Your CFO Can Do The Job
Jun 29, 2009
Sharpen your pencil, make sure your intercompany and bank accounts are reconciled, Bankers are taking a hard look at their client's financial statements, and they're more critical than ever!
During the past healthy US and worldwide economy, bankers have been passive observers of their client's financial condition. When bankers questioned a decrease in sales, management provided a compelling explanation. When various ratios were not in accordance with loan documents and covenants were missed, "C" level executives provided rationale that Bankers accepted and ultimately waived the covenant. This is no longer true!
Bankers have begun to request that their clients begin searching for a new bank and banking advisor. Small business is the main target. History is repeating itself for when there is an economic down turn; the large money center banks have jettisoned their small business clients. The odd certainty is that when the economy turns, the large banks will send out their sales minions to bring the small guy back into the fold.
The small and mid-sized business owner panics. That's where a keen financial executive provides the most value. He knows how to speak with a banker. When issues arise that the banker has discomfort, the financial executive can share ideas with the banker, find out what is needed to correct the uneasiness. Ultimately, if the Bank's underwriter is on board, the deal can be consummated. Many times, business Owners really don't know what the Banker needs, cannot be proactive since he's never really analyzed the number of transactions that an experienced CFO has during his career.
Case in point, my client wanted a working relationship with its bank. He asked me to begin a search for a new one. I created a standard package of documents, schedules, etc. that I know any bank requires for any new customer. I sent the documents and set up an appointment with the bank. The banker's first comment was, "everything we needed to analyze the organization was submitted, and we have no further document requests." This was music to my ears because it created validity, credibility and put my client in the best light possible.
So, sharpen your pencils, sit down with your CFO, and figure out your needs. If the need is to find a new Bank, hand the project to your CFO, he can do a successful job for the organization.
Don't have a CFO; feel free to contact me by visiting www.b2bcfo.com/partners/sschertz.com
