Here's how you can assess the success of a financial manager using key performance indicators.

There are many ways to determine the financial success of a manager. One of them is analyzing the financial performance of the company or a specific business unit under a particular manager. Setting targets for metrics like revenue growth, profit margins, and return on equity will provide an objective view of their performance. It's important to interpret these metrics in context and not only whether or not the target was reached but also the general trend of these KPIs. This will tell you if your organization is improving relative to the baseline that existed before the manager was onboarded.

To assess the success of a financial manager, evaluate key performance indicators (KPIs) such as return on investment (ROI), net profit margin, and cost management efficiency. Ensure the accuracy and timeliness of financial reporting to support compliance and strategic decision-making. Examine the manager's ability to maintain healthy cash flow, liquidity ratios, and the debt-to-equity ratio to optimize the capital structure. Additionally, assess the effectiveness in managing working capital and maintaining customer and stakeholder satisfaction, reflecting the financial manager's overall impact on the company’s performance and growth.

In my experience, a common sign of a business going well is their ROA compared with the WACC, or at a more deeper level, ROE (as Free Cash Flow to Shareholders/Equity) compared with the Cost of Equity. Why? Because it leads you to know if the value generated by the business is the one expected by the owners and/or creditors.

Durante mi tiempo en Flow Investing Capital, lideré un proyecto de inversión en una startup tecnológica. Implementamos una serie de métricas para medir el ROI trimestralmente. Gracias a una evaluación constante y ajustes estratégicos, logramos un ROI del 15% en el primer año, superando nuestras expectativas iniciales.

En mi experiencia como Controller Financiero, desarrollé un sistema de seguimiento presupuestario que nos permitió identificar desviaciones a tiempo y tomar medidas correctivas. Esta herramienta fue esencial durante un período de recesión económica, permitiéndonos mantener un control riguroso sobre nuestros gastos y cumplir con los objetivos financieros anuales.

Cashflow management is the lifeblood of any successful business. Your financial manager should have a strong grasp on managing operational cashflows from the business and ensuring the company has strong liquidity positions and overall financial stability.

Como Controller Financiero, implementé un sistema avanzado de previsión de tesorería que nos permitió monitorear diariamente nuestras entradas y salidas de efectivo. Este sistema fue crucial para mantener la liquidez durante proyectos de construcción de larga duración y asegurar el pago puntual a proveedores y empleados.

A good financial manager should be able to identify incoming financial risks and develop a strategy to mitigate them. This could involve ensuring that the company adheres to all relevant financial laws and accounting standards or making sure the business maintains regulatory compliance within its industry.

En Vivo Chile, desarrollé un marco de gestión de riesgos que incluía la evaluación periódica de riesgos financieros y la implementación de estrategias de cobertura. Este enfoque proactivo nos permitió minimizar las pérdidas durante una crisis del mercado y mantener la estabilidad financiera de la empresa.

Durante mi tiempo en Flow Investing Capital, reestructuramos nuestras deudas a corto plazo para obtener mejores condiciones de pago con proveedores clave. Esto incluyó la negociación de plazos más largos y tasas de interés más bajas, lo que resultó en una mejora significativa de nuestra estructura de capital y una reducción del costo financiero.

1- The finance manager is the decision maker in the company. So the timely and accuracy of the reporting package is one of a very important KPI to evaluate the finance manager's performance. 2- When the finance manager is on vacation we should test the smoothly of the workflow. 3- The Quality of communication with the Cross functional team and the other parties.