What is commercial finance and what does a commercial finance professional do?

Definitions for commercial finance can vary depending on the organisation and this role may encompass several areas of responsibility and financial discipline

Often, a commercial finance professional is a finance business partner who might support non-finance functions such as operations, marketing and sales. They provide insightful and influential analysis to assist management in making well-informed commercial decisions. They will challenge the business to make improvements, such as streamlining expenditure, to maximise profit and improve financial performance

Commercial finance professionals may also provide regular analysis of sales performance against targets to highlight variances and identify areas for improvement. They may support new product development through the preparation of budgets and forecasts and often provide financial input into new contract negotiations.

Key responsibilities

Responsibilities will vary, but examples include:

  • Preparing insightful reporting and analysis to support management decision making, and identify significant trends/issues, e.g. monitor performance against forecast and pipeline.
  • Providing finance business partner support to operations, commercial or sales directors, influencing behaviours and performance through insights and understanding of key drivers and trends.
  • Analysis of sales/margins - volume, price, mix vs. forecast - identifying issues, recommending actions, measuring outcomes.
  • Leading and improving the budgeting and forecasting processes including: agreeing, reviewing, challenging commercial targets with business/department leads.
  • Managing ongoing forecasting and finance review to ensure commercial risks and opportunities are highlighted.
  • Coordinating and leading the annual financial planning process.
  • Developing a long-term strategic sales plan.
  • Providing assistance with modelling and scenario testing for new business opportunities.
  • Estimate the ROI for retail marketing campaigns.
  • Driving margin enhancement initiatives, structure deals to drive optimal ROI.
  • Reviewing and approving all commercial proposals; supporting the bid and tender process.
  • Evaluating promotional plans and strategies.
  • Develop and improve accounting & control processes to ensure that results are reported appropriately and on a timely basis.
  • Driving the monthly business performance management process with senior management, ensuring accurate and timely delivery of information.
  • Measuring and reporting monthly KPI's to senior management.

Why are they important?

Commercial finance professionals will often have an active role in strategic and commercial decision-making. The role is highly analytical and commercial finance professionals are responsible for supporting management by providing high-quality analysis, information and forecasting to enable informed decision-making that will have a direct impact on the financial performance of a business.

Skills needed for this role

A commercial finance professional should have a pro-active and collaborative approach, along with excellent communication and interpersonal skills to be able to liaise with and influence colleagues at all levels. Strong analytical, numeracy and modelling skills are essential, along with a highly developed commercial awareness. Individuals should be able to work under pressure and to deadlines.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Advanced Performance Management

Career opportunities presented by this role

Commercial finance professional opportunities are widely available in sectors such as retail, manufacturing and leisure. Opportunities range from analyst, through to manager and ultimately head/director of commercial finance.

Competencies

High level competencies required include:

  • Advisory and consultancy

    A. Gathers and understands financial and non-financial information to develop complete knowledge of the client business and the environment in which it operates.

    B. Provides expert advice that will add value to the business and gain advantage.

    C. Identify and advise on business partnering to develop strategic relationships to create opportunities, improve performance and solve business problems.

    D. Prepare and present business plans and advise on the actions to implement these plans.

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.
     

  • Management accounting

    A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.

    B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.

    C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.

    D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.

  • Strategy and innovation

    A. Applies business acumen and commercial awareness to deliver business objectives.

    B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.

    C. Evaluates, justifies and implements suitable strategic options.

    D. Adopts and applies innovative methods to implement strategy and manages change.