Have you got all the risks in your business covered?
When we think about risk as finance managers, it’s very easy to focus on the risks that fall into our remit. Failing to comply with legislation. Breaching travel and expense policy. Falling victim to fraud.
But businesses face other risks too. And as a finance manager you’re in a powerful position to help your business spot and manage them.
In the second of our three blogs on risk and compliance, I’ll look at some of the other risks a business can face and how the finance department can help tackle them.
Everyone makes mistakes. Submitting an invoice for payment twice or not submitting it at all. Forgetting to call the client to let them know about a vital change in schedule.
Technology can help you spot some human errors. Concur Invoice, for example, will spot duplicate invoices and you’re able to see at a glance when a purchase order has been raised but there isn’t a matching invoice yet.
When it comes to errors such as failing to communicate in a timely manner, it’s how you handle the fallout that’s important. Consultant David Hand points out: “A business culture that supports employees who make mistakes is one that can better foster loyalty, effective problem-solving and high performance.”
Machinery and technology lifecycles
Nothing lasts forever. Machines will eventually need to be replaced. At the same time, technology moves on. Is your business running as efficiently as it can or could you be making better use of new technologies?
The questions about machinery and technology in your business are best answered by the relevant heads of department. But the questions about when and how the business can afford to replace or upgrade equipment fall to you.
SAP Concur gives you visibility around cashflow. It also equips you to interrogate the numbers at the click of a mouse. It means you’re able to budget for equipment replacement and advise on affordability with much more confidence.
Business policies and best practice
How do you ensure rules and policies are being followed throughout the business? Are you confident the business – and its employees – are compliant and protected in all areas?
In the finance department, technologies such as SAP Concur ensure policies are enforced on every single line item automatically.
But what about elsewhere in the business? When it comes to health and safety, for example, measures such as fire alarms or CCTV could help manage the risks. You can work with leaders to find out what investment is needed – whether it’s training, technology or a new process – and explore the most cost-effective solutions.
Having a clear strategic direction is essential. The demise of firms such as Blockbuster and HMV shows us what happens when a business fails to change with the times.
As a business you’ll be analysing competitors, assessing the market, setting goals and exploring new opportunities.
And as a finance manager you have the financial information needed to make informed decisions. How do those goals break down? Can the business afford the investment that would be needed to enter a new market?
It is vital that this financial information is readily available. When you automate your processes, you spend less time inputting the numbers and have more time to analyse them. In other words, you’re able to support the business and its strategic direction much more effectively.
A spotless reputation
When you fail to manage risk in your business, one of the fallouts is likely to be negative publicity. The saying might be ‘there’s no such thing as bad publicity’, but few of us want to find out if that’s true.
As a finance professional you’re responsible for managing financial risk and compliance in your business. But you can also add a great deal of value when it comes to staying on top of all the other risks it faces too.
In doing so, you can help your business stay in control of its growth and direction – and its reputation.