FINANCIAL MANAGEMENT ASSESSMENT TOOL

Financial Management Assessment

Strong finance = durable business. This practical assessment gives owners and leaders a clear, honest read on the financial health of their company—so you can spot risks early, protect cash, and make smarter, faster decisions with confidence. It looks beyond the P&L to evaluate the full system: data, habits, accountability, and execution.

Why this matters

Companies rarely fail from lack of effort—they stumble from lack of visibility and discipline: cash crunches, fuzzy pricing, slow receivables, unplanned debt, or budgets that don’t match reality. This tool shows exactly where your practices are solid and where to tighten up, turning numbers into choices you can trust.

What you’ll assess

Fifty focused questions across the essentials:

• Financial Metrics & Decision-Making — Timely statements, core KPIs/ratios, benchmarking, and using numbers to set priorities.

• Budgeting & Forecasting — Operating budgets, rolling forecasts, cash visibility, and scenario planning.

• Revenue & Profit Management — Pipeline accuracy, pricing discipline, margin focus, customer profitability, and retention levers.

• Cash Flow Management — Reserves, AR/collections rhythm, working capital hygiene, and cash accelerators.

• Debt Management — Structure, cost, covenants, debt-to-equity, and the business case for borrowing.

• Financial Risk Management — Contingency planning, insurance coverage, vendor/customer concentration, and downturn readiness.

• Operational Efficiency — Cost discipline, inventory turns, supplier terms, and productivity standards.

• Technology & Automation — Finance stack, reporting automation, dashboards, and collaboration with ops/sales.

• Financial Literacy & Team Development — Leadership fluency, open-book habits, and company-wide understanding of the economic model.

• Strategic Financial Management — Value creation plan, growth pace, tax strategy, capital allocation, and exit/long-term alignment.

How it works

1. Rate each statement on a 1–5 scale (Strongly Disagree → Strongly Agree).

2. Capture notes for any low scores to document causes and quick fixes.

3. Total your score and review the category breakdown to find high-leverage improvements.

4. Pick 2–3 priorities (e.g., cash discipline, pricing, forecasting) and assign owners, timelines, and success metrics.

5. Recheck quarterly to confirm progress and prevent backsliding.

Score ranges (at a glance)

• 200–250: Excellent — Strong practices and visibility. Optimize pricing power, automate reporting, and sharpen capital allocation.

• 150–199: Good — Solid footing with gaps. Choose two upgrades (often AR cadence and forecasting accuracy) and lock them in.

• 100–149: Fair — Mixed performance. Stabilize cash, clarify pricing/margin rules, and tighten budget-to-actual reviews.

• 50–99: Needs Improvement — Install basic controls, document processes, and bring in experienced guidance.

• Below 50: Major Changes Needed — Protect cash immediately (collections, spend freeze), then rebuild fundamentals.

Quick wins by category

• Cash: Weekly cash forecast; “collections Tuesday” with clear owner; early-pay incentives.

• Pricing/Margin: Minimum viable margin by product/service; discount guardrails; cost-to-serve analysis.

• Forecasting: 90-day rolling forecast; base/downside/upside cases with triggers; owner sign-offs monthly.

• Costs: Vendor laddering (A/B/C), renegotiate top 5 terms, spend thresholds that require ROI.

• Debt: Map amortization and covenants; match loan terms to asset life; prep a lender briefing pack.

• Reporting: Close by day 10; one-page dashboard (cash, margin, AR days, backlog, pipeline).

• People: Finance 101 for managers; monthly results huddles; tie incentives to margin and cash.

Common pitfalls (and how to avoid them)

• Living in last month’s numbers → Move to weekly cash + rolling 90-day forecast.

• “Profit-rich, cash-poor” surprises → Enforce deposits, milestone billing, and collections cadence.

• Discount drift → Require approval for price exceptions and track win rate vs. margin.

• No clear owners → Assign named owners for cash, pricing, and forecast accuracy.

• Tool sprawl → Standardize your finance stack and automate the handoffs.

What improves when finance improves

• Speed: Decisions happen with clarity, not debate.

• Resilience: Fewer surprises, better shock absorption.

• Profitability: Pricing, mix, and spending align with strategy.

• Trust: Leaders run the business by the numbers—and the team knows what “good” looks like.

60-minute leadership review (sample agenda)

• 0:00–0:10 — Dashboard: cash, AR days, margin, pipeline

• 0:10–0:25 — Budget vs. actuals and forecast (variance + actions)

• 0:25–0:40 — Top two financial risks and mitigations

• 0:40–0:55 — Decisions needed (pricing, hiring, spend)

• 0:55–1:00 — Owners, due dates, and how we’ll measure success

Ready to strengthen your financial engine?

• Start the Assessment (10–15 minutes)

• Share category scores with your team and pick 2–3 upgrades

• Schedule a 90-day follow-up to verify improvements

Created by Capacity Building Solutions, Inc.—practical tools for leaders who own the outcome.