Bill Schantz believes the execution of financial control is an essential function of a financial manager. Financial control involves the planning, coordination, and evaluation of a firm’s financial activities in accordance with the firm’s objectives. The financial manager uses tools and techniques linked to the assessment, management, and organization of financial transactions in the organization. Financial controls are necessary during both the business’ good and challenging times. Understanding the importance of financial control, especially during good times, is vital.
How Financial Controls Work Explains Bill Schantz
Bill Schantz asserts that controls needs to evolve just like the organization itself. Financial controls need to be aligned with your company’s hiring strategy, vision, and talent pool. Financial controls impact the company on a strategic level; they affect the company’s investment policies and business and operational policies.
Financial Controls at Strategic Level
Bill Schantz thinks there needs to be coherence between the financial plan and an organization’s strategic plan on a strategic level. This will enable the organization to achieve its set objectives. You will be able to avoid last minutes surprises at the end of the fiscal year, detect deviations in budgets and compensate for the shortcomings.
Financial Controls and Investment Policies
Investments are essential for a business’ growth and development. Implementing financial control in the investment chapter of the business can help evaluate policies related to investment decisions thoroughly. Financial controls can also help distinguish between immediate, short term and mid-to-long term assets. Such controls can also manage debt accompanying all such investments.
Financial Control and Business Operational Strategies
Bill Schantz assets that a company’s policies related to operational strategy and business concerns generating revenue and reducing costs. Financial control can assist these objectives through strategies like price-fixing, cost structuring, measures to reduce costs, and consistent marketing strategies.
Steps to Implement Financial Controls Lists Bill Schantz
- Financial controls help assess the company’s performance in terms of cash available, sales and profits earned.
- These controls can help detect anomalies in setting budgets, drawing balance sheets, and creating financial reports. These anomalies can prevent the company from meeting its goals.
- They also bring business operations back on track by correcting any deviations in the business’ financial accounts.
- Financial controls also examine an organization’s operation policies, such as production volume, profitability, and expenses.
- They also boost the decision-making process of the company. This is done by ensuring objectives such as profits and sales are duly met.
- Financial controls also help set goals and make forecasts in different scenarios such as planning production and investment.
Bill Schantz’s Concluding Thoughts
The above-listed information shows us the importance of financial controls in an organization. Bill Schantz firmly asserts that financial controls are necessary to effectively manage the company’s resources and operations. These controls set guidelines and rules that document, report and analyze business transactions. These steps enable the company to recognize its direction and ensure effective financial management, efficiency, and profitability. Without financial controls, the organization’s performance, budgeting, and operational proceeding can all suffer.