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Assembling an Effective Financial Team

Sep 3, 2020

In today's environment, an effective financial team is vital to an organization's success and its ability to avoid failure. In many circumstances, margins are incredibly thin, so reliable financial information and analysis can differentiate between success and failure.

Contractors should ensure that at least one member of their financial team possesses a holistic understanding of a company's overall cost structure. In that regard, a financial manager can help other managers achieve their goals, while at the same time satisfying their direct responsibilities.

A financial manager's duties may vary from company to company, due in part to different managers have different skillsets and personalities. A manager with a background in operations (estimating and project management) might concentrate on the proper recording of job costs. In contrast, one with experience in public accounting might emphasize financial reporting and income tax planning. Both types of managers should possess strong technical skills to ensure efficient and thorough software use to achieve reporting goals.

Additionally, the skills and personalities of the other members of the team can influence a financial manager's responsibilities. For example, most of a company's administrative work can be performed in any department and be allocated based upon the skills and personalities of the respective managers. Most construction financial managers feel that cash management is their responsibility—meaning cash management responsibilities will typically be assigned to the finance department.

By being an active participant in the management team, a financial manager can easily contribute to other managers' financial needs to achieve objectives. This participation offers a wealth of benefits, including instances such as when the manager of the estimating department relies upon the accounting department to maintain accurate historical job cost records. The estimating department uses these records to prepare estimates of future jobs.

Size Matters

Since roles and responsibilities are more specialized in larger companies, the company's size also impacts the role of the financial manager. In small companies, duties are assigned to a smaller group of managers, and each manager must handle a broader range of responsibilities.

A small company's financial manager will typically be responsible for all administrative and financial tasks, while other managers will typically concentrate on marketing, estimating, and project management. Conversely, a large company's financial manager often has limited responsibility for administrative tasks involving contact with customers and subcontractors. The department with primary responsibility for customer and subcontractor relations will prefer to be the primary contact to minimize misunderstandings.

There is no one standard set of responsibilities, so each financial manager should be alert for areas of responsibility that are not clearly defined in the organization. Subsequently, they should take the initiative to ensure that all significant responsibilities are assigned.

When it comes to assembling the most effective financial team for your construction business, strategizing the delegations of roles and responsibilities is key. Reach out to a CRI advisor for more information on how to streamline this process.

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