Are you a great business partner?

April 6, 2017 5 mins read
Are you a great business partner?

The Traditional Image of a Finance Staff: High Threshold, Ugly Face, Hard Work

In many companies, the finance department is isolated from other departments due to the sensitivity of data information. In others’ eyes, finance staff are accountants who sit in an isolated room equipped with anti-theft alarms, staring at the computer all day long with dry eyes.

No matter in what kind of company, finance staff are busy preparing various statements, analyzing all kinds of data, dealing with various inspections and endless qualification examinations (CPA, ACCA, CMA, CTA, CIA) every day. When it comes to the monthly balance or budget, they have to start work early and go home late, under pressure to meet the deadline.

Other departments comment that finance staff work by principles, can help the company save money and their career is professional. In other words, finance staff are inflexible, rigid and stiff, always impede business development; the finance department is a supporting department; it creates no profits, can only save money.

This is not true. Let me share several stories to justify my statement.

  • The CFO Who Saved a Company

2010-2012 was a golden period when large consumer brands entered the Chinese market. No one doubted the purchasing power of the Chinese consumer. Brands that were not experienced or confident in channel control usually chose to establish joint ventures with existing distributors. Under these circumstances, business operation is mostly controlled by the distributor. However, the brand owner should never delegate its financial power. Company A is a typical case. It established a joint venture with a distributor. At the beginning, only the CFO was assigned by Company A. Its brand has certain international popularity. In Europe, its sales always grew steadily. After operating in China for 1-2 years, its financial statements were unacceptable all the time. The company suffered heavy losses. The CFO was a financial elite experienced in audit. According to some clues in the data and by observing the partner while discussing business, the CFO discovered the partner was transferring profits to another company and putting money in his own pocket. The partner tried to draw the CFO to his side and find mutual interests, but failed. The CFO began to fight with the partner by filing lawsuits, sealing the inventory, grabbing financial information and official seals. During this period, the CFO’s family members even were threatened by a criminal syndicate and had to move to another place. To protect the company’s interests, the CFO stood unimaginable work and mental pressure. In the end, the partner was successfully kicked out. The brand made up the deficits and got surpluses within 2-3 years.

  • The CFO Who Was Entrusted with a Mission at a Critical and Difficult Moment for Brand Upgrading

This company is a private foreign-funded durable consumer goods company. Before CFO Z came, it changed several CEOs, each in office for less than a year. CFO Z just returned to China and joined the company.  He was entrusted to assist the new CEO (an expat) to turn their luck in China for the company. By learning the business’ pain spots, CFO Z bravely put forward many proposals.

Renaming the Company and moving Headquarters;  the company was headquartered in a 3rd-tier city in China, and its former name couldn’t make Company B stand out as a high-end, high-grade foreign-funded consumer goods brand. CFO Z bravely put forward the proposal to change the company’s name and move its headquarters to downtown Shanghai. First, the location could make negotiations with distributors more convenient; second, the high-grade office decoration could give distributors some confidence in their cooperation. When the company was short of working capital, CFO Z rolled up his sleeves with the sales team to negotiate with distributors and got the biggest order in history in the end.

Changing the Production Mode: the company’s factory adopted high-end durable expensive molds before, but the cost was very high. If a newly developed product couldn’t sell well, the mold cost allocation would be terrible, and it would be impossible to make profits. In addition, the factory had information leakage. New products were soon copied by small workshops using cheap molds. The company’s market shares were lost soon. CFO Z proposed to use low-cost molds for sample R&D, and outsource mass production to other factories. Products that could sell well were taken back and produced by the company’s own factory using high-end molds. In this way, it saved costs, reduced risks and increased flexibility.

When CFO Z left the company, its sales tripled. The company finally broke even in four years.

  • It’s Not a Bad Thing to Have a Stingy CFO

CFO S came from the manufacturing industry. He was used to the factory operation pattern and attached much importance to cost control. By coincidence, he entered a high-end consumer goods company. At the beginning, he was unaccustomed to the company’s way of spending money, such as the office operation cost, some extravagant employee benefits. The most horrible were the company’s annual product promotion and marketing expenses. At the beginning, CFO S tried to take some measures to control the expenses, but all departments opposed. Because everyone was a benefit gainer; no one wanted to cut down his own cheese. Moreover, the deep-rooted idea was only spending money generously could maintain the company’s high-end brand image. But CFO S disagreed. By communicating with the Sales Department, he tried to start from controlling the biggest market promotion expenses. He suggested the Marketing Department should try some new marketing methods, particularly digital marketing, build some data tracking systems to collect marketing and sales feedback, strictly examine every expense, give up some low-ROI promotion measures. After a year’s hard work, the company not only saved 30% marketing expenses, but also made its brand promotion comply with the digital marketing trend. The Chief Marketing Officer also was commended by the company.

From the above cases we can see, as real business partners, finance staff totally can integrate with sales, go deep into sales, support sales and provide valuable services, be recognized by sales and help sales progress and make an impact on a company’s performance.

Tracy Luo's picture
Tracy Luo
Associate Director | Finance & Strategy Recruitment