Managing finances is not all that it is cracked up to be. The typical breadwinner or the person who handles the allocation of money in the family would certainly attest to that. Translate this to the corporate setting and you would certainly say that this is about a hundred times more difficult than it was in the simple home setting. Managing finances is never as easy as it may seem, not by a long shot at all. This is precisely why you need to implement an efficient finance scorecard to foster better financial management . Despite how tedious the whole process might be, you would still need to look into it because the effectiveness of the distribution of funds and resources would depend on this.
Financial management would actually demand a lot of techie knowledge because you would be handling the balancing of funds and the application of finance principles to ensure fair and productive allocation of resources. If you have a finance management team in your company, then you surely must see its members rendering several hours of overtime, especially when it is just about that time of the month when the team has to show the members of the upper management team how the company’s funds and resources have been used – basically, where these were put into.
We all know how effective a managerial tool the balanced scorecard of BSC is. Moreover, this tool can be applied in just about any industry in the corporate world today, so as long as its application is done accordingly. How can this tool be applied in financial management then?
You have to understand that the BSC is basically the management team’s way to have a bird’s eye view of what is going on in the enterprise. With the BSC applied to finance management , it would then be easier for the team to pinpoint the strengths and weaknesses of the finance management team itself as well as the endeavors that it has taken upon. Moreover, from the name of the tool itself, the BSC takes on a balanced approach towards measuring the performance of the team itself. Thus, you are sure to have metrics and key performance indicators or KPIs plotted on the scorecard that are all objective and unbiased.
Another features of the BSC is that it actually provides a guide that the finance management team’s evaluator could make use of when conducting the process of evaluating the company’s financial processes. With this guide as basis in ensuring the effective performance of the team regarding managerial duties, there would be more room for your company to garner more savings.
If you are not too sure what metrics and KPIs to include in your finance scorecard, then go online and search for some guides that can help you. Do not copy all metrics used by other companies, not even if you belong in the same industry. You have to choose just the ones that are relevant to your enterprise. When it comes to KPIs and metrics, you should know that less is actually more so just choose a relevant few to begin with.
Source by Sam Miller