The role of a Chief Financial Officer (CFO) is often strategic and crucial in managing a company’s financial health and contributing to long-term business growth and success. While some startups and SMEs might not have a CFO – typically a high-paying position – there are other ways of ensuring that financial actions are sound. AcuMed Medical, a local primary healthcare provider with 12 clinics in Singapore, is a good example of a company that currently does not have a designated individual CFO, yet still continues to thrive – and succeed.
“We recognise the key role that a CFO plays in ensuring the financial success of a company,” says Mr Jeffrey Yam, Director, AcuMed Medical. “But instead of hiring a designated CFO, which can be expensive, we’ve instead equipped our accounting and finance team to think strategically in financial management.”
In 2016, the company participated in the SME Business and Financial Management (BFM) Programme organised by the Singapore Accountancy Commission, Singapore Business Federation and Singapore Management University. They had the chance to be mentored by experienced CFOs and at the same time, pick up practical skills related to financial restructuring, mergers and acquisitions and risk management, analytics, budgeting, and cash flow management.
Making better decisions
AcuMed has since transformed the way it operates. Mr Yam and his team have taken on a more analytical and systemic approach in financial planning. Management reports are now more structured and existing financial processes are continuously reviewed towards being more focused and robust. “We make accurate and strategic decisions faster as we are more aware of the related risks. It helps us to make sure that we are very prudent in the steps we take,” adds Mr Yam.
The company now makes better decisions that help better manage their cash flow, among other things. “This is important as operational and manpower costs are increasing, so we have to better manage the budget,” he says.
More importantly, besides empowering AcuMed’s team to gain better control of its budget, the acquired skill set has strengthened the team’s foresight and helped to take the business to the next level.
Beyond better financial management, AcuMed has also implemented a risk management framework. This has helped the company identify risks, especially in areas such as operations, human resources and finance. Staff are now better able to prioritise their risks and establish steps to effectively minimise them. With the new framework in place, AcuMed is now better able to assess risks with the tools it has and identify what it needs to prepare for the future.
“Developing a risk management framework has really transformed how we make decisions. For example, we use this framework to assess the risks, costs and benefits of various aspects of our expansion,” says Mr Yam.
The benefits gained from this systematic, analytical way have not only enabled AcuMed to make better financial and non-financial decisions, but it also has a positive impact to its clients. This has allowed AcuMed to have an edge over other healthcare service providers. Mr Yam says, “Our patients and clients directly benefit from cost-savings as we try to manage various types of costs such as purchasing and procurement”. As the company becomes more efficient, it aims to better care for its patients and clients by offering a wider range of quality healthcare services at an affordable price and in a speedy manner.
On track for future growth
This new way of operating has given AcuMed the confidence to carry out its future growth plans. For instance, it has plans to set up more primary care clinics across Singapore and expand its range of healthcare services.
It also hopes to open its first primary care clinic outside Singapore soon. While acknowledging that growth has its risks, Mr Yam has faith in his accounting and finance team, who strives to mitigate any financial risks that come with the company’s growth and expansion.
“This new structured approach together with the financial planning capabilities has put us on the right track to managing our business,” he says.
This article first appeared on: https://www.smeportal.sg/content/smeportal/en/bizguides/finance/2017/dealing-with-finances-the-unconventional-way.html