Part Time CFO Services - Apr 26, 2010

Posted by: Bill Moore in Articles

What does a CFO do and how can a part-time CFO serve the needs of a business owner?  Many of the day-to-day responsibilities of a full time CFO are executive management responsibilities that overlap with the other executives in the company.  Any great team has outstanding role players that can also fulfill the other roles as needed.  However, the specific financial discipline and skills a CFO brings to the table are specialized and can distract other executives from their roles in running a business.  Even a CEO or business owner that had been the CFO needs to have another financial executive assume the CFO role to keep the CEO or business owner focused on growing the business.  I had been a CEO without adequate CFO support and spent too much time away from managing and growing the business while I prepared financial reports, monitored cash flow, and other financial analytics.

A listing of our firm's CFO Services is available elsewhere on our firm's website.  I will describe each of these services in subsequent entries, but want to summarize the services and our approach here.

The foundation for CFO services is timely and accurate financial statements.  Without this foundation, all other financial data and any business decisions made will be based on old or incorrect data.  Many business owners have a good sense of their business and make decisions based on their "gut", which is fine for their personal risk tolerance level.  However, once a company has a banking relationship, the owner's gut is generally not sufficient, although their other financial resources may be.  You will have a better relationship with your bank with good internal financial statements and they will be more likely to support your requests.

The financial skills a CFO may be best known for include Financial & Strategic Planning, Cash Flow Projections, Profit Improvement, Expense Reduction, Working Capital Improvement, and Gross Profit Optimization.  These skills and activities are crucial to the livelihood of any business.  A CFO fills the gap between the business owner and the Controller or Accountant that prepares the books and records.  A business owner often likes to work in the financial details to stay in touch with the financials, however this takes time away from growing the business or family activities, and the business can often begin to lose momentum which causes the owner to dive even further into the details to fix the problem.  This is the problem described in our firm's book The Danger Zone.  By keeping the CEO focused on "finding" activities instead of "minding" ones, the company can profitably Increase Sales.

Finally, every business owner will eventually leave their business.  The coming years will see many baby-boomers want to exit or sell their businesses and retire.  The current economic cycle has deferred many retirements.  When the market does recover, more businesses will come on the market to be sold, which will further depress prices for exiting business owners.  Our Finding The Exit program will help to define the goals, activities, and options for exiting the business, which may not necessarily mean selling the business.

Top 5 Cash Flow Rules For Entrepreneurs - Feb 9, 2009

Posted by: Bill Moore in Articles

(* When it comes to cash flow, there's no time for a Top 10 list!)

Why do you need to concentrate on Cash Flow? Simply put, especially for a small to mid-sized business, cash flow equals life, growth, prosperity . . . and survival.

You need to free yourself to focus your unique talents and abilities on growing your business rather than fighting the constant cash flow fires. Remember . . . you are the only one who really cares about the ongoing viability of your company. It's your future that you are most concerned about because, if your company is not successful, none of your employees will have a job.

Here are the Top 5 Cash Flow Rules you can implement immediately that will transform the way you manage your business from this point forward. But first, remember the two cardinal rules of managing a business:

• Never run out of cash. Make the commitment to do what it takes so that it does not happen to you.
• Cash Is King. Cash is what keeps your business alive. Manage it with the attention it deserves. Without cash, you have no business.

Now, the Top 5 Rules . . .

1. Know the cash balance right now. Even the most intelligent and experienced person will fail if they are making business decisions using inaccurate or incomplete cash balances.

2. Do today's work today. The key to keeping an accurate cash balance in your accounting system is to do today's work today. When you do this, you will have the numbers you need-when you need them.

3. Either you do the work or have someone else do it. Either you do the work or have someone else do it-those are the only two choices you have. The work must be done. So, either you do it or have someone else do it. (See Rule 3a.)

• 3a. If you are doing the work of determining the cash balance, you may not have the right people working for you. Unless you are a start-up business without any accounting staff, you must be sure that the financial people know that you need and demand that they focus their efforts on monitoring the cash balance, and keep you aware of what's happening with your cash.

4. You absolutely, positively must have cash flow projections. Cash flow projections are the key to making wise and profitable business decisions. It's impossible to run your business properly without them.

5. Eliminate your cash flow worries so you are free to do what you do best-take care of customers and make more money. This is the real key to your success in business. The reason you have to make sure you have the cash flow of your business under control is so you are free to focus all your time and talents where you can make the most difference in your business.

B2B CFO specializes in helping business owners manage their cash flow. Give me a call at 781-640-6057 for your free Phase I analysis of your business. It's a call worth making.

(877) 4-B2BCFO

info@b2bcfo.com

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