Get Professional Help Before You Must Get Professional Help
Dec 30, 2011
Over the course of this year, I have had the pleasure of working with a firm that already has competent financial management. In fact, the company has a very competent CFO. Their CFO, however, recognized that he was young and somewhat inexperienced. They asked me to help mentor their young CFO.
When I first started working with the company, some of the earliest questions revolved around international transactions. The company was only about three and half years old and just started importing from a Chinese supplier. The company needed letter of credit capability. The company had a small line of credit through a Credit Union, but that institution couldn’t handle their international needs. I introduced them to a full service bank.
The company had recently changed their professional services provider to a single organization that provided tax and legal services. However, after discussing their tax return, I was not certain that the company was receiving sound tax advice. I suggested that they have a Tax Professional that I trusted, review their return. As I suspected, there were a number of questionable items that should be corrected. It became clear that it was in the best interest of the company to change tax firms so my contact became their tax preparers. I also suggested the name of a local attorney who I felt would be a good fit for them.
In the end, in less than a year, I have advised them to change banks, CPA firms and attorneys. Fortunately, they are delighted with all of my suggestions. To their credit, they have not been afraid to get help. They are showing particular wisdom. They get excellent professional advice to avoid problems rather than waiting until there is a problem and being forced to pay to get the problems corrected.
Beyond these recommendations, we’ve also put together a very complex business model. The model that we’ve created helps the company create a number of different forecasts. Their CFO can change variables to generate a wide range of potential results. This flexibility has already been used to forecast various changes to revenue streams or significant changes in costs or expenditures. The model also allows the company to forecast cash balances, loan balances as well as all the various aspects of the balance sheet. This also allows the company to plan for cash needs; a theme that I’ve written about before.
Get good professional help. Use that help prudently and save yourself money. An ounce of prevention really is worth a pound of cure…and it is much less expensive.