Page 3: Managing finance
In order to operate, a business needs resources. Whether these resources are physical resources, such as property, equipment and materials, or less tangible human resources, money is required to pay for their use. As a result, the management of finance is inseparable from the management of the business as a whole.
Controlling costs is a key element in the process of financial management. It involves having a good knowledge of the business and the costs involved and enables managers to:
- evaluate alternative courses of action for business planning
- measure, analyse and control performance against objectives.
The Financial Manager
The Financial Manager has the most varied role of all the Store Management Team. In any one month, the Financial Manager could be dealing with issues as diverse as planning for new systems implementation, preparing and interpreting the quarterly profit statement to influence the priorities of the Management Team, or even working with other retailers and the Local Authority to help address current security issues. As a key player in the running of a store, or region of stores, the role of the Financial Manager is to develop ways of making the stores more profitable. The Financial Manager is responsible for providing timely and accurate data to manage each store.
Everything a Financial Manager does will have a direct impact on each store, although it is less immediately visible to the customer. They are actively involved in the day-to-day management of the store and need a good appreciation of all aspects of its operation. For example, in the same day, they may be looking at the financial implications of a new delivery schedule, discussing a new store development, thinking about the effects of opening on Sundays, as well as assessing the costs and benefits from the use of security cameras. It is important that the Financial Manager is able to discuss ideas, and using various methods of analysis, to make final recommendations on whether they will improve profitability and should therefore be implemented.
This type of practical, locally-based financial management is for people who are logical, analytical and business-minded. In a commercially-driven environment, they will need to be a financial advisor, systems expert, team-leader and retailer. Attention to detail on a day-to-day basis is important but they must also be a strategic thinker with the ability to plan ahead to shape the commercial direction of the business.