What do you think is the fastest way to determine the health of your company’s finances? This financial management coaching article will help you identify the “canary” for businesses with 5-50 employees.
Although every business is distinctly unique, there is one activity that consistently demonstrates the overall health of an organisation. The quality of the Weekly Management Meeting is the Litmus test of your company’s financial stability, fortitude and sustainability. This single activity is the metaphorical equivalent of using the health of a canary to judge the safety of a coal mine. It accurately predicts the balance of your income, your overheads and your expenses.
Although you likely have an immediate, more general diagnosis of your canary’s health, here is a quick financial coaching self-check that can help you focus upon some specific areas of monetary weakness.
Self-check on the health of our Weekly Management Meeting canary:
- Is there is a consistent weekly meeting that starts on time, ends on time, and that everyone considers to be highly productive?
- Does everyone on the management team have transparency on your company’s financial position and obligations?
- Is there an effective scorecard for measuring how the company is performing in its key areas?
- Is cashflow effectively monitored with accurate forecasting as part of the meeting process, especially in less obvious areas, such as staff holiday hours and overheads, such as utilities and stationery?
- Is the majority of the meeting used for identifying and actually resolving the key factors in your company’s financial wellbeing – not just how much money you are making, but how this money is then being used or distributed?
- Is there a longer quarterly meeting used to refocus the team on the key income and expenses for the upcoming quarter?
If you can answer yes to all of these questions, your canary is in prime health. With every no, so your canary’s health deteriorates.
Why is the Weekly Management Meeting so indicative of a company’s financial health?
The meeting brings all the key pieces of the financial puzzle together and shines a spotlight on each of them every week, from payroll to income to staff expenses. When there is a shortcoming in your company’s accounting, it will come up through maintaining highly productive weekly meetings.
What are the key parts of any company’s weekly management processes?
- Ongoing team clarity regarding the company’s financial status, past, present and projected.
- The ability to monitor accurate company performance indicators week upon week.
- The discipline to identify the root cause of an issue, then solve that issue with a solution strategy that will be monitored week upon week until it is completely resolved.
- Efficient sharing of relevant company variables, ensuring the entire company stays aware and connected.
The lack of effective Weekly Management Meetings often leads to a subsequent lack of awareness of your company’s financial status, leading to over-spending, mismanagement of funds and even underselling your services or products. Many companies end up having some version of a Weekly Management Meeting but it often lacks clarity, effective problem-solving, or a high value for participants. Don’t ignore your canary.
When companies aren’t aware of the important role of a Weekly Management Meeting as the cornerstone of the company, it indicates a lack of understanding of this fundamental business strategy. More information on the topic should be obtained by reading a management consulting book (such as Traction by Gino Wickman) or by having a conversation with a knowledgeable business coach or management consultant.
What to do next?
If you’re feeling positive about your weekly management meeting quality and transparency, your next step is to celebrate! Your company is likely to be productive and functioning cost-effectively. Oddly, these are the companies with the most short-term opportunities for financial consulting. It is simply faster and easier to take an already healthy company and apply some small strategic improvements for sizeable profit.
If you are not feeling great about the quality of your Weekly Management Meetings, don’t despair. Begin by identifying your company’s most important areas for improvement. A great tool for aiding in this identification process is our Free Company Audit service that allows you to measure different aspects of your company’s people, process, and finances. You’ll receive an overall percentage rating along with the results for each of the questions so you can review them again later, either on your own or with your team. You can book a free Company Audit with Better Financial Control here.
We at Better Financial Control would also be happy to help you clarify your improvement options. If you’d like, we can review the results of your self-audit together. Just as we understand that the Weekly Management Meeting is your company’s canary, we also understand how to help you identify a practical path that can guide your company to being more on track and your canary – and your accounts – back to good health.
We hope this analogy between the canary and your Weekly Management Meetings has been interesting and created some value for you. Please don’t hesitate to reach out and ask us any questions you may have on your business management journey.