Part 1 - Why Your Financials Don’t Tell the Truth
Roger Knocker • September 8, 2025
Why Your Financials Don't Tell the Truth (Even When They’re Perfectly Clean)
I’ve built an activity-based costing system.
For my own group of companies.
It works.
The logic works.
The reports work.
The numbers run beautifully.
Except for one thing.
The data.
The master data isn’t quite right.
Not wrong.
Just... inconsistent.
So we start investigating.
We doubt the results.
We trace back through layers of transactions to find the flaw.
Hours go by.
Not because the tool is broken.
Because the foundations were never right in the first place.
And here’s the bigger problem.
The real problem.
Our trial balance and our financial statements?
They don’t reflect the real business.
At all.
Even though we’ve done everything right.
Dedicated finance team? Check.
Excellent outsourced accountants? Check.
Senior chartered accountants with carte blanche to "sort it all out"?
Check, check, and check.
We have clean audits.
We're compliant.
We tick every box.
And yet...
The insights we get?
High-level.
Irrelevant.
They don’t help our managers.
They don’t help our pricing.
They don’t help us decide what to stop doing.
Meanwhile, finance is pushing debits and credits into the general ledger at a furious pace.
If they were paid per journal, they’d all be millionaires by now.
And when those journals land?
We look at the information.
And it helps us squat.
Nothing.
No insights.
Just questions.
No answers.
No decisions.
Just a few more tasks to investigate what’s going on.
Are the entries complete?
Are they valid?
Are they even useful to anyone outside of finance?
Because here’s the truth most people won’t say out loud:
Finance doesn’t understand the business.
They process hundreds of journals efficiently.
Fast. Neat. Organised.
But the entries are wrong.
Allocated to the wrong products.
The wrong services.
The wrong lines of business.
Calculated on the wrong ratios.
Based on assumptions that no one in operations would agree with.
So when decisions are made?
They’re based on fiction.
Or worse - on “efficiently processed” fiction.
And nobody sees it.
Except business.
They feel it.
They just don’t have the time to audit finance’s work.
Why should they?
Isn’t that what we pay Finance to do?
Because financial systems are built for someone else.
For SARS.
For the taxman.
For the auditor.
Not for the operator.
Not for the person running the business.
Not for the one asking, "Where are we actually making money?"
And here’s the part that really gets me.
We are master data junkies.
We pride ourselves in clean, structured, standardised data.
We obsess over naming conventions, hierarchies, mappings.
So if we're struggling?
What about the companies who don’t care?
Who hire people who don’t care?
Who don’t even know what master data means?
What chance do they have?
As a qualified accountant, I deeply want the financials to be right and adding value - all at the same time.
I tell everyone I’m an accountant.
I love playing for the winning team.
Who doesn’t?
I want our sweat to generate the numbers and tick all the boxes (I’m all for that).
But at exactly the same time, I want them to add business value.
Win/win.
Finance and Business, joined at the hip.
Partners.
Winning together.
Who wouldn’t want that?
So we end up with financials that are easy to print.
Easy to submit.
Easy to tick off.
But useless to run a business.
What would it look like...
...if we rebuilt financial systems from scratch?
Not for compliance.
But for clarity?
That’s what I’m working on.
And it’s harder than it sounds.
But it’s possible.
And it’s necessary.
Welcome to the FP&AI Podcast, where finance meets the future. In this episode, Roger is joined once again by Anthony and Donovan to dive into one of the most critical pillars of a successful finance function: planning. Stay tuned for the next episode, where the discussion moves to collaboration and business partnering in finance. Conversation Highlights: [0:00] Roger welcomes listeners back and recaps the previous episode on setting 3–5 year strategic objectives. He now moves on to the internal perspective of the balanced scorecard, asking: Which processes must finance excel at to satisfy stakeholders? [1:30] Roger notes that while Deloitte’s shareholder value framework lists hundreds of options, most internal objectives can be grouped into a few big themes: planning, quality, collaboration, speed, efficiency, innovation, and governance. [3:00] Anthony emphasizes the importance of planning, analysis, and reporting in finance. He highlights accuracy, timeliness, cost-effectiveness, and well-defined processes across cycles such as month-end, year-end, and budgeting. Clear roles, timelines, and responsibilities are critical for smooth execution. [6:00] They discuss practical planning rhythms. Processes should be reviewed at the start of cycles (e.g., January year-end planning), with regular team meetings—weekly or daily as needed—to monitor progress and address issues. Donovan adds that planning should start before year-end, often as early as mid-December. [9:00] The conversation shifts to dependencies on other departments during cycles like budgeting. Since other teams may not prioritize finance timelines, communication and early engagement are vital. Finance should build these requirements into processes and send reminders to ensure collaboration. [12:00] Roger stresses that budgeting must be framed as a business-wide responsibility , not just a finance deliverable. Departments should take ownership and accountability for their inputs, with finance facilitating and translating commitments into value. [16:00] Examples from IT planning illustrate how continuous engagement with business units avoids last-minute pressure. Finance should adopt similar practices, using ongoing communication and relationship management to integrate planning into everyday operations. [19:00] The concept of finance business partners is introduced. These roles embed in operations, bridging the gap between finance and other departments. They improve collaboration, ensure timely information flow, and enhance the quality of reporting—though organizations often fail to measure the ROI of these roles. [23:00] Roger returns to the importance of early communication and budget guidelines , which help divisions prepare and align. Effective planning should include communication checkpoints and reminders across cycles. [26:00] He adds that planning applies beyond finance—HR, IT, marketing, and all business processes should start with planning. Poor follow-through on insights can leave “money on the table,” highlighting the value of business partners in ensuring opportunities are realized. [28:00] As the podcast wraps up, Donovan stresses the quality and speed of planning , not just the act itself. Standardization and automation can improve efficiency. Anthony adds that planning must be continuous and iterative —even a bad plan provides useful feedback for replanning. [31:00] Roger closes by emphasizing that planning is central to finance and business success. Whether strategic or operational, good planning creates clarity, drives collaboration, and enables long-term value creation.
In this episode of the Smart Business Performance Podcast, Roger Knocker welcomes Anthony Wilson and Donovan Moses to explore the strategic objectives of the finance function and how they can align with broader business goals. The discussion highlights key areas where finance can create value—through efficiency, compliance, working capital management, operating margin improvement, and by acting as a trusted advisor across the business. Tune in now to discover the practical steps finance teams can take to strengthen their role as true business partners. Conversation Highlights: [00:04] Roger introduces the topic of finance’s role in setting strategic objectives and welcomes Anthony Wilson and Donovan Moses. [01:06] Roger explains that strategic objectives set the long-term direction for finance, guiding the function over a 3–5 year horizon. [02:30] Anthony Wilson highlights efficiency as a primary goal, pointing out the growing pressure on finance to deliver faster results. He notes that automation and better tools are replacing reliance on Excel. [06:02] Wilson stresses closing speed as a key efficiency benchmark, explaining that top performers close in a few days while others can take weeks. [06:49] Donovan Moses identifies working capital optimization as a critical objective, emphasizing the need for collaboration between finance and supply chain to ensure cash isn’t tied up unnecessarily in excess inventory. [11:27] Roger introduces operating margin improvement as another finance objective, noting the importance of tracking customer profitability, asset utilization, and ROI on projects. [14:18] Wilson highlights the customer perspective, explaining that stakeholders expect accurate, timely, and consistent information. Dashboards and data visualization are recommended as more effective tools than spreadsheets. [17:31] Wilson explains how visualization enables the business to detect trends and shifts more quickly, improving decision-making. [23:16] Moses emphasizes the importance of compliance and risk management, pointing out that reliable execution of payroll, tax, and credit processes is essential for business stability. [27:12] Roger stresses that once compliance and efficiency are established, finance can step into the role of trusted advisor, supporting leaders with insights on pricing, costs, and profitability. [29:37] Wilson reinforces that finance must build trust by delivering efficiently and reliably before moving into advisory functions. [30:32] Roger closes the discussion by summarizing six key finance objectives: efficiency, working capital optimization, operating margin improvement, delivering trusted information, compliance, and advisory partnership. About Our Sponsor: KPI Management Solutions helps organizations achieve their stretch goals using KPIs, OKRs, AI-enabled technology, and training.
