Dear Aunty B,
Six months ago I took over a family business. I thought when I came in that one of the strengths of the business was the finance team, a very blokey group who are tight knit.
But I find the accounts are not properly reconciled and I get monthly reports nearly two months after months end. The finance team says I have a “housekeeping” approach to the business, as cashflow is strong. Sometimes when I go to talk to them I feel like I am banging my head against a brick wall!
They also have very close relationships with suppliers and keep telling me we are getting great deals when I ask them to see if we can cut costs. I feel like I am being kept in the dark, but I also don’t want to micro-manage.
Sales, marketing and management are my bag, not finances. To complicate things further, I have a very financially savvy investor and I think he feels I am not on top of this. Am I out of my depth with all this?
So you have a house keeping approach to finances… What I would do if I were you is pick up a broom and chase your tight-knit team around the kitchen. It is impossible to micromanage finances, particularly in a new business.
These blokes are just playing the old game of protecting their turf when the newcomer takes over.
But don’t worry. You have the perfect strategy at hand. Restructure the finance team. Bring in a chief operating officer; it sounds like you have the size to justify this. Sack the most belligerent of the team. Insist on timely monthly accounts and reconciled monthly accounts. Sit down with the new CFO and run through all the costs to see what you can cut.
Also put in place a program to negotiate with suppliers to improve margins. It is great you have good cashflow, but it can always be a lot better!
Your last question – are you out of your depth? Only if you can’t make the hard decisions. It seems to me you know exactly what has to be done. So go and do it.
Your Aunty B.
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