Measure, Manage, Succeed: Financial Ownership Tips
Listen here >
In business, what gets measured gets managed. If you want higher profits and better cash flow, start by assigning financial responsibility across your organization. Here’s how to do it.
The Macro Approach
1. Start with Your Financial Statements
Use your income statement and balance sheet to assign ownership to each line item. Each item should have one responsible person—no shared accountability.
2. Hold Monthly Financial Strategy Review (FSR) Meetings
Review results, identify variances, and take action. If labor costs rise, for example, the owner of that line item researches the cause and proposes solutions.
3. Iterate and Improve
Build, measure, and adjust strategies monthly to ensure steady progress.
The Nerdy (Granular) Approach
1. Get Your Chart of Accounts
Request a detailed list of all financial accounts from your accountant or bookkeeper.
2. Assign Owners to Sub-Accounts
Break down broader accounts into detailed sub-accounts (e.g., regional revenues) and assign an owner to each.
3. Leverage Granularity for Insights
Use detailed account ownership to identify trends and address issues more effectively.
4. Incorporate Insights into FSR Meetings
Use the detailed data in strategy sessions to pinpoint causes of variances and take targeted actions.
Why It Works
Accountability drives results. When people own their numbers and regularly review them, performance improves. Financial responsibility turns your statements into powerful tools for growth.
