Essential to any financial strategy, no matter whether an enterprise is upscaling, downsizing, or trying to hold a line, is the differentiation of financial roles between strategy, management, and procedure. Most enterprises focus on the procedural: making sure there is adequate separation of roles and powers to reduce the risk of fraud or theft. While certainly an essential part of any organization's structure, this procedural role differentiation is only a small part of the whole. It is also, of course, commonplace to group procedural work by task: Accounts Receivable, Accounts Payable, General Ledger, Payroll, and so forth. This is because a certain degree of efficiency can develop from task repetition and focus, as Henry Ford demonstrated long ago. Modularizing tasks and separating powers is often a technical solution to snarled bookkeeping and accounting. So whether procedural roles sub-divide along tasks or certain powers (or, usually, both), this kind of role takes up most of the "best practices" manuals and accounting standards most enterprises focus on.
The management and strategy roles, then, tend to get less attention. Part of the reason for this is that they tend to operate outside the finance and accounting departments and non-financial-titled people often are responsible for them. Nevertheless, to maintain organizational excellence and implement creative, innovative approaches to challenges, steward leadership requires that strategy and management roles must have their due.
Strategy roles often reside in the executive-level staff and the governing board(s) and/or other accountability structures which work on behalf of the owner(s). Strategy begins with the overall financial model in which the enterprise operates. Questions of financial goals, where money generally comes from, where it gets expended, where profits go, what does long-term growth, sustainability, and viability look like - these are strategic questions. Specifically financially-titled executives support the chief executive's capacity to develop strategy within the owner(s') and governing body's parameters.
These strategic roles are supported by those in the management roles. Management roles provide the forecasting, planning, analysis, and reporting functions that support the overall enterprise. They also provide the day-to-day decision making within strategic parameters to advance toward longer-term goals. They work at the trend level, observing trends and intentionally working to create trends within their scope of responsibility. Some of these roles may have explicitly financial titles (like Financial Analyst, Office of Budget), but others may not.
One of the reasons that many enterprises end up focusing on procedure, even when they want to develop and manage strategy, is because the normal financial reports most accounting systems produce are quite procedural, and many organizations try to use the same, basic reports at all levels. In smaller enterprises, this happens easily since the roles are not very differentiated, and so people who work at a procedural level often are asked to report at the higher levels. And some executives and managers, fearing to reveal their own (perceived or real) lack of financial savvy, just go along with it.
Our free Financial Services Roles Tool groups these three types of roles - strategy, management, and procedure - from top to bottom. Using the tool, steward leaders can list out the different needs of their organization at the various levels, and define who is doing what role. It's usually best to start with the procedural roles and work up - procedural roles are easier to define, and the rest may take some thinking and working. Don't be surprised if there are gaps! Don't be surprised, either, if certain roles exist as outside contractors rather than within the organizational chart.