Stop counting the beans and start brewing the coffee

This is a guest blog by REC business partner, Vision33

Accountants have always recorded historical transactions so businesses understand where they are, where they've been, and how they got there. Finance employees have been called “bean counters” – and many feel that’s an accurate label.

But technology is changing finance’s role, and CFOs and controllers must stop being bean counters and start being baristas.

Modern CFOs must analyse data to determine how the business got where it is and how it can get where it wants to be. Where is the business most productive? Which revenue lines generate the most profit? Do all those business lines actually generate cash? If we expand a particular business line, will we run out of money?

Recruitment's unique financial challenge

No industry is more affected than staffing and recruitment.  A phrase I first heard from Neil Carberry at the REC is that recruitment is the only industry where the product can walk away from the sale. Agencies invest in winning contracts, finding candidates, and coaching them to an offer – and if they walk away, the frustration and loss of time and revenue are immense. And for staffing, we all know the impact temporary staff and consultants have on cash flow.

I can think of no other industry where you pay for products so far in advance of being paid by customers. Add the ever-changing world of government interference (e.g., the Employment Rights Bill and changes to National Insurance) and it’s a wonder recruitment firms succeed.

Turning data into better business decisions

Understanding productivity, revenue generation, and profitability fuels growth in a controlled, structured fashion. If you know which consultants and desks generate the best revenues and identify the profits from those desks, you can expand business in the right areas – if your projected cash flow will sustain the growth. But it's not just about individual consultants; it often comes down to identifying profit at the most granular level. Do you have figures for every placement, whether they’re permanent, temporary, or contract?

With the industry relying on two or more critical business systems (e.g., candidate and financial management, applicant tracking, and pay and bill), the need to connect these systems has never been more critical. Integrated systems deliver better data than manual processes, which lets you bill customers and pay staff faster and more efficiently. Integrated systems are key to unlocking efficiencies and delivering scalability.

CFOs’ jobs have changed fundamentally. Finance teams need the ability to slice and dice the numbers. With integrated systems and analysis of individual transactions, agencies can generate profit and loss reports by office, region, country, consultant, business line, or even placement.

This level of analysis is available to all but used by so few – and only agencies that can see the past clearly can look into the future with certainty and steer their own destiny.

If your systems don’t deliver this kind of analysis and efficiency, now is the time to wake up and smell the coffee – because if you don’t brew it, someone else will.

Learn more about Vision33