Every role in a construction company is critically important. The people who are planning and executing projects big and small can make all the difference in safety, client satisfaction, and project quality.
But what about your finance function?
Especially with economic uncertainties and pressures abound, staying on budget and planning for the future is even more critical.
That’s where your Construction Finance Manager (or CFM) comes in. The person in this role can make or break the success of projects and even of your company. Here’s why.
What is a CFM? What Do They Do?
This professional serves as your company’s leader on financial matters. They make sure your money is accounted for, collected quickly, and spent wisely.
The role typically includes:
- Preparation of financial statements (weekly, monthly, quarterly, and annual)
- Managing and reporting on project expenses and noting variances
- Supervising accounting departments (if your company has one) or third party bookkeepers and accountants if you outsource the function
- Doing double-duty as an accountant and bookkeeper at smaller companies
- Working with banks and other financial institutions
- Overseeing vendor payments and payroll processing
- Staying on top of regulatory issues that have an impact on financials
- Preventing theft and fraud
- Reporting to the company owner and management on cash flow and offering up suggestions for cost containment and management
The skills required for a CFM typically include a degree in accounting, business administration, finance, or a similar field.
Although financial management skills are critically important, having a CFM with great people and communication skills can also be a huge advantage. After all, this professional will be dealing with outside companies (banks, accountants, etc.) and other team members (like HR and project managers, as well as the company leaders and maybe even your field teams), so being able to clearly express issues and solve problems is vital.
Having broad and deep experience with the construction process is essential. Knowing the terminology of the industry and being able to spot irregularities and variances is critical, as is looking for creative ways to cut costs without sacrificing quality or hurting team productivity.
Today’s CFM must also be adept at technology, especially systems that make financial and accounting management simpler and faster.
Construction finance managers can earn upwards of $100k. The specialty even has its own professional association, which is a great way for people in the field to learn from other CFMs and develop new skills.
The Evolving CFM Role
As noted above, technology and the ability to use it to manage and control expenses is critical to every business today. Many construction companies and their CFMs have been slow to automate financial functions. But staying on top of these solutions is more important now than ever before.
When various aspects of financial management are automated, the CFM can:
- Have greater control over spending
- See “real time” data and spot problems and variances much faster
- Communicate with other decision-makers within and outside a company
- Manage monthly and annual closing processes faster and with fewer resources (which, in turn, saves money)
- Report on finances to company management and make changes to budgets with just a few clicks
- Have access to data 24/7/365, from any location
The 7 Qualities a CFM Must Have to Succeed
Perhaps you already have someone in that role in your company. Make sure they have the staff, resources, and technology they need to excel in that job.
Treat them as a valued member of your management team and make time to sit with them on a regular basis to go over the financial health of individual projects and your company as a whole. The sooner you spot issues and act on them, the more profitable your company will be in the long run.
As your company grows, evaluate the skill set of the people who work in financial functions within your company. In small companies, the CFM wears many hats. But, if you are scaling, you should consider hiring additional staff to manage more of the tactical functions so that your CFM can focus on bigger issues that impact your construction company’s bottom line.
Let’s face it…the person who manages the money in any company is sometimes not popular with other team members. After all, they may have to say “no” sometimes or put tighter controls in place to manage expenses. Make sure you have a CFM who knows how to build trust within the organization so that they are respected by peers and outside entities.
When you’re hiring for that role, look for:
- Previous related experience in the construction industry
- A good “fit” with your current team
- Attention to critical detail
- Creative and rapid problem-solving abilities
- Solid communication skills
- Ability to “get their hands dirty” when necessary, especially if your company is smaller
- Willingness and eagerness to adopt technologies that streamline your business
Tools for Success
Just as your construction team can’t complete projects without the right vehicles, equipment, and budget, your CFM may need third party resources to help them to the best possible job, set-up the right controls, and make your company more profitable.
Accountants, bookkeepers, and sources of credit are all part of that mix. But the right automated system can also give the CFM a better chance of success and growth in the role.
Vendrix puts construction finance managers in the driver’s seat of their company’s spending. Our simple spend management tool gives you the opportunity to take advantage of advanced spend control and expense technology with no fees. Contact us today, your CFM will thank you for it!