Applying BSC For Finance

Financial management is a tedious process that requires a highly technical knowledge of effective balancing and application of principles for ensuring that there is efficient distribution and handling of financial resources. Those who are in charge of such management are often required to render hours of analysis and computations in order to make sure the job is well done and that there is little or no risk of financial downfall. For this reason, extensive diligence is often required. Also, there is a constant need to monitor the performance of those having the duty of managing a company’s finances. Thus, the Balanced Scorecard (BSC) instrument finds application. Using BSC for finance management admits of several advantages that are sure to make the entire management process secure and efficient.

What are the advantages of applying the Balanced Scorecard for effective financial management? The main advantage lies in the nature of the instrument, which utilizes a balancing method of all the aspects of a company to ensure that everything is in good working order and that all aspects conveniently and efficiently cooperate with each other, ensuring that there is a maximum output with minimum input. The Balanced Scorecard instrument makes sure that the evaluator is able to consider a company’s performance in its entirety. In fact, all the company’s aspects are taken into consideration. For this reason, the user can see the company from a bird’s eye view, so to speak, in order to see all the strengths and weaknesses of a company.

Another advantage is that the entire process of financial management is made easier without sacrificing the quality of the work rendered. It is one of the features of the Balanced Scorecard to set the guides for which the user will conduct the evaluation process. The user can rely on these guides to effectively perform management duties and whatever duties may be required of the user’s function. The entire process is simplified by reason of the use of the Balanced Scorecard because of the guides that result with its usage. This will, in turn, result to lesser expenses. In every evaluation process, the first matter being decided upon is the expenses that will be incurred in the process. Because of this, some companies would even decide to forego an evaluation process if it means saving up on finances, which may be applied later on to other matters.

However, if the Balanced Scorecard is used, the user can be sure of much more savings and lesser expenses since there is already an established mode of evaluation without the unnecessary need to employ experts or conduct extensive surveys and studies to obtain the same results. Also, with lesser expenses come a lesser time period within which to complete the evaluation. In the same vein, as expenses are lessened, the simplified process also saves time and effort. This means the company will be able to get results in lesser time, giving it more freedom in planning its activities and objectives.