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- Author: Matthew Needham FCPA, FCMA, MCIPS
- Posted: January 22, 2025
Why Finance Doesn’t Influence… and What to Do About It
Finance is uniquely positioned to add significant value to any organisation. It can see what’s happening across the organisation and connect the dots that others may overlook.
By providing powerful insights, Finance can enable better decisions.
Without insights, your organisation risks becoming or staying stuck, missing opportunities, making poor decisions, or allocating resources inefficiently.
But too often, Finance is relegated to the ‘back room’, ignored, misunderstood, and seen as irrelevant.
Why?
It’s not because of a lack of effort. Finance is consistently one of the hardest-working functions in any organisation.
Or because they are bad at accounting
It’s because they are stuck.
Why Finance Are Stuck
The potential for Finance is immense. They are involved in all the numbers, touch every department, and hold the pen to tell the story of the organisation’s data.
But therein lies the problem.
1. Stuck in Operational Tasks
Most finance teams spend their days buried in operational tasks – reconciling accounts, closing month-end, responding to 101 ‘urgent’ queries from across the business, or fielding supplier questions about unpaid invoices.
Finance teams are busy.
Frequently under-resourced, carrying unfinished workload through to the next day.
There is only so much time in the day.
With the limited discretionary time available, Finance teams often spend it in reactive mode.
However, spending so much discretionary time on transactional tasks leaves little room for strategic thinking.
For leaders outside of Finance, many of their interactions with Finance are often compliance-based – approvals sought, delegations, and budget completion.
Consequently, their finance experience is transactional, thus reinforcing their opinions that Finance is stuck in operational work.
If the Finance team is too busy responding to ‘urgent’ requests or transactional work, when a genuine query that Finance can add value to arises, there is insufficient time or capacity to deal with it. Thus, Finance can’t support the request, further reinforcing leaders’ view that Finance is transactional.
The solution?
Let go of the small stuff and focus on activities that create capacity (such as reducing month-end times) for doing work that matters.
2. Do Finance Understand The Business?
Understanding the business is crucial for Finance to be influential. While Finance may know the P&L and budget figures to the last decimal point, it’s equally important to understand the driving forces behind these numbers. This will make them feel more connected and integral to the organisation.
Quite often, the answer to that question is no.
They don’t spend time on the shop floor, the front line, in the warehouse or with the sales team on a tough customer call.
They don’t ask enough “why” questions.
Without a deep understanding of the organisation, the insights are meaningless or low-level.
The numbers might be accurate, but they don’t tell the whole story.
Suppose a leader’s interactions are generally transactional with Finance. In that case, they will likely see any management report as transactional, too – so unless you provide valuable insights, you will further reinforce the image that Finance doesn’t understand the business and is transactional.
To become more influential, you must step out from behind the screen, get out into the business, and spend time with key functions (not the leaders but the people who do the work).
You can do this by job shadowing, attending operations meetings, or joining customer calls.
The key to improving influence is understanding the numbers behind the spreadsheet.
3. They Lack the right leadership skills
Just because you’re good with numbers doesn’t mean you’re a great leader.
Many finance leaders rise through the ranks on the strength of their technical expertise—crushing their CPA exams and mastering IFRS.
But leading?
Influencing?
Inspiring?
That’s a different skill set.
And if you don’t understand your organisation’s value drivers, how do you expect your people to do so?
Technical expertise alone is not enough to influence and advise senior leaders.
In the past, senior leaders have rarely approached me with a technical accounting issue but frequently with business problems they need help addressing.
Great finance leaders don’t just close the books; they show their team how to turn data into a story, connect the dots, and inspire action.
Finance must invest in so-called “soft” skills to become more influential, but there’s nothing easy about them.
Most organisational leaders don’t have a finance background. Given that most of their relationships are transactional, leaders may not understand how best to use Finance and, therefore, are more likely to ask transactional questions, further reinforcing that Finance is transactional.
So, educating leaders through insights should become a long-term objective.
The Consequences of Being Stuck
When Finance is stuck, it can’t influence the organisation and the organisation stumbles.
Decisions are made in the dark, without complete information, resources are wasted on the wrong things, and opportunities slip through the cracks.
But the real irony here is that Finance knows better.
They see the data, they see the patterns, and they have a good idea of what’s coming next.
But they are stuck watching the disaster unfold in the background, too busy reconciling last month’s numbers to form an opinion on next year’s strategy.
What Finance Needs To Do
When I meet a new finance team, one of the first questions I ask is how long it takes to issue the monthly report. In my experience, in most organisations, it takes 10-15 days for the report to reach senior leaders or the board.
That’s too long if you want to be more influential because the more time you spend on business as usual, the less time you have to influence.
Think of each day as 5% of available time in the month.
Every day, you can reduce month-end by increasing capacity by 5%, giving you an extra 12 days a year!
As you might have already worked out, the issues I’ve described aren’t three discrete issues; they are interconnected, but fundamentally, they all require capacity so that Finance can:
1. Get out of the weeds
While operational work is essential, it cannot define Finance’s role if the goal is to increase influence and impact.
You need to automate by investing in tools or streamlining your business processes, delegate or up-skill more junior team members to increase their capability or stop doing it so that you can free up the time for what matters.
2. Get into the business
Learn to understand the business and value chain and the impact sales, operations, and marketing have on results.
I suggest hosting quarterly Finance and Operations reviews or spending a week in each area to learn more about what drives the numbers, not just what the numbers are.
The key to learning is to ask better questions to understand the business model more effectively.
3. Get in shape
Master the art of storytelling. Transform data into actionable insights that align with business priorities and inform better decisions.
This includes having the skillsets to undertake the analysis that produces the insights.
With the right changes, Finance can significantly increase its strategic influence in any organisation. But sometimes, it takes a fresh perspective to unlock what’s possible.
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About Matthew Needham
Matthew Needham, an accountant and former CFO, consults and speaks on improving organisational performance. He helps leaders without a finance background confidently engage in financial discussions, enabling better decisions that drive improved performance.
For more information, visit > matthewneedham.co