A Month in the life of a Portfolio Finance Director

Keep it Simple, Report by Exception, Use KPIs

Keep it Simple.

Albert Einstein once said: “If you can’t explain it simply, you don’t understand it well enough”. I love this quote and I often feel that is very applicable to my role as a Portfolio Finance Director.

My clients frequently hire me because they don’t understand their numbers and don’t know how to get value from them. The first thing that my clients want from me on a regular basis is a simple view of how they are doing. How is trading, are they profitable, are they hitting target, do they have enough cash. I need to answer these questions and remember to keep it simple, that’s my role.

Report by Exception

I am an accountant I love lots of numbers and spreadsheets, I would happily analysis every caption in a profit and loss account and prepare a breakdown of it to the nearest penny. My clients are nowhere near as keen on reviewing all this data. I know today that most of them, at best skim the management accounts pack that I send them. So why prepare them, well I make sure they are accurate and fully reviewed so that they don’t have to. It is up to me to identify issues, to understand customer growth, to keep an eye on stock levels and overdue debtors to watch out for overspend. It is up to me to raise issues with them by exception so they can focus on what matters.

Use KPIs

Small businesses usually have small management teams, they are often heavily involved in the day-to-day operations of the business. Their time is precious. It is up to me to make sure that they understand the key business drivers, and how they are performing against them. I use KPIs to do this. This gives the management team focus and helps make the monthly board meetings more meaningful.

Conclusion

It is my role as a Portfolio Finance Director to Keep it Simple, Report by Exception and Use KPIs. Less really is more.