Business & Management Finance

Operations Finance -working better together


In too many cases in my career I have entered into assignments where the operational team exist in an “operational silo”. The belief that a team of people with only one focus is best suited to running the operational performance of a business is narrow minded; the team, as discussed elsewhere in the blog, need to have a broad and deep pool of skills, experience and opinion to function at the most effective level. Here I postulate how best to engage the skill sets and knowledge of the finance department for operational purposes.

Selecting the right person

It could be that your operational team is already augmented by a member of the finance team, if not it would serve you well to find that person. It doesn’t need to be the most senior finance person in the department but someone who has an analytical mind and a keen willingness to question the operational performance of the business. Whoever you choose, ensure that they become a member of your lead team.

Disclaimer – not all finance people look like this

The starting point

When starting a new post, take sufficient time to understand the financial mechanics of your area of responsibility in relation to your operational objectives; focus your team on these factors. From team leaders to the most senior people in the organisation, everyone has objectives that have a financial element.

By creating an operational team inclusive of finance personnel, you can begin to understand the

narrative of the month’s performance. Reviewing a detailed Profit & Loss (P&L), with finance input, will give you the bigger picture; costs will move upstream and downstream through the business, month to month. If you are able to understand the financial narrative of the operations you can prepare and plan. Ultimately, you and your operational teams need to know the financial implications of their actions, by analysing the P&L your team can carry out their tasks with financial prudence and discipline.

Many smaller businesses may not have complex software, such as MIS (Management Information System) or ERP (Enterprise Resource Planning), yet every business creates financial data; it’s there, it’s available and can be used to help manage the operations of your business. Here the finance person can be of greatest help; they use the data continuously and can accurately sift through the superfluous (for you) to provide you with the information you require in order to communicate objectives to your teams. I would advise to keep the request for data simple, too much data can obfuscate the process. Clean, simple numbers that can be reviewed regularly is the order of the day.

Working with legacy numbers

When reviewing a legacy budget, focus on the financial Key Performance Indicators (KPIs) that have had the greatest impact upon each area of the business, both externally and internally (external costs such as transport or raw materials, internal costs such as payroll across all departments). The business objectives that you have been tasked with may well have changed since the legacy budget was created, so determine whether or not it aligns to current thinking. If not, use the time you have to change the focus of reviews. Again, finance input will be invaluable in determining the most relevant data for your objectives. 


There is an oft quoted adage in business; “fail to plan, plan to fail” and this is more true of financial planning than with most other disciplines in business; get it wrong here and you will experience unnecessary pressure every month.

Help yourself by involving your whole team. The mechanics of teamwork should ensure that the individuals will take responsibility, ownership and accountability when they are involved in the creation of the budget.

There are many schools of thought when it comes to the budgeting process but I prefer inclusion. From top line sales revenue to department costs and all other financial assumptions, involvement of the key people is essential for a successful budgeting process.

For example, in one assignment I organised a two day, off-site budgeting workshop. This helped enormously as, by the end of that financial year the business had not only achieved the budgeted financial numbers but had exceeded them. Obviously, the time invested in the process needs to be appropriate to the amount of time available but inclusion and attention to detail in the numbers will give positive results.

There is another, vitally important, benefit of this process and that is education. Few of the individuals involved in my example had ever had exposure to, or experience of, financial planning or budgeting of any kind prior to this; the meeting provided a huge motivational boost and an important link in the building of the team.

Also, as an incidental benefit, this can result in a positive impact in your relationship with your sales team. If they are aware of your detailed understanding of the financials, then they will trust your judgement on client negotiations regarding critical pricing.


Once the budget is agreed and set in place the business should have month end reviews, with at least the top two tiers of management participating (in my last assignment, the top 3 tiers were involved in the review with the corporate finance team and we always included the site finance team). If you are having to review the P&L with an external panel, then ensure that you have a prior review with your internal ops and finance team, to ensure there are no surprises; although a high functioning business will know most of the answers beforehand.

© Andy Collinsson May 2020

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