Finance function for SMEs

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Many start ups and early stage companies are focused on one thing, and one thing only – cash flow.

Of course, this is absolutely right in order to ensure that clients pay their bills on time in order to in turn pay suppliers so that lines of credit stay open, and the business can keep on trading.

The question then, I believe, is at what point in the evolution of a young business should it start to look at its finance function and grow the capacity beyond simple, yet important, book keeping?

Of course in a large multinational, it is expected that the Chief Financial Officer sits beside the Chief Executive and advises on a wide range of issues from investor relations to business strategy, but in a small company it is not always clear where the finance function, if one exists at all, sits within the organisation.

Often, this is due to a new enterprise being the embodiment of the vision, strategy and values of the founder, with not much room for additional opinion.

However, as a start-up becomes more mature, even if it is still medium sized, there is a real need to start evaluating the strategic role of the finance function within the organisation.

As this market continues to become more globalised, and domestic companies deal more regularly with international concerns, there are a number of issues that need to be taken into account. This not only includes foreign exchange fluctuations which can have a marked impact on the bottom line, but compliance with cross border legislation and regulations that not only govern accounting standards but best practices in accountability and transparency.

In fact, in a recent survey of UAE based CFOs, 96 per cent of respondents indicated that a strong grounding in business ethics was essential to their operation.

Article continued on next page

Related:
Topics
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Finance talk with RAKBANK

Finance talk with RAKBANK

StartUp sat down with RAKBANK’s head of personal banking, Ian...

Tips from the top: Hisham Al Gurg

Tips from the top: Hisham Al Gurg

High profile investor and entrepreneur Hisham Al Gurg discusses...

1
The hubsters' ecosystem

The hubsters' ecosystem

Tamara Pupic visits Impact Hub Dubai, the first local branch...

Most Discussed
  • 14
    Baby NOT on board?

    The people commenting here were all 20 years old when they were born, never cried, never screamed and never ran etc etc.
    more

    Thursday, 21 August 2014 8:30 AM - Amer
  • 7
    CEO of Just Falafel to step down

    Just Falafel was a disaster waiting to happen. The food isn't even that good and the focus wasn't on building the brand and operations. Instead they focused... more

    Thursday, 21 August 2014 8:37 PM - milad
  • 6
    Belgium diplomat arrested for pulling veil from Qatari princess

    If its illegal to dress in a certain way why didnt the police do something about it.

    Whereever the Europeans go, they demand that society conforms... more

    Thursday, 21 August 2014 8:37 PM - Ghazi