What happens when finance stops looking backwards?
By Aran Purewal
Most leadership teams would agree that finance should help shape business decisions. The more interesting question is whether it actually can?
Because there’s a difference between a finance function that provides information and one that helps the business decide what to do with it.
The monthly accounts are produced. The variances are explained. The board pack is written…Then everyone moves on.
That’s valuable. But it’s retrospective.
The more strategically embedded finance functions are asking a different question: What do we need to know now to make a better decision about what happens next?
New to this article series?
In our first article, Aran explored why the expectations placed on finance teams have changed, and what we’re seeing in the South’s finance hiring market.
Read: The role that quietly became one of the most influential in finance.
The shift isn’t about reporting. It’s about influence.
Finance hasn’t stopped being responsible for accuracy, control and reporting. It’s about what happens alongside those responsibilities.
When a client tells us they’re looking for a finance leader who needs to be comfortable challenging the board, or sitting in on commercial reviews, that tells us something.
The business has already made the leap.
Finance isn’t being brought in to validate decisions, it’s being brought in to help make them.
In the strongest organisations, finance sits at the heart of strategy and decision-making across the business. That might mean challenging a growth assumption, modelling different scenarios before an investment is made, identifying a cash or cost risk early, helping the business understand the commercial consequences of a pricing decision. Or simply asking a question that nobody else in the room has thought to ask.
The value isn’t just in knowing the numbers. It’s in knowing what to do with them.
A simple test for your own finance function
If you want to understand how strategically embedded your finance function has become, start with the decisions rather than the reporting.
When an important commercial decision is being made:
- Is finance involved at the beginning, or only once the numbers need validating?
- Are forecasts driving action, or mainly reporting history?
- How quickly can finance model a new scenario when something changes unexpectedly?
- Does finance challenge commercial assumptions, and does anything actually change when it does?
- Can finance identify an opportunity or risk early enough for the business to act on it?
- Can someone in finance explain a complex number in one sentence that a non-finance stakeholder can understand and act on?
That last question is increasingly important.
Because strategic finance isn’t just about analysis. It’s about influence… and influence depends on communication.
If finance flags a risk but nobody changes course, the problem may not be the quality of the analysis. It may be the function’s ability to communicate it, challenge effectively and gain buy-in.
Technology creates the opportunity. It doesn’t create the capability.
There is a temptation to think that investing in a new finance system automatically moves the function forward. We see the opposite surprisingly often.
It’s also something candidates tell us when they’re explaining why they’re considering a move…A business has invested in a new system, the technology works, processes become more efficient, but the structure of the finance function hasn’t changed.
The expectations haven’t changed. And the finance team is still measured primarily on producing the numbers.
The technology did its job. The organisation didn’t necessarily do its part.
That’s an important distinction; automation can create capacity. It can’t, on its own, create commercial judgement, stakeholder influence or strategic thinking.
Those are capabilities that have to exist within the team and be given the opportunity to make an impact.
The capability gap
This is one of the clearest changes we’re seeing in senior finance recruitment. Technical competence remains non-negotiable.
But in many of the briefs we’re working on, stakeholder management and communication are now equally important, and sometimes appear before technical qualifications in the conversation.
Clients want someone who can hold their own with a Sales Director…
Someone who can challenge a CEO constructively…
Someone who can explain what the numbers mean without hiding behind finance terminology…
The candidates who stand out aren’t necessarily the most technically qualified, they’re often the ones who can take a complex number and explain it in one sentence that a non-finance stakeholder can understand and act on.
That translation skill may be one of the biggest differentiators in senior finance today.
So where does your finance function sit?
There isn’t one right model…
A fast-growing SME will need something different from an established international group.
A private equity-backed business will have different priorities from a founder-led organisation.
But the direction of travel is clear…Finance is being asked to play a more active role in the business. The question for leadership teams is whether their structure, capability and expectations have kept pace. If finance is still spending most of its time explaining what happened last month, ask yourself:
Does the team have enough capacity to help shape what happens next? And if it does have the capacity, does it have the capability and influence to use it?
Those are increasingly important questions for any business planning for growth.
If this has prompted a question about your finance function…
Across the South, we’re seeing businesses think differently about the role finance needs to play as they grow. If you’re reviewing your finance structure, considering a new senior hire, or simply want to compare what you’re seeing with the wider market, we’re always happy to share the perspective we’re seeing across finance leadership appointments.
Start a conversation with our finance team.