The discussion on turnaround management continues today with a discussion on weak finance function. As a business owner, it is your responsibility to have integrity and to hire people to work in finance who will hold the line. It’s not just about the numbers, it’s about recording financial data according to fundamental principles with correct intention.

A strong financial function will have a role that defends and explains to the organization why things should be reported in a certain way. The finance team helps management interpret the data so that any problems can be readily identified, and solutions can be found promptly.

A strong financial function will help the business avoid internal temptation to mask problems which only serve to set the business up for more problems later on. The data should accurately represent the economic performance of a company so the management team can make appropriate, informed decisions, and also provide consistency on how the financial data is reported.

Without consistency, your bank loses confidence in how your numbers are being reported. Maintaining transparency and open communication with your bank are critical to build and maintain trust in that relationship. If you report accurately and have a plan for recovery, then banks and lenders will work with you to a tremendous extent. If you are inconsistent in the way your financial reporting is done, you jeopardize that opportunity.

This information applies to all sizes of organizations. While it can be tempting to change the numbers around in financial data to paint a certain picture, it always ends in disaster and it does not solve the problem. Consequences can be serious. Have integrity with your financial data so you don’t allow yourself or anyone else to be fooled about where your business stands financially.