The Financial Management Continuum: A Cash Flow Framework
The Financial Management Continuum (FMC) is the term I use to describe the set of processes, components, and cycles that make up a business’s strategic and tactical financial plans. In simpler terms, it’s the process of asking: Where are we financially (e.g., revenue and profit)? Where do we want to go? And what actions and plans will get us there?
Why It Matters
Before diving into the what, why, and how of each process, component, and cycle, it’s important to establish a few key ideas.
The primary goal of the FMC is to maximize the business’s cash flow. But we must also define what kind of cash flow we're trying to maximize. For instance:
The FMC is not a theoretical construct designed to overemphasize the role of accounting and finance. Rather, it's a practical framework that supports the business in meaningful, actionable ways:
As you can see, the FMC and the finance function do far more than just “count the beans.” They help define success, measure where the business stands in relation to that success, and identify where change is needed to reach that success faster.
