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Value Based Finance

Creating Value through Excellence in Financial Management
6903 29th St N • Arlington, VA 22213 U.S.A.
Phone 1-877-807-8756 • Email: matt@exinfm.com
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Higher Level of Finance

Your organization may have certain basic components of finance in place, things like performance evaluations, forecasting, and cash flow management. However, you should not stop with the basics, but continue to improve the scope of financial management so that it creates higher value (value based finance).

These finer points or higher levels can include specific practices:

  • Are you using good economics when evaluating projects?
  • Are you going beyond traditional Discounted Cash Flows where uncertainty levels are high? And almost every project has some degree of uncertainty when it comes to cash flow.
  • Have you established a good set of targets for meeting financial objectives while maintaining an optimal capital structure?
  • Are you measuring your cost of capital based on current market conditions with consideration for future identifiable trends?
  • Should you include economic value-added (EVA) or cash flow return on investment (CFROI) as part of your performance evaluation?
  • Do you have competitive intelligence research techniques to monitor the competition and think strategically?

This collection of "best practices" is the baseline for Value Based Finance. And the list goes on depending upon your current financial management practices. My personal goal is to assess your current practices and get you to a higher level. This may involve a post audit of some of your past financial practices. The final result is to implement strategies that increase the value of the organization.

Understanding what drives value and mapping these value drivers across the organization can help get the business focused on how to create value. Linking these value drivers to core competencies is the "glue" that enables execution.

 

 

 Significant Impact

If you really want finance to create value, then you will need to take a more strategic approach. Value Based Finance is much more inclusive and broader in scope when compared to traditional approaches to accounting and finance. For example, finance may partner with human resource personnel to develop a set of HR metrics for driving higher levels of performance. Perhaps there is a need to measure the primary drivers of performance within your business model since management has a narrow focus on numbers only. This can include measuring intangibles, such as applying the Leadership Practices Inventory model for assessing the effectiveness of leadership.

I invite you to accept this challenge of moving finance out of traditional accounting and into a much more strategic driver of performance.

An emphasis on value transcends across the business, whether its by function or stakeholder group. Knowing the value proposition in terms of value points is how a business returns value over the long-run.

Partnerships

In order to provide a full range of services to meet your needs, I may partner with other consulting firms, such as Resources Global and the Alliance for Corporate Wealth.

Questions

If you need more information about my services, then give me a call at 1-877-807-8756 or submit the Feedback Form. You can also download the following information:

  • Click Here to download an Introductory Packet for Prospective Clients
  • Click Here for a quick 2-Page Flier on Value Based Finance
  • Click Here for billing rate information