The power of effective financial partnershipsPublished on: 29 November 2022
The efficiency of a finance partner depends on their capacity to lead a partnership as well as the commercial leader’s commitment to use the finance partner optimally at all times. While this is easier said than done, it isn’t impossible. When developed, this particular connection is crucial for reducing waste and fostering focus — both of which help businesses handle day-to-day issues successfully.
What successful partnerships mean
It is important for the finance department to be more than just a bookkeeper for the company. They must make a qualitative and quantitative contribution to the strategic initiatives of the organization. To accomplish this, the finance department must exit the conventional control and efficiency management position (a difficult feat for the majority of accounting professionals) and enter the performance and execution realm. Once this collaboration is established, it will have a lasting effect on all organizational operations and prove beneficial during both good and bad times. As a result, all parties involved would be in agreement about which steps to take and which to ignore.
Traditional finance activities are a lot more transactional as compared to financial partnerships which are strategy-oriented, customer- and business-centric, and focus on the end goal. This is important for effective business partnerships as they leave more time for other crucial organizational functions. Adopting automation, leveraging business intelligence tools, and acting on business insights enable better decision-making and efficient data management.
The stakeholders for the finance team will include both internal (for all functions) and external (agency and direct customer) parties. Once a well-defined partnership has been established with an equal focus on all traditional and business partnering aspects, it will create an ecosystem that will help drive meaningful growth where all stakeholders are able to perform optimally. This way, the finance team supports all stakeholders with appropriate data and insights. It will further assist all teams to perform efficiently and utilize financial analytics to address business-critical situations.
FFM’s business partnerships
As an example, if a particular country is unexplored and we want to increase our footprint there, the finance team will support this strategic move by confirming the market size, product mix offered, the profitability of the parent company, dealers or agency, the move itself, and its sustainability. A thorough and well-informed business expansion enables us to make better strategic decisions and grow our business with long-lasting, strong partnerships.
Additionally, it reveals the resources and efforts required to achieve this and aid in calculating the critical mass to break even. All of this must, of course, be in line with the company’s broader financial objectives or KPIs. A strategic move isn’t enough; a holistic approach plays a key role in ensuring business growth.