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Profitability is dependent on the efforts of all the business plan executers.
- Production meeting the target size of production. lower size of production increases the unit cost.
- Purchasing buying within the forecasted cost.
- Sales matching the approved sales forecast
- Economic state of the target markets
- Implementation of the approved budget to limit the overheads included in the cost calculations
- Increase in cost of services provided by the government.
All of the above affects profitability irrespective of the effeciency of the fainancial manager. An effective fainancial manger should detect this as soon as it shows up and raise the issue with management to handle the situation.
It is not matter of efficient financial manager but efficient marketing manager or sales manager as all the wheel of organization work and run on sales of the company so instead of finding better financial manager , first find better marketing head and then work of financial manager will start.
One strong reason for failure in making profits could be:
Inefficient execution of instructions by subordinates / colleagues. Having an efficient financial manager is great, however it is equally important to have competent and efficient staff to execute and perform in the most productive manner. It is to be noted that employees are a key asset to the organization and they way they function in terms of productivity, quality and efficieny have a deep bearing to the overall success and profitability of business operations
