FINANCE leaders need to play a more active role in managing businesses or risk it becoming static.

This means getting their hands dirty and being more intimate with the day-to-day workings of the businesses so that they understand the whole impact the decisions they make have on the organisation, said Gabriel Low, fellow of the Association of Chartered Certified Accountants (ACCA) and member of its Global Forum for SMEs.

A forum paper, Building the Finance Function in Growing Businesses, also noted that while much of the discussion on business growth assumes that growth is a potential option for businesses at all times, the reality is very different.

"The SME Global Forum has looked at what makes a company grow in detail and a key starting point is the notion that growth is not something businesses can dip in and out of will; it requires constant management and analysis using timely and accurate data," said Mr Low.

"Without this, rapid growth can be scuppered by what might seem to be very simple risks, such as overlooking loyal customers."

The paper made some key recommendations for businesses to develop an environment conducive for growth:

  • Ensure that business plans for growth are designed to be 'living documents' that can adapt to the fluidity of the markets within which it operates;
  • Invest in data infrastructure as growing businesses need to be able to perform data mining and have access to actionable real time information;
  • Ensure that even as the company reaps the benefits of outsourcing, it develops its in-house capacity in tandem so that it is self-sufficient;
  • Develop and grow strong financial leadership; and
  • Understand what growth will look like.

Growth can be impacted by factors such as where it occurs in the business cycle, market changes, and finances.

It is also crucial to understand how growth may impact on the businesses including staff fatigue and customer bases.

"Across the world, there is a major policy focus on supporting SMEs, but merely encouraging more SMEs to form will not deliver the desired outcomes; enterprise policies have to be accompanied by efforts to understand and support the sustainability and growth of businesses," said Mr Low.

"CFOs and finance directors of growing businesses must become the central information hub for the business - consolidating, synthesising and disseminating information to where it is required, be it to meet new regulatory and compliance targets, scan their environment for funding or business opportunities, or make the case for new activities such as exporting."