Challenges that a Finance Organization Run Into

In this episode we are joined by interim executive Bill Hegeman. He shared different challenges and signs of trouble to look out for in companies gleaned from his decades of experience in executive positions.

Bill gave us a little bit of background on how he became an interim executive in finance organizations:

I started at a Fortune 500 company, did all their back office accounting, taxes, cash management. And then became a controller of a billion-dollar division which really gave me access to a lot of different things. What I found is the controller position is I really like the operating side of the business, really understanding how customers buy, and how suppliers provide their products. And with that I decided to move to a smaller company as a CFO. From there I ended up as a general manager and eventually spinning it off and became President of a small contract manufacturing. That eventually ended and I moved into a CFO role in a little bit larger organization, but the organization was broken.

I took the actions to fix the organization and eventually ended up as president of that organization. After retiring to move to warmer climate, I was looking around for new opportunities and I found there is a need for people that understood businesses the way I did because of my diverse background, and therefore I became an interim executive for a number of different firms.

He also told us what common challenges organizations run into especially in the realm of finance organizations:

Well some of the things that I run into are fairly common, and the first one I run into is just the credibility issues that people don’t trust the finance organization. Things have gone on, usually for a period of time, where they miss deadline, they don’t communicate. When they do communicate, the information is either incomplete or its confusing, and then people start asking more and more questions, and they get more information that doesn’t quite make sense, and eventually they point just don’t trust the finance sector at all. And if you’re a bank, or you’re an auditor, that causes you a great deal of concern and it becomes very dysfunctional for the organization. Another problem I see a lot, and this is usually the tipping point where I get called in is they don’t have enough cash to run the business.

The last thing is really the lack of discipline within the finance organization can cause a lot of problems is that they don’t run a lot of businesses as a serious entity. A lot of times the company doesn’t value the finance function and so they don’t put enough resources in or enough skills in those resources to run a good finance department. And then the issues that come with that prop up in a number of different ways, but it’s just the lack of investing in the finance organization.

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