Page 5: Monitoring and controlling performance
While the Commercial Manager is generating enough sales to meet the forecast, and the Personnel Manager is controlling the agreed staffing budget, the Financial Manager will monitor all other costs. Costs are broadly broken down into direct costs and indirect costs. Direct costs are those clearly identified with the sales volume. They include carrier bags, food waste and staffing costs. Indirect costs include stationery, telephone expenses, security and electricity.
Making the store more profitable involves looking not just at the large direct costs but also examining the smaller indirect costs. (Savings in stationery in one store may be small, but across the whole Marks & Spencer Group, it may represent a considerable sum.)
Some costs are easier to control than others. For example, notices near light switches may be a simple way to save electricity by encouraging staff to turn off unnecessary lights. The use of stationery may simply be limited to the amount ordered. Costs such as theft and loss, however, may take up much more time, involving maximising the benefits of close-circuit television, using security guards efficiently to deter crime and deciding how to use store detectives. With around 35 tills in an average store, possibly being using by up to eight to ten staff each day and with large volumes of stock coming in at the back door, it will also involve close scrutiny of all areas of business organisation.
The Financial Manager is also a Line Manager with established responsibilities for decision-making. Every store has an administration office comprising a team of people dealing with expense-related issues. The team may be between 2 to 25 staff (depending on the size of store) and may include a Finance Supervisor reporting directly to either the Financial Manager or Assistant Financial Manager. The team will also be responsible for security staff.
The administration office is responsible for various information systems, such as Food Stock Management, Textile Ordering and Point-of-Sale information from the tills. Although staff across the store use these systems, reports from the systems will be extracted by the Financial Team for accounting purposes, for example, information from the tills provides key sales information which feeds into staffing costs. The Financial Manager will be consulted when problems arise with these systems and will take responsibility for decisions which have to be made. They will be responsible for data protection and computer security.
The team of managers within the store are not there all of the time, particularly when there is late opening. From time-to-time, therefore, the Financial Manager takes responsibility for the whole store, dealing with operational problems wherever they arise within the store, such as a customer problem, a distressed member of staff or a stock issue. The Financial Manager takes joint responsibility for legal requirements within the store, such as temperature issues, pricing issues, hygiene and waste disposal.
Problem solving is not just about day-to-day issues. It also involves understanding the complex relationship between variables so that the Financial Manager can respond flexibly to locally-based issues and problems as and when they arise. This may include feasibility issues, such as advising about the costs and benefits of working on Sundays, which may require considerable research and planning. The Financial Manager may also advise about general opening times.
Acting as an auditor
The Financial Manager acts as an internal auditor responsible for many different areas within each store. Every year, the store will be audited by the Company’s internal audit team from Head Office. The Financial Manager will therefore develop an audit trail for key issues which show the paperwork and procedures followed in responding to a particular problem to prove the integrity of the Company’s procedures.