Managing more than one unit makes the task more complex. In this case, it is necessary to have an even broader view of finance management, with solutions, resources and tools that help in the activities of the sector.
To learn more about it, continue reading. In this post, you will learn 6 tips that will help in the success of the financial management of branches!
What are branches and how do they work?
Branches are units of a company that follow the same purpose, identity, culture and guidelines as the parent company. Thus, they aim at the growth of the organization, reaching new audiences, regions or market demand.
Unlike a franchise, the branch belongs to the same entrepreneur or business group. In addition, it differs from a subsidiary organization, which is wholly or partially controlled by the parent company, but may have different guidelines, brands and operations.
What is the importance of branch financial management?
Financial management allows for more accurate planning of expenses and investments, in addition to predicting possible financial problems. Thus, the company can anticipate and find solutions to avoid or, at least, minimize losses.
On the other hand, when it is not carried out properly, the business is exposed to the risk of going through several setbacks. Among them are the lack of profitability, indebtedness, stagnation in the market and even bankruptcy.
As far as branches are concerned, financial management is even more essential for success, as each unit tends to behave differently. For example, they may have a higher default rate, more seasonal sales, etc. Therefore, greater attention to cashier control is required.
6 Tips for Success in Financial Management of Affiliates
Now that you already know the importance of financial management of branches, it’s time to learn 6 tips that can help with this task. By putting these guidelines into practice, it will be possible to obtain good results in controlling the finances of the units.
1. Maintain a management standard
The first step to having a good financial management of branches is to have standards in the processes. While each unit may behave differently, the company must standardize administrative activities. This goes for using spreadsheets , generating reports, applying tools, etc.
In this way, everyone involved in managing the units and headquarters can understand the data and results. Consequently, the scope for confusion, errors and misinterpretations is reduced.
2. Improve communication between units
Although the units have their own operation, they must maintain communication with each other. After all, they are not competitors, but extensions of the same business. That way, when those involved in management understand what happens in each branch, they can act collaboratively.
With this, it is possible to increase the efficiency of financial administration. For example, the financial difficulty faced by a branch brings opportunities to develop preventive actions for the others.
In addition, the solutions found can be used in other units, streamlining problem resolution processes .
3. Have trusted and well-trained managers
As you have seen, communication between branches allows for even more efficient management. However, for this to happen it is necessary that the managers of the units are reliable and well trained. After all, the greater the number of branches, the smaller the reach of the headquarters’ management team.
Thus, it is necessary to delegate the activities to people who have skills similar to the main management of the company. It is also worth investing in training, not just technical training, but also for the development of behavioral skills that benefit the business.
4. Carry out the financial control of each unit
A choice that usually represents a mistake in financial management is to include control of the finances of all units, as if it were just one operation. This can be a problem because each branch gives different results.
While some are profitable, others may be at a loss. In this case, the poor performance of certain units reduces the profitability of others, impeding the company’s growth.
In addition, with single management, it is difficult to assess the performance of each branch in order to understand specific problems and propose solutions. Therefore, analyzing the results and maintaining individual financial control is essential for an efficient administration of finances.
5. Basing decisions on data
As experienced as management is, making decisions based on assumptions can result in poor choices that would be avoided by considering the data. This is because impressions do not always correspond to the truth.
For example, by looking only at the revenue obtained, a manager can understand that the unit generates profit. However, the expenses can suppress the profit margin, reducing the real profitability so that the operation is not viable. Thus, the company runs the risk of maintaining a unit that does not generate return due to a wrong impression.
On the other hand, the performance indices are objective and show the reality of the business. With this, managers can assess the viability of the branch’s operation, in addition to proposing solutions and actions that contribute to correcting bottlenecks and ensuring business growth.
6. Rely on technology
Technology is an ally in the day-to-day of a company, especially in financial management. With it, it is possible to automate bureaucratic activities, increasing productivity and reducing the chances of errors.