Cai Jia Education remembers very clearly that Ren mentioned more than once that a competent CFO should be ready to take over as CEO!
Today, the function of CFO has risen from financial management to enterprise value management. CFO can't be limited to traditional financial accounting and reporting, but must become a strategist who grasps strategy, objectives and business model, balances long-term interests and short-term interests, and becomes a business strategist.
This requires us to understand business logic from the perspective of business operators and find the key resources that restrict or promote business development! This requires us to stand on the overall situation, focus on various functional plates related to products, and consider how to cooperate with each other with business thinking!
So, what is the difference between financial thinking and business thinking? How does finance understand business? Next, finance and education will be broken down in detail!
Part.
0 1
? What's the difference between financial thinking and business thinking?
There have been two views on financial thinking and business thinking in the industry. Finance and education have been sorted out as follows:
A point of view
1, short-term financial thinking, long-term business thinking.
If you draw a picture, the horizontal axis is time and the vertical axis is cash flow, the development of any business or enterprise is S-shaped. At first, the cash flow is negative, the loss gradually decreases, then the profit and loss break even, and then the money begins to be made. ?
Some enterprises are "small S", some are "medium S" and some are "big S". For example, different species have different growth cycles. ?
The acme of "Big S" is Amazon, which has been losing money for 15 years, and the capital market still sticks to it, which is inseparable from Bezos' super ability, charm and persuasiveness. Many times, the capital market is not so tolerant and kind. Many listed companies have been kidnapped by the capital market in pursuit of short-term interests, and some even paid the price of their lives.
2. Maximize the total amount and efficiency.
Finance pursues the maximization of ratio (efficiency) and business pursues the maximization of total amount.
If an enterprise's activities are divided into two simple parts, one is manufacturing and the other is marketing, both of which are manufacturing and sales. Maximizing the efficiency of manufacturing is a good thing, but after maximizing the efficiency of marketing and sales, the company's total profit is not maximized when the efficiency indicators such as profit per thousand yuan and per capita profit of advertising investment are maximized, because all inputs follow the law of diminishing marginal utility, and the point of maximizing total profit must appear after the maximization of efficiency indicators.
3, decision-making related cost principle
Business thinking follows the relevant cost principle of decision-making. The so-called related cost means that this cost will change with your decision. On the contrary, the cost that does not change with the change of this decision has nothing to do with this decision.
Financial thinking considers irrelevant costs, such as sunk costs, and fixed costs that should not be shared.
Viewpoint 2
1, starting from the starting point
Business thinking focuses on actual combat, efficiency and effectiveness, while financial thinking focuses on risk, compliance and process;
2. From the way of thinking.
Business thinking is qualitative and belongs to Chinese thinking, while financial thinking is quantitative and belongs to mathematical thinking.
3. consider the cost.
Business thinking is generally a direct cost, while financial thinking includes related costs besides direct costs.
4. From the point of view of achievement
Business thinking pays attention to the process, while financial thinking pays attention to the result;
5. From the perspective of development
Business thinking focuses on the future development of the enterprise, while financial thinking focuses on the short term;
6. From the perspective of risk
Business thinking is siege thinking, focusing on market, scale and customers, while financial thinking is guarding city thinking, focusing on risk, profit and income.
7. Functionally
Business thinking is to plant beans (sowers), while financial thinking is to count beans (scales).
No matter from what point of view, the deviation and conflict between our finance and business are often caused by the different information and resources held by both parties.
Finance should handle business relations in accordance with standards and tax laws, and business should be modified according to actual conditions.
It is impossible for us to require every business department to be familiar with the standards and tax laws, so only when we have a better understanding of the business involved, the overall operation of the company, the characteristics of the whole industry and the positioning of the company can we find a suitable balance between the two.
Finance has prepared the following questions to test whether you have business-oriented financial thinking:
Question 1: where is the positioning of your business products? What are the specific business models and profit models?
Question 2: What is your company's customer base? Do you know all the former 10 customers and manage them effectively?
Question 3: Are you familiar with the top 10 suppliers in your company and have been communicating with them?
Question 4: Do you know the production technology, technological process and product formula of your company's products?
Question 5: Are you very clear about your company's sales performance scheme design, company structure, equity design, organizational system construction, personnel structure and salary design?
Question 6: Are you aware of your company's corporate culture, patented technology, trademarks and other intangible assets?
Question 7: Are you very clear about your company's future development goals, company strategic planning and the next business direction?
Question 8: What are your company's weaknesses or shortcomings? And what advantages does your company have in the same industry?
Question 9: Have you participated in and followed your company's external relations? Can external risks be predicted in time and effectively prevented?
Question 10: Do you integrate the company's finance, business, legal affairs and taxation? And integrate company information technology? So as to know how to look at your company from multiple angles!
Part.
02
? From what dimensions should finance understand business?
Huawei Finance put forward five requirements for financial personnel: understanding projects, contracts, products, accounting and performance. If financial personnel can achieve these five understandings, they can already become enterprise managers.
Understand the project: understand the different stages of the project, for example, the demand for manpower in different stages is different, and it cannot be a project with 10 people from beginning to end, and there is no addition or release of resources;
Understand the contract: for example, how the payment terms are agreed;
Understand the product: what is this product, what are its characteristics, and what is the order in the construction process;
Understand accounting: for example, how to confirm income at that time, how to combine enterprise management with financial management;
Understand the performance: projects are often temporary and will be withdrawn after completion. How to design the organizational performance of this project?
For how to integrate finance into the business, Huawei also put forward three directions. The analysis of finance and education is as follows:
Direction 1: Participate in project management.
The larger the scale of the enterprise, the finer the division of labor of financial personnel, and often they can only focus on the work for a short period of time, so it is difficult to spy out the whole picture of financial work. Grass-roots financial personnel want to master the whole accounting as soon as possible, the best choice is to do project finance. A project is equivalent to a complete cycle of a small enterprise, which is comprehensive and close to business. After this cycle, financial personnel can lay the foundation for changing to CFO.
Direction 2: Participate in business analysis.
Huawei advocates business analysis, not pure financial analysis. Financial analysis must be combined with reality and serve the business department, otherwise the analysis report will have limited effect.
Specifically, financial analysis should point out the problems, find out the countermeasures, implement the responsibilities and make due evaluation through the business reasons behind financial data mining. In this way, financial analysis naturally broke through the financial category and became a top project.
Direction 3: Participate in budget forecast.
Financial personnel must constantly communicate with business personnel and draw pragmatic conclusions. What is the relationship between planning and budget? Planning is dominant, and those who plan must understand the business. The regional department should set up a planning, budget and accounting department, so that people who know the business can take the lead. Only when the plan is made can the budget and accounting have a basis to revise and evaluate the plan. Plan is the direction, budget is the quantification, accounting is the inspection, and they promote each other. The key is that the planner should understand the business.
Financial support for enterprises is moving from backward to advanced, and forecasting can be an action. Accurate prediction helps the company to make correct decisions and optimize the company's resource allocation. At the end of the financial analysis report, it is often necessary to predict the annual operating indicators. Whether the forecast is accurate or not is also a yardstick to test the effect of financial analysis to some extent.
It should be noted that the working characteristics of enterprise financial personnel are very different from traditional financial work:
1) The main tools and technologies used in finance are basically the same as those used in traditional finance;
2) The goal is to achieve business goals, especially financial goals, without tampering with the business;
3) Assist in business decision-making, decision-making and management;
4) Go deep into business details, no longer take bookkeeping, statements and tax returns as the main work, and no longer take boss monitoring and other people's work as the main working methods, but promote scientific management and decision-making;
5) The communication and coordination is very large;
6) It can be said that it is half business and half finance.
To sum up, if finance is to move towards commerce, it must be achieved that you have me and I have you.
Good finance is to stay behind the scenes and hide in the invisible. You can't just bow down and be an accountant. You should bring financial thinking into your business. The combination of industry and finance, for financial departments and financial personnel, is already a time-consuming and irresistible trend.