Financial risk # 4 essential finance roles

Essential finance roles

Do you have the right mix of skills and experience in your finance function?

We are often asked to try to assess whether an organisation has proper capacity in its finance team (both in terms of the time required and the skills/knowledge needed for all the relevant tasks).

In “Financial Leadership:  Guiding Your Organization to Long-term Success” [1], co-authors Jeanne Bell and Elizabeth Schaffer identify 3 different roles that need to be present in the finance function – transactional, operational and strategic:

  • The “transactional role” includes the administrative functions involved in making individual transactions (such as the preparation of payments) and ends with the capturing of transactions in the accounting system. At Ziyo we would go one step further and split this transactional role into two distinct elements, namely financial administration and bookkeeping.  Both these elements require great accuracy, care and attention to detail!
  • The “operational role” focuses on checking the accounting records for accuracy and ensuring that:

o   regular and useful financial reports are prepared for management, board and funders; and

o   relevant laws and regulations are complied with.

  • The strategic “role” involves financial planning (to ensure that the organisation is financially sustainable), financial analysis, system development and communication with external stakeholders about the organisation’s financial position.


Every organisation, large or small, needs to ensure that all three roles are given attention in their finance function; it is then organisational complexity and size that will indicate how much capacity each role requires.  Whether for cost or other reasons, many organisations attempt to fill all the three roles with one finance staff member – the success of this will then depend largely on that employee’s range of competencies; however, in our experience, this may leave significant gaps in the finance function.

It is true that many smaller organisations often cannot afford the full-time services of suitably skilled people to fill the finance roles, often struggling even to appoint appropriately skilled staff for the basic transactional role of financial administration.   Strategies, such as outsourcing the bookkeeping and/or payroll tasks, may release the available internal finance staff for the other roles but we find that it is often the routes of hiring part-time strategic and/or operational finance staff and/or investing in an external service provider as an operational and/or strategic partner that are seen to provide the greatest benefit.

We therefore urge you to carefully consider the potential gaps and related risks in the finance function of your organisation and to address them creatively.   


[1] Jeanne Bell and Elizabeth Schaffer, Financial Leadership: Guiding your Organization to Long-Term Success (New York: Turner Publishing/Fieldstone Alliance, 2005)