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Achieving Financial Excellence: Key Aspects and KPIs for a Finance Manager
Roger Knocker • Jan 31, 2024
Achieving Financial Excellence: Key Aspects and KPIs for a Finance Manager
Important Aspects of the Finance Manager Role
As organizations navigate the complex financial landscape, the role of a Finance Manager becomes pivotal in ensuring not just financial stability, but also fostering sustainable growth. Here, we delve into specific aspects that make this position critical, emphasizing the need for tailored Key Performance Indicators (KPIs) to measure success.
1. Profitability Monitoring:
- Objective: Ensuring the financial health and profitability of the business.
- Regular analysis of revenue streams, cost structures, and profit margins.
- Identification of underperforming aspects, such as customers, products, channels, and departments.
2. Transactional Processing and Reporting:
- Objective: Enhancing accuracy, speed, and efficiency in financial operations.
- Implementation of KPIs to measure the accuracy of transactional processing.
- Monitoring the speed of reporting, ensuring timely dissemination of financial information.
- Assessing efficiency in data processing to streamline financial reporting.
3. Billing and Collections:
- Objective: Efficiently managing billing processes and minimizing overdue payments.
- Implementing KPIs to track the effectiveness of billing systems.
- Monitoring collections to reduce overdue payments and improve cash flow.
4. Project and Initiative Management:
- Objective: Implementing change through projects and initiatives.
- Evaluating the success of projects based on adherence to budget, timeline, and scope.
- Monitoring the Finance Manager's role in driving effective change within the organization.
5. Customer Satisfaction and Departmental Functionality:
- Objective: Ensuring customer satisfaction and optimal departmental performance.
- Implementing KPIs to gauge customer satisfaction with financial processes.
- Monitoring the overall functionality of the finance department.
- Tracking progress in training and personal development plans for the finance team.
The Finance Manager's role extends beyond mere number-crunching; it involves
strategic decision-making, effective project management, and a keen focus on
customer satisfaction. Tailoring KPIs to these specific aspects ensures a holistic
evaluation of the Finance Manager's performance, contributing to the overall
success of the organization.
Here are some suggested Key Performance Indicators
- % Operating Profit to Shared Service Costs
- % Operating Profit Margin
- % Variance to Expense Budget (Finance Manager Dept.)
- % Internal Survey Score (Quality Questions) (Finance Manager Processes)
- % Internal Survey Score (Cost of Service Questions) (Finance Manager Dept.)
- % Internal Survey Score (Delivery Questions) (Finance Manager Processes)
- % Overhead Cost per Sales UOM
- % Working Capital to Sales
- $ Cost per General Ledger Entry
- # Debtors Days
- % Overhead Forecast Accuracy - 6 mth
- % Overhead Forecast Accuracy - 3 mth
- % Overhead Forecast Accuracy - 1 mth
- % Compliance with System Controls (Finance Manager Processes)
- % Adherence to Process (Finance Manager Processes)
- % Policies & Processes up to Date (Finance Manager Processes)
- % Processes Automated / Systemized (Finance Manager Processes)
- % Processes Published to staff (Finance Manager Processes)
- % Planning deadlines achieved (Finance Manager Dept.)
- % Projects on Time, Scope & Budget (Finance Manager Initiatives)
- % Projects within Budget (Finance Manager Initiatives)
- % Projects within Scope (Finance Manager Initiatives)
- % Project Milestones on Time (Finance Manager Initiatives)
- % Completed Projects with ROI (Finance Manager Initiatives)
- % Team Tasks completed by Deadline (Finance Manager Dept.)
- % Employee Satisfaction Score (Finance Manager Staff)
- % Personal Development Plans Completed
- % Key-Staff Retention (Finance Manager Staff)
- % Risks with Valid Mitigations (Finance Manager Dept.)
- % Staff Capability/Training Achieved (Finance Manager Staff)
- % Reportees KPIs Achieved (Finance Manager Staff)
- % Reportees Personal Development Plans Completed (Finance Manager Staff)
- % Reportees Personal Objectives Achieved (Finance Manager Staff)
- % Training Plan Adherence (Finance Manager Staff)
- % Skills Gap (Finance Manager Dept.)
- % Staff Turnover (Finance Manager Dept.)
- % Staff Turnover of Top Performing Staff (Finance Manager Staff)
- % Agreed Succession Plans Implemented (Finance Manager Dept.)
- % Compliance with King III (Finance Manager Dept.)
- % Strategic Risks Mitigated (Finance Manager Dept.)
- % KPIs Benchmarked (Finance Manager Dept.)
- % ISO Score (Finance Manager Processes)
- % Audit Findings Resolved by Deadline
- % Green Projects (Finance Manager Initiatives)
- % Variance to Expense Budget (Finance Manager Dept.)
- % Personal Tasks Overdue
- % Personal Capability/Training Achieved
- % Master Data Accuracy Overall
- % Automated Reporting from Accounting System
- % Master Data Quality (Finance Manager Systems)
- % Compliance to BOPs
- # Days to complete budget
- # Days to complete forecast
- # Days to complete Month End
- # BEE Rating (South Africa) (Finance Manager Dept.)
- $ Finance Department Cost per GL Entry
- % Affirmative Procurement Spend (South Africa) (Finance Manager Dept.)
- % Employment Equity (South Africa) (Finance Manager Dept.)
- % Previously Disadvantaged Individuals (South Africa) (Finance Manager Staff)
Feel free to sign up for the KPI spreadsheet to access these and additional KPIs in a structured format that offers better context.
Watch the video below to see what you will get and how to use the KPI spreadsheet to take the guesswork out of KPIs
9 Steps to Master Successful Strategy Execution with KPIs - This piece is a detailed step by step guide on how to master strategic execution. Unlock the secrets to successful strategy execution with KPIs. Learn 9 essential steps to master effective strategic execution and achieve your goals. through actionable objectives.
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