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Executive Finance and Strategy

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Executive Finance and Strategy

How to Understand and Use Financial Information to Set Strategic Goals

Kogan Page,

15 min read
10 take-aways
Audio & text

What's inside?

Understanding financial statements is the key to business success now and in the future.

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Editorial Rating

7

Qualities

  • Applicable

Recommendation

Financial strategy is a critical part of running any business. Nonfinancial managers, board members and executives must understand how this strategy improves their overall operations. Auditor and consultant Ralph Tiffin’s manual – complete with tables, case studies, accounting examples and definitions – addresses UK accounting rules more than US accounting standards, but is useful in either market. He offers solid strategic information that enables managers to see the impact of their firm’s strategy, behavior and ethics as reflected in its financial documents. Tiffin’s measured style can be dry and sometimes heavy going, but getAbstract recommends his basic compilation to nonfinancial managers and executives seeking full access to the valuable information inside corporate financial reports.

Summary

Strategic Accounting

Companies use accounting to plan, implement and monitor their business strategies. Modeling and financial reporting are tools for developing policies and pursuing profits. Accurate bookkeeping and accounting provide a verifiable way for executives to ascertain the assets under their company’s management and to make sure that they fulfill their responsibility to investors. The company’s accountants and the finance director are responsible for ensuring precise records, safeguarding assets and limiting liabilities. They report financial results to senior executives and the board. Top management is responsible for understanding the information and executing the firm’s strategy.

A financial strategy is a plan to use assets and liabilities to achieve corporate goals. A sound strategy has a quantitative aspect. Accountants provide data to show managers changes in costs, income, profits, net assets and cash flows – all of which indicate a strategy’s direction and status. A company can manage its strategy with an operational approach or a structural approach. An “operational financial strategy” uses models and measures to plan and report data about fiscal...

About the Author

Ralph Tiffin is principal of McLachlan + Tiffin, an auditing firm, and director of Tiffins.com, a training and consulting company.

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