(480) 397-0590

Want a Career?

Find a CFO

223 partners in 45 states
     6,755 years experience

Find a CFO by zip code

Find a CFO by name

Free Business Resource

Fill out the form and receive for FREE The Discovery Analysis (a $1600 value)





Privacy policy

Cold Steel and Other Things That No Longer Work

Feb 18, 2011

The US Army, in a series of measures aimed at improving troop fitness, has announced that traditional Bayonet Practice will be dropped, to provide time for more modern exercise and fitness regimes.  According to Wikipedia, the advent of modern warfare in the 20th century decreased the bayonet’s usefulness, and as early as the American Civil War in 1861 the bayonet was ultimately responsible for less than one percent of battlefield casualties.   So…it’s probably about time for the US Army to modify its training process.

In business, it is easy to see the same schlerotic approach to time-tested procedures that may no longer have a place in the modern world.  It is sometimes easier to carry on doing things, even when more modern, more efficient or cheaper ways of doing things have evolved.  My favorite list of activities that are, at least worth a review are:

Payroll – QuickBooks may “make it easy” but it’s generally a waste of clerical effort to do it in-house.  Payroll is complex and often confusing, carries high risks if nor done correctly,  is usually delegated to a low level accounting employee, but it can be outsourced at minimal cost to a range of companies competing for your business. 

In House HR – There are various HR options available from PEOs, ASOs and other outsourcing organizations.  Sometimes they can save signicantly on insurance costs through their bulk purchasing power, but they may also be very useful to mitigate labor risks.

Technology Management – many companies delegate IT management to “Billy Bob” because he is good with autos and really great with video games.  Today’s complex and ever changing IT environment requires a combination of skills that are not generally found in your average $20 an hour employee – or for that matter your $250 an hour executive who really should be focused on billable work.  Server management, firewalls, email directories, software updates and licenses, data back ups, web stores etc are simply too important not to treat as mission critical.  The costs of down-time, lost data or security breaches is incalculable.  Managed IT is a very competitive business, and such service companies can employ diverse staff with complex skill sets to manage your IT needs.  It’s worth getting a few quotes and seriously reviewing the cost / benefits of outsourcing.

Accounting Software – Many companies start off with QuickBooks and get very comfortable with its capabilities.  Unfortunately, this can lead to inertia and failure to plan for growth.  New cloud based and easy set up ERP systems are starting to offer a safe, cost-effective path to next generation accounting systems, and are worth exploring.

Exit Strategy – It’s a rare entrepreneur who has given much thought to an Exit Strategy.  A simple business sale may be costly, may fail and may damage business prospects if it goes wrong.  Exit Planning includes thinking about other options for Exit such as management  buyouts, employee shares, private equity purchases and taking the steps now to position the company as an attractive investment. 

Receivables Management – I am constantly seeing innovative ideas in this area.  Collections automation can include various payment mechanisms, automated collections notices, outsourced receivables management.  Funding has gone beyond traditional factoring with a number of new entities such as The Receivables Exchange, FTRANS etc that combine funding flexibility with management options.

Financial Management – Going beyond QuickBooks and a book-keeper, best of breed companies are exploring new options – such as part-time CFOs to introduce better financial management, being more pro-active about working capital, profitability, planning and cash management.

Space – Office space has never been more affordable, unless you are locked into a pre-recession lease.  At the same time the need for space has diminished significantly as options for employees to work out of the office have mushroomed.  I see many clients with huge offices, while most of their staff are on the road.  It’s worth considering a permanent downsize in space needs.

Leading edge business owners are constantly eliminating distractions and gearing up to deal with the challenges of faster change, global markets and fierce competition.  Maybe its time to review those business practices that are holding you back.

More from David Kirkup…

About the Author

David has over two and a half decades of business experience and is a proven financial management expert. Working in Europe and the USA, David has served as Divisional CFO at a number of Fortune 500 corporations: including Reuters, Marsh & McClennan, Zurich Insurance and ADP as well as numerous small and mid size companies. As part owner of a small software company, he was heavily involved in the marketing efforts and ultimate sale of the company. As CFO with a national PEO firm he dealt with the credit and financial issues facing hundreds of small business clients. David also spent 5 years in Bermuda managing captive insurance companies.

View David’s Personal Website

Books


A collection of books from B2B CFO® to help any business succeed. Read the first chapter from books, including the Wall Street Journal’s book, for free.

Zoom in using the +/- tools on the left. Click on each photo for more details.