Assembling a robust financial analysis team forms the foundation for sound organizational decision-making. This group should encompass essential leaders such as the CEO, CFO, COO, and departmental directors overseeing areas like snow operations and maintenance. Clearly delineating each individual’s responsibilities is critical to facilitating an efficient and collaborative analysis process. With this collective breadth of expertise, your team will deliver a comprehensive assessment of the organization’s financial position.
To put together an effective team, it really helps to get a handle on your organization’s breakdown structure (OBS). Think about your company’s size, where you work, the kinds of clients you serve, equipment you use, and whether you rely on subcontractors. Take note of who usually looks over the financial info and makes key decisions, so you’re sure to include every important perspective in your analysis.
Profitability shows how well an organization controls its costs. Real-time margin analysis compared to the budget helps spot issues early. If profits are below target, review both revenue and expenses to find the cause. Consistently tracking profitability enables timely adjustments and supports financial stability. It also informs goal setting and helps benchmark against industry standards.
Revenue analysis looks at what’s being sold, finished, and charged. Don’t forget to account for weather patterns or late payments, since they impact cash flow. By understanding revenue streams, organizations can identify profitable clients and services, and focus on areas that require improvement. This analysis helps in optimizing sales strategies and ensuring consistent cash flow.
Operational costs fall into fixed (buildings, land, equipment, vehicles) and variable (mainly labor) categories. Define fixed costs up front, review regularly, and monitor labor closely to manage expenses and keep operations efficient. Deep-diving into labor costs helps understand performance levels and whether additional crew members are needed.
Analyzing financial results over the past three years provides a solid indicator of an organization’s financial trajectory. Examining trends in costs, expenses, profitability, and revenue helps in identifying patterns and making informed predictions about future performance. It helps in understanding whether revenues are increasing at a faster rate than costs and expenses, which is crucial for improving profitability. This historical analysis also aids in setting realistic financial goals and identifying areas that need strategic adjustments.
Consistent financial reviews are critical for staying competitive. By regularly analyzing performance data, organizations can pinpoint gaps and quickly adapt for future growth.
To truly understand market position, compare performance with regional peers and stay aware of weather and environmental impacts that could influence market share. Ongoing reviews keep your organization agile and ready to respond to changing market conditions.
Building a strong team, tracking key metrics, and keeping up with regular reviews empower organizations to make informed decisions, drive growth, and achieve sustainable success in a dynamic environment.
Michael Wagner, CSP, ASM, is Director of Operations for Designscapes Colorado.