The importance of financial control should not be underestimated. These processes and systems that are put in place to help steer an organisation towards set goals and objectives are crucial to its ongoing growth. Everything, from due diligence to corporate governance and fiduciary duty can be affected by the level of financial control within the business. When it comes to ensuring that this is adequate there are financial systems that can provide a lot of support.
Why financial control is so important
An early warning system
When financial control is strong and healthy it enables issues to be identified before they have the opportunity to escalate into something more serious. This allows time for preventative steps to be taken so that situations don’t become irreparable.
Without financial control it’s not possible to get a true perspective of the business, as a whole and also from the point of view of individual teams and departments.
Better financial management
Financial control enables more effective management at all levels, from investment through to strategy.
How financial systems can benefit financial control
Working with the right financial system can improve financial control in a number of key areas.
Strategy and planning
Strong financial control feeds into positive strategy and planning, enabling goals to be evaluated against projected and actual performance and ensuring that strategy is realistic and well informed. The right financial systems can also help financial control to be a tool for avoiding unpleasant surprises at the end of each financial year.
Investment and resources
Financial control is crucial when it comes to investment and resources, not just from the perspective of informing choices and evaluating polices but also when it comes to ongoing management. Particularly in a sizeable business, the use of financial systems is often the only way that this can be done effectively.
Generating revenue and reducing costs
Financial control is essential for streamlining costs and also improving income – it’s impossible to balance these two key components without it. Financial systems can help to enable financial control that influences these two elements in a range of different ways, from facilitating better cost structuring and establishing effective cost reduction measures, to identifying whether marketing strategies are having the desired outcomes.
Financial control is crucial when it comes to operational management – without it the momentum of the business can easily begin to move in the wrong direction and resources may start being wasted. Working with the right financial tools provides essential control with respect to recording and evaluating the operations and transactions that are essential to the day-to-day running of the organisation.
Working with carefully chosen financial systems helps to enhance financial control within any business. It’s this that enables an organisation to avoid issues such as overspending or compliance failures and to help maximise opportunities for increasing income and driving growth. Where financial control is not yet a priority, choosing the right financial systems could help make this so – and yield impressive results.