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Measure, Manage, Succeed: Financial Ownership Tips

finance leadership
Measure, Manage, Succeed: Financial Ownership Tips

 

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.

 

 

 

 

Your whole financial system, built in 30 days.

Coltivar provides CFO services for construction and specialty trade contractors. We build the system around how your business actually runs, then we run it every month and sit down with you on what the numbers are telling you. It works whether or not you already have a CFO.

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Financial performance
$14.2M
12.4% vs last year
Revenue by monthTrailing 12
JanJunDec
Gross margin24.7%
Net profit$1.86M
Cash on hand$1.28M
Updated every month
Steve Coughran
Steve Coughran
Founder, Coltivar · Host of Strategy Meets Finance

Steve started his first company out of his sister's garage at 16 and grew it past a million in revenue. He went on to earn his CPA, an MBA from Duke, and the CFO seat at a billion dollar construction company. Today he works with construction and specialty trade contractors doing $5M to $50M, finding where the money is going and building the system to keep more of it. Outside work he is a husband, a father, and a Brazilian jiu jitsu practitioner.

CPA MS, Accountancy MBA, Duke Fuqua Former CFO 6x author