Finance Managers
Plan, organise, direct, control and coordinate the financial and accounting activities within organisations.
Month end at Redgum
You are the finance manager of a family building supplies business, and month end reports are due to the owners in two days. It is Monday and the reports are due Wednesday. A new accounting system went in last month, a team member is on leave and one number in your draft does not look right.
Choose what you would do. Then see what happens. There are often good reasons for each choice.
The stock figure is about the same as last month, but we sold far more than usual. That does not add up. I could write it off as a timing difference and keep going, or I could spend a day digging. You decide.
Let her call it a timing difference, since the deadline is close
The report goes out on time with a number nobody understands. Three weeks later it turns out a whole delivery was recorded twice, and the owners wonder what else is wrong.
Spend the day digging, and tell the owners now that the report may be a day late
You find the double entry and the figures are right, but the owners are unhappy about the delay. A short warning and a partial draft on time would have kept them comfortable.
Have Ngozi trace the largest stock movements first, and send the owners a draft with that item flagged
She finds the error in two hours, the rest of the pack stays on schedule and the owners see a flagged note rather than a surprise. Targeting the biggest items first is how experienced finance people save time.
We closed a huge order on the last day of the month, but it will not be delivered until next week. Surely we can count it as this month's sale? My team's bonus depends on the number. Just this once.
Agree, since the order is real and the customer signed the contract before month end
The month looks better, but the numbers no longer follow the rules or what actually happened. The auditors will spot it, and you will be the one explaining it.
Say no firmly and end the conversation, because it is not allowed
You are right, but Hamish storms off feeling accused. The rule is the rule, though you could have helped him see how to report the order's progress honestly.
Explain it belongs next month and offer to show the order in a pipeline figure
Hamish is not thrilled, but his team's work is visible and the accounts are honest. Finance often says no, and it goes better when you also offer a way to show the true story.
Our bank has asked for our latest figures because we want a loan for the new yard. Could you tidy things up a bit before sending? Make the debt look smaller and the profit look a little healthier.
Send accurate figures, with a short note explaining the context behind the debt
Rosalind is uneasy, but the bank sees a clear, honest business and a sensible reason for the borrowing. Your name goes on these numbers, and a reputation for straight figures lasts.
Reclassify a few items so they look better, but only within what the rules allow
It may be technically permitted, but you are shaping the numbers to create an impression, and that is a line you want to be careful about. The bank may ask questions you would rather avoid.
Do what Rosalind asks, because she owns the business and it is her loan
The bank lends on figures that are not true. If this is discovered, the business, the owners and you personally are all in serious trouble. Being asked by the owner does not remove your duty.
How it went
The pack goes out on Wednesday afternoon, accurate and a few hours late on one section. Finance managers turn numbers into decisions, and sometimes protect the business from the people who want to look good. Would you be comfortable being the person who says what the numbers really show?
This is a simplified, fictional situation to help you explore. It is not professional instruction or a test of your ability.
Case study: The branch that looked profitable
A fictional case set in the finance team of a fictional family-owned building supplies business with five branches.
The situation
Redgum Building Supplies had five branches, and the Tamworth branch consistently topped the sales table. Finance manager Aleksander Novak noticed that its cash kept arriving later than the others. Customers there had been given long payment terms by a well-liked branch manager, who wanted to keep big builders happy. The owners were about to reward the branch with a new delivery truck based on its sales. On paper it was the star. In the bank account it was a slow leak.
What they did
Aleksander put together a simple chart comparing each branch by how quickly it was paid, not only how much it sold. He met the branch manager first, before the owners, so it was not an ambush. He explained that the sales were real but that the business was funding the builders' projects. They agreed on firmer payment terms for new orders and a friendly plan to collect the older accounts. Then he took the full picture to the owners.
How it turned out
The owners delayed the truck by a season and kept the branch manager's relationships intact. Cash improved gradually, though two builders moved to a competitor. Aleksander started including a cash chart in every monthly pack, and the owners now ask for it first.
What would you do?
- Why do you think Aleksander spoke to the branch manager before the owners?
- What would be hard about telling a popular colleague that their results look better than they are?
- How is selling something different from actually being paid for it?