Being credible means being able to show you understand your business, it is about being in control, knowing where you are with budgets, maintaining accurate information and using this to inform your decisions. Importantly ensuring your investment decisions are made on the basis of credible and sound reasoning. How does your performance stack up against these five points?
1. Do you actively manage your business plan
Did you put together a business plan at the start of the financial year? If so when did you last review your progress against it? Reviewing progress against plan should be part of your team's regular meeting agenda. Everyone should be clear on progress and where achievements against plan are falling short (and what actions are being taken to address these short falls).
2. Do you collect the right information
What information are you collecting about your part of the business? How can you be sure it is the right information? How are you using that information and what is it telling you? Remember if you collect information but never use it then you are just wasting yours and everyone else's time.
3. Is your information accurate and consistent
Linked to the last point - how do you know the information you are collecting is accurate and consistently reported? If you are requesting the same sort of information from different sources, is everyone reporting in the same way? For example if people are reporting on headcount are they counting actual people or full time equivalents? Are people all using the same time period, for example is a month a calendar month, or a 4 week period? Is VAT included or not included in their figures?
4. Can you always access the information you need
If you were asked to do an urgent report on your financial situation at 6pm at night and everyone else had gone home, would you be able to access the information you need? Could you understand and interpret it? and finally, is it comprehensive enough to enable you to make informed decisions based on it?
It is not just important to know what information is collected but for it to be accessible to those who need it, when they need it. If everything is kept on Tom's laptop, what is your contingency when Tom is not around?
5. Do you know your position in the corporate league table
How do your budget figures stack up against other parts of the business? You may have saved 10% in running costs but if other departments have saved 20% you are going to look pretty bad. Ensure you know what is important to the business as a whole and how your department stacks up against financial management by other areas.
In times where organisations are looking to save money and cut budgets, don't give others the ammunition to slash yours by being poor at financial management.