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Strategic finance : The future of your business relies on improving your finance function

3 people having a meeting about financials and analyzing financial charts

Strategic finance: The future of your business relies on improving your finance function

There's no doubt that financial strategy is essential. A finance strategy ensures that an organization has enough money to meet its current and future needs. The more effective your company's financial management is, the more ROI you can generate.

Strategic finance is the process of allocating financial resources in a way that will help an organization achieve its long-term goals. It's a combination of financial planning and management, essential for businesses of all sizes. The goal of strategic finance is to create value for the organization. This means looking at the big picture and making decisions that will positively impact the business.

A finance strategy ensures that an organization has enough money to meet its current and future needs. The more effective your company's financial management is, the more you can generate and use your revenue.

Understanding strategic finance concepts enable you to make informed decisions to help your business grow and succeed. So, we put this article together to teach you about strategic finance functions. In short, it's the process of managing your company's money in ways that help you reach your long-term goals. 

What is strategic finance?

Strategic finance is the branch of finance that helps organizations make long-term decisions to maximize their financial performance. It encompasses a range of activities, from planning and forecasting to risk management and financial analysis.

One key aspect of strategic finance is that finance teams must ensure that all departments in an organization work together to achieve a company's financial goals. That involves analyzing the expenses and revenue of each department and using that insight to maximize revenue and growth opportunities.

Strategic finance helps companies assess their competitive environment, identify new opportunities, and develop marketing strategies. By creating a comprehensive understanding of an organization's business, stakeholders, and industry dynamics, strategic finance can help firms achieve their objectives over long-term goals.

What are the roles of strategic finance?

The role of strategic financial management is to advise and counsels a company's management on financial matters that are important for the long-term gains and success of the organization.

It can include suggestions about how to grow the business, cut costs, and make more money. In addition, strategic finance professionals may assist in creating or evaluating financial plans and strategies.

The strategic financial management function is responsible for the formulation and execution of long-term financial plans, objectives, and strategies to finance professionals' help in growing companies. 

In addition, strategic finance helps identify opportunities and risks associated with business strategy, evaluates potential investment candidates, and makes recommendations regarding financing options. The strategic finance function can also provide expertise in mergers and acquisitions, refinancing, and debt issuance.

Why is strategic finance important?

Strategic finance is an essential tool that companies use to make financial decisions. It helps companies set financial goals and decide how to use their resources. Strategic finance can be used to make investment decisions, allocate resources, and plan for the future. In addition to helping organizations plan for the future, strategic financial management also assists in making decisions concerning day-to-day operations.

Strategic planning is crucial for ensuring businesses remain successful in the long term. By understanding an organization's overall financial, real-time data and making sound decisions based on that information, companies can improve their chances of achieving their goals while remaining financially stable.

How to develop a strategic finance plan?

When it comes to business, you need a strategic plan. Whether starting a new marketing or looking to scale up your existing one, well-thought-out financial strategic management is essential. 

Here, we'll talk about the steps you need to take to make a strategic plan for managing money. From laying out your financial goals to estimating your costs and more, we will equip you with all the tools you need to make sound decisions when it comes to finances. 

  1. Figure out your business goals. 

Your goal could be to make more money, grow the business, or get more people to invest in it. Once you and your business partner have decided on your business goals, it's time to figure out how to reach them. Here are some tips on how to develop a strategic finance strategy:

That means setting goals, dates, and income statements for achieving each goal and outlining specific actions you will take along the way.

  1. Assess current financial conditions.

You need to know where you stand financially before setting ambitious targets or taking any actionable steps forward as a finance team. 

That includes a focus and analyzing your company's total assets and liabilities, operating cash flow, and debt levels with financial modeling. In addition, it's essential to identify any potential risk factors – for example, increasing challenges or geopolitical instability – that could affect your business model in the future.

  1. Develop an action plan for reaching your business goals.

Now that you know what needs to happen and when it needs to get done, it's time to create a long-term action plan to detail precisely how you will achieve each milestone. That includes accounting for who will be responsible for each necessary step in corporate development and when to complete it.

  1. Implement strategy

Informing employees of the changes made to company procedures and setting goals is essential for them to understand and follow your plan.

Also, communicating with your employees will help ensure they are aware of any changes or updates to the balance sheet.

Once the financial plan has been created, it is time to implement it. This step requires close coordination between the finance team and other departments within the organization. Additionally, regular monitoring is necessary to ensure the plan remains on track.

Developing a strategic finance strategy is an important step for any organization. By taking the time to carefully review the company's financial situation and set specific goals, the finance team can help ensure that the company is well-positioned for success in the future.

 When developing a financial function strategic plan, all workers must keep the board in mind. Informing employees of the changes made to company procedures and setting goals is essential for them to understand and follow your plan.

Also, communicating with your employees will help ensure they are aware of any changes or updates to the balance sheet.

Regular communication will allow any concerns or questions to get addressed as soon as possible, preventing potential problems from arising.

Conclusion

Strategic finance is a rapidly evolving field that touches on several different topics. It is the study of recognizing and utilizing profit in the financial market. It involves understanding both the short-term and long-term dynamics of the market and developing effective strategies to take advantage of those dynamics. 

Strategic finance is a critical part of any company's financial planning. Without it, companies would be disadvantaged when deciding how to use their resources.

Get a grip on your finances and accelerate your growth with gini

Founders and their finance teams may not have the time to create accurate financial statements, analyze their company's financial performance, nor have the resources to hire someone else.

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Cash Flow Forecasting Xero
Ray Wyand, CEO of gini
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