low; it could be that there is an unexpected slowdown in the market, or that your biggest client suddenly cancels their contract. Little coughs and splutters are unavoidable, but there are ways of keeping your business in good health overall. In charge of that process is your financial manager. Here are three ways he can keep your business in peak condition:

1. Cash flow management: how your financial manager gives you a strong immune system. You’ve met those people who just never seem to get sick. They usually have a few things in common: A strong set of resilient genes (which, sadly, you don’t have any control over), and good day-to-day health habits (which you do).

Your financial manager can help your company put those great daily health habits in place by outlining a strong cash flow management system. He or she can plan rigorously and ensure that the company always has the money on hand to cope with the ongoing demands of the business. When you encounter new ‘bacteria’ — in the form of an unexpected cash demand – your company will have the system strength to cope with it.

2. Financial planning: how your financial manager keeps your stress levels at bay. Just as good health is contingent on keeping your stress levels at a tolerable level, so financial health is contingent on your financial manager controlling the level of ‘stress’ that the company must handle at any given time. It all comes down to good planning – anticipating what the company will need and when; and making sure that you’ve generated the means to provide it. A great financial manager plans with foresight, but uses scenario planning to cover even unexpected eventualities.

3. Contingency reserves: how your financial manager helps you weather the ‘winter’. In spite of having a strong immune system and keeping stress levels moderate, your company is still going to face those high risk periods, the proverbial winters. For some companies, this might come with a cyclical busy season and quiet period. For other companies, this might come with supply chain complications or logistical issues. Still others might face the ‘winter’ as we weather the economic difficulties faced country-wide by our customers.

Either way, your financial manager should have contingency reserves in place to help you get through. She’ll give the company its double dose of vitamins by ensuring that there is extra cash stored up in high risk periods, or stock that can be liquidated quickly if needed.

There’s nothing like feeling energised and healthy, especially when everyone around you is under the weather. Make sure you have an expert financial manager on your team to ensure that you do. Contact The Finance Team to find out more about a part-time or interim professional who can play this role for your business.