Finance Business Partnering: From Financial Control to Decision Support

Is Your Finance Function Holding You Back or Driving You Forward? Exploring Finance Business Partnering

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I. EDITORIAL: FINANCE IS NOT AN ISLAND

In too many organisations, Finance is seen as an ivory tower: producing complex reports, presenting indicators sometimes disconnected from operational reality, and often acting as the budget police. This disconnect between numbers and operations is a major source of inefficiency. At sea, if the navigator does not communicate with the crew on deck, the ship drifts off course. Finance business partnering puts the numbers back to work for progress.

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II. UNDERSTANDING WORKING CAPITAL REQUIREMENTS

For an operational manager, working capital requirements can seem abstract. Yet they are the ship's fuel.

• The cash cycle: every day saved on customer payments or inventory turnover releases money to invest in new equipment or people.
• The cost of inventory: this includes holding costs — warehousing, damage, insurance and obsolescence — as well as the value of the goods. Did you know that dormant inventory can cost up to 25% of its value each year?

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III. EXPLAINING EBITDA TO NON-FINANCE TEAMS

Why is it crucial for a construction manager or store manager to understand EBITDA? Because it is where their real performance is measured.

• Gross margin versus net margin: we help your teams understand how daily decisions — a discount given too easily, excess material consumption or poor staff scheduling — affect the bottom line.
• Operating leverage: how a small increase in activity can generate a much larger rise in profit when fixed costs are under control.

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IV. THE LA BOUSSOLE APPROACH: FINANCIAL CONTROL ON THE GROUND

Our approach helps the financial controller become a business partner.

1. Simpler reporting: fewer tables and more clear KPIs that mean something to teams, such as loss rate, hourly productivity or cost per pallet.
2. Performance routines: introduce monthly reviews where Finance and Operations build action plans together rather than assign blame.

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V. EXERCISE: CALCULATE YOUR CASH DRAIN

Identify your five best-selling products. Calculate the average time between purchasing the raw materials and receiving payment from the end customer. If it exceeds 90 days, you have a major opportunity to improve cash flow that La Boussole can help you capture.

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