McDonalds Finance Director - Essay Example

McDonald’s Finance Director al Affiliation Finance director is an important figure playing a significant role in financial managementand the smooth running of organizations. Financial directors are concerned with many things including profit and loss operations, control of funds, ensuring available cash flow and controlling internal funds. Moreover, finance directors are concerned with raising funds, investment of funds, cost control, and forecasting/ measuring financial performance against expectations (Jennings, 2013). There are many positions subset of finance director such as accountants. There are specific roles of finance directors such as strategic planning of financial future of organizations, overseeing and ensuring proper controls within the organization and making sound financial decisions such as investment decisions. This essay explains and evaluates a detail official description of the role of finance director in McDonald and comparison of the description to that found in at least three different job adverts. According to Sawers (2009), Finance director at McDonald provides insight across all business functions and works closely with other finance related departments especially marketing and supply chain and further supports the company’s franchisees by building projection tools. Finance director advices on financing options, optimizes business plans, sets, and monitors financial and other targets (Sawers, 2014). Finance directors ensures rigorous project management discipline and works closely with product and marketing teams to finance the launch of activities and further evaluates, measures and monitors performance against financial and other targets. Finance department is at the heart of McDonald Company, incorporating many functions that go beyond its traditional financial reporting role. McDonald’s Finance director ensures that the organization maximizes its strategic abilities by shifting the emphasis of their accounting and finance functions to integrate evaluation of past performance and appraisal of future opportunities (Ionescu, 2010). McDonald uses integrated accounting and finance function that extends from the restaurant floor up to the board of directors and every individual subsidiary restaurant is structured as an independent business responsible for its financial performance (Sawers, 2009). Finance director therefore oversees financial performance of individual McDonald restaurants across the world and further ensures that centralized Accounting and Finance functions are undertaken. Moreover, McDonald’s Finance Director has a key responsibility of ensuring that Finance Department‘s main responsibilities including financial reporting and management accounting are fully implemented (Crump, 2014). The two roles of Finance Department are integral in making the company have the best financial position now and in future. It is also the responsibility of Finance Director at McDonald to advice on whether to reinvest the profits made by the company to generate future cash flows through building of new restaurants, reinvesting in existing restaurants, or paying off debt to reduce financing costs. Sawers (2009) explains that Finance Director alongside McDonald’s Finance team carries out financial appraisals before making any reinvestment decision such as paying dividends to shareholders. Sawers (2009) asserts that Finance Director at McDonald has ensures many other financial targets and measures through formulation of relevant targets for the business and report actual performance against the targets. Analysis of actual performance against targets allows the McDonald’s management highlights areas where improvements may be required within the organization. Additionally, Finance Director helps in planning and projections by leading the planning process and collaborates with other functions to ensure alignment with company’s goals and targets as well as preparing and building the 3 year plan and annual budget according to APMEA timeline (Governance and Corporate Finance, 2011). Finance Director also monitors the three year plan and leads quarterly reviews, identifies gaps between plan and performance and provides solutions and further prepares and updates monthly projections as per the business trend. Moreover, Finance Director at McDonald acts as an overall auditor by planning and coordinating US GAAP or the local GAAP and SOX audit if applicable as well as developing, implementing and maintaining systems, procedures and policies consistent with the company’s guidelines. Crump (2014) posits further that Finance Director establishes and maintains internal control procedures to safeguard corporate assets and minimize fraud cases or any possible loophole. Some of the accounting transactions carried out by Finance Director at McDonald include ensuring financial practices comply with rules and company guidelines , policies and procedures as well as maintaining and monitoring cash handling and cash in bank (Governance and Corporate Finance, 2011). According to Sawers (2009), Finance Director also ensures accuracy and timeliness of monthly book closing by managing all key accounting processes such as General Ledger Accounts, Accounts Receivable , Fixed Assets and payroll as well as understanding different restaurant systems such as POS and back office systems and crew payroll system. The other accounting transactions handled by Finance Director are handling various payments such as Store Expenses, G &A Expenses, Reimbursements, and Loan Payments and instituting proper internal control systems about payments (Ionescu, 2010). Regarding corporate reporting, Finance Director at McDonald ensures that all financial numbers are consolidated for both internal and external presentations and that all statutory reporting including tax fillings are completed accurately and on timely basis (Crump, 2014). The Finance Director further ensures accuracy and timeliness of various financial reports that offer relevant information for stakeholders such as McDonald’s Corporate Leadership Team and Leadership Regional Team and provides prompt response on any enquiries from any key stakeholders. Moreover, Finance Director at McDonald ensures transparency on financial results with clear communication and opportunities. Finance Director also has a responsibility of supporting the business by collaborating with other departments to support overall company goals and objectives (Jennings, 2013). Finance Director further builds and maintains effective relationships amongst a range of key stakeholders such as McDonald’s leadership Team, the APMEA Leadership Regional Team as well as identifying the scope of information needed to run the business effectively. Finance Director also provides significant financial analyses to support company initiatives and investment decisions. It is therefore clear that Finance Director plays an important role in supporting McDonald operations (Governance and Corporate Finance, 2011). Finance Director at McDonald helps in staff, people training, and development that includes recruits, coaches and develops future direct reports in understanding, shaping and implementing the policies and processes for finance function as well as hiring, coaching accounting staff to create the best financial talent (Governance and Corporate Finance, 2011). Finance Director ensures accounting staffs developed and natured become useful for future opportunities within the system and takes responsibility for own development of business knowledge, finance expertise and leadership skills (Christensen, 2012). Moreover, Finance Director builds strong relationships and fosters teamwork among department and staff to achieve maximum performance and further briefs oversees and guides team to achieve the company and department goals. Crump (2014) asserts that Finance Director also conducts annual performance reviews and succession planning for Finance department and ensures that Finance has the right organizational structure to meet the business needs as the organization grows, such as reviewing roles and responsibilities as the requirements change. Finance Director at McDonald obtains information from various department and sections including Accounts Department, Financial Management Department, Audit Department, Supply chain Management and Marketing Department. A centralized accounting center processes all accounts receivable and payable transactions, banking income, working capital management, and maintaining fixed asset registers that provides Finance Director with sufficient information for analysis and evaluation (Mevorach, 2013). There are also treasury and tax experts that ensure compliance with tax laws and ensure the company has sufficient cash flow and adequate finance to meet business obligations as well as other compliance report necessary for decision making processes by Finance Director. Additionally, there are payroll staffs responsible for the accounting and payment of wages that report to Finance Director. Finance Director uses all the information provided by various departments in making strategic decisions. Finance Director also gathers information from McDonald’s competitors to maintain market share in an ever increasing competitive environment (Christensen, 2012). Considering an advertisement for a Financial Director position in a leading South Africa’s Consumer Experience Agency Group, there are roles required by the company that are similar to Finance Director from McDonald (LinkedIn, 2014). Some of the roles shared by the two Finance Director positions include overall control of the company’s accounting function, preparing annual accounts, financial planning, and advice for the senior management and formulating financial targets and budgets consistent with strategies determined by the board (Crump, 2014). Both Finance Director positions also carry out financial modeling and cost/ management accounting and ensuring that regulatory requirements and statutory requirements are met accordingly. According to LinkedIn (2014), the Advisory Board Company also posted a position for Finance Director whose responsibilities are similar to the responsibilities of McDonald’s Finance Director. Some of the shared responsibilities include developing and implementing sound financial practices, establish internal controls to monitor and ensure compliance. They both develop operational reports with financial and operational information for the management team as well as overseeing monthly spending activity, preparing financial pro-forma and conducting financial analyses (Mevorach, 2013). They also administer employee income distribution and implement a budget process as well as developing and reviewing the accounting for the high risk areas. However, the Finance Director in the Advisory Board Company performs other functions that are slightly different from the Finance Director at McDonald because their organizations deal in different lines of business. LinkedIn (2014) provides some of the roles of Finance Director at the Advisory Board Company include analyzing financial operations of physician practices, evaluates, and recommends appropriate fee levels for all physician and technical services. Moreover, the Finance Director oversees physician income distribution as per Physician Service Agreements. Another job description is Financial Director at MPC Recruitment Group an EOH Company that requires the Financial Director to oversee annual audit, compile annual, participate in decision making process and providing strategic input, initiate and implement any cost saving ideas and managing working capital (LinkedIn, 2014). Both Finance Directors further review financial reports, input, and participation across all departments including Sales and HR. It is clear that Finance Directors almost have similar roles regardless of their respective organizations. There are common and basic responsibilities across the board and they are what define the position they occupy. Some of the common responsibilities for finance directors include ensuring financial practices are in accordance with accounting standards, their company guidelines, policies, and procedures as well as ensuring that there is proper implementation of internal control systems (Christensen, 2012). Reviewing of financial reports as well as statutory returns is also carried out by the Finance Directors. However, there are some responsibilities carried out by the Finance Directors based on their respective organizations. Different organizations have their own culture and values that define their style of operations and therefore Finance Directors in those organizations must adhere to the guidelines and practices in the organizations where they work. References Jennings, M. M. (2013). Literature and Ethics in Finance. Corporate Finance Review, 18(3), 29-33. Retrieved from http://search.proquest.com/docview/1470780784?accountid=45049 Governance and Corporate Finance: Changing dynamics. (2011). Decision, 38(3), 5-25. Retrieved from http://search.proquest.com/docview/920751755?accountid=45049 Mevorach, I. (2013). Forum Shopping in Times of Crisis: A Directors Duties Perspective. European Company & Financial Law Review, 10(4), 523-553. doi:10.1515/ecfr-2013-0523 Ionescu, L. (2010). Director Overlap, Ethical Financial Reporting, and Improvements in Disclosure Quality. Economics, Management & Financial Markets, 5(1), 183-188. Christensen, J. (2012). Financial Skills Are Not Enough. Financial Executive, 28(6), 58-61. ExecutivesontheWeb.com. (2014). Executive Jobs and Global Executive Recruitment. Retrieved from http://www.executivesontheweb.com/articles/what-is-the-job-description-for-the-role-of-a-finance-director-201 Institute of Directors. (2014). The Role of the Finance Director. Retrieved from http://www.iod.com/guidance/briefings/cgbis-the-role-of-the-finance-director LinkedIn. (2014). Financial Director: MPC Recruitment Group an EOH Company - South Africa. Retrieved from http://www.linkedin.com/jobs2/view/10853993?trk=jobs_search_public_seo_page Linked in. (2014). Director Finance: The Advisory Board Company-TN. Retrieved from http://www.linkedin.com/jobs2/view/11876986?trk=jobs_search_public_seo_page LinkedIn. (2014). Financial Director: The Creative Counsel- Johannesburg Area, South Africa. Retrieved from http://www.linkedin.com/jobs2/view/10846167?trk=jobs_search_public_seo_page Crump, Richard. (2014, February 26). Interview: McDonald’s CFO Paul Pomroy. Incisive Financial Publishing Limited. Retrieved from http://www.financialdirector.co.uk/financial-director/interview/2328784/fd-mar-mcd-profile-p22-25-subbed-rs-cf Sawers, Andrew. (2009, March 23). Not clowning around: McDonalds FD, Brian Mullens. Financial Director. Retrieved from http://www.financialdirector.co.uk/financial-director/feature/1744590/not-clowning-mcdonalds-fd-brian-mullens Read More