The CFO'S Perspective

Hiring a CFO – Do You Need the Tortoise or the Hare?

Aesop’s fable about the race between the tortoise and the hare provides a story to show how a race is not always for the swiftest. In the business world, some companies are very focused on short-term financial results while others are managing for the very long-term time horizon. Some companies are working to improve their operations and financial results in order to sell the business in a few years, while others are building a business for the next generation of owners.

When there is a need to hire a new CFO, the question the CEO and the owners should consider asking is: do I need a tortoise or a hare as my next CFO?

Topics: CFO Hiring Leadership CFO Responsibilities

The Guide to Buying or Selling a Business: Understanding What Kind of Finance and Accounting Support You Need to Get the Price You Want

Preparation and expert guidance are key for successful middle-market business acquisitions, sales, and mergers. In this comprehensive guide to buying and selling businesses, our expert CFOs provide all the finance and accounting information you need when entering into a transaction. It covers:

  • Transaction structures
  • Buyer analyses and considerations
  • Buy-side and sell-side finance/accounting transaction support
  • Buyer-side and seller-side due diligence
  • Business sale best practices

READY OR NOT?

Owners and CEOs of middle-market companies may encounter a business acquisition or divestiture opportunity without the benefit of prior transaction experience. Likewise, such organizations may be supported by a finance and accounting function that has not participated in the purchase or sale of a business. Yet, a first-time business buyer or seller must assess its level of preparedness for a transaction regardless.

While investment bankers and other advisors are well-positioned to initiate transactions, and provide guidance throughout the process, the company’s own management team – particularly in the area of finance and accounting – may need to be augmented by additional deal-experienced resources.

The assessment by a first-time buyer or seller of the transaction-readiness of its finance and accounting resources is an important step toward achieving the objective of accelerating the completion of a transaction while minimizing the disruption of the underlying business.

Topics: Mergers and Acquisitions

What is The Difference Between COGS and SG&A from a Chief Financial Officer’s Perspective?

As fractional CFOs (Chief Operating Officers) we get a lot of questions about COGS (Cost of Goods Sold) and SG&A expenses from our clients. They want to know how to classify different types of expenses, which one to focus on when trying to control costs, how to think about them when evaluating business opportunities, and what kind of impact each can have on profitability. As such, their questions often span the two interconnected worlds of accounting and finance.

From an accounting perspective, categorizing expenses correctly helps to ensure regulatory compliance and aids in ongoing cash flow management. While from a finance perspective, understanding their impact on revenue growth allows for effective long-term financial management. For these reasons, having a firm handle on the difference between SG&A and COGS is a critical component to running any business.

Topics: Accounting Planning Financial Projections Cash Flow Growth Forecasting Expenses

Artificial Intelligence – Bane or Boon to the CFO?

As CFOs, we have a full plate of responsibilities for financial reporting, planning and analysis, and risk management. We’re often skeptical of “breakthroughs” that promise to “transform the finance function” and “shift the paradigm of accounting and finance.” To us, these types of phrases just sound like more of the same – another overhyped management consulting fad based on a Harvard Business Review article. All we hear is just “blah, blah, blah” and we tune it out.

Should we feel that way about the current wave of Artificial Intelligence as well?

The name itself suggests, AI is a technologically derived intelligence. But AI models mostly just repeat what they have been taught. They don’t really “know” things or think like people do. When truly original “thinking” is required – such as creating an original, testable scientific hypothesis – it turns out that current AI models are quite dumb.

Looking at it through this lens, is AI a bane or boon to today’s CFOs?

Topics: CFO Artificial Intelligence

Accounting Turnover: Why is it Happening and How do we Stop It?

Having a hard time finding talented accountants for your business? That’s no surprise. I see news headlines every day that indicate many businesses are struggling with this hiring challenge. Here are just a few:

The reasons for today’s accounting shortage are well-documented, and include:

  • A changing educational landscape
  • Competition from other fields
  • Increased demand
  • Work-life balance concerns
  • An aging workforce with fewer younger entrants

While there is a lot of press around the shortage of accountants and challenges in finding accounting talent, I think it’s important to consider why accountants are leaving their jobs and strategies to retain key accounting talent.

Let’s answer the question, “Why is there so much turnover in accounting these days?” …and more importantly, “How do we stop it?”

Topics: Recruiting Accounting Hiring Staffing

Integrity in Finance – Why Establishing Trust Matters

“If you have integrity, nothing else matters. If you don’t have integrity, nothing else matters.”
- Alan K. Simpson

Originally published: 6/30/2021
Updated: 5/10/2024

Integrity in finance should be the foundation of a lasting bond between a business and its clients. Everyone wants to believe the promises that a company makes to them with respect to safeguarding their interests. But how many organizations can follow through on those promises? 

In an ideal world, we would have absolute trust in our financial institutions, advisors, and government regulators. Unfortunately, history and public sentiment tell us a different story. Sure, ethics and integrity still exist in finance. And those organizations are the ones that will consistently find success. 

Topics: Leadership Company Culture Integrity

Book Review – The 36-Hour Day

Here at CFO Selections, we are always in pursuit of the knowledge needed to continue growing personally as well as professionally. We are constantly reading, watching, and listening to resources across many different topics as well as discussing what we are learning along the way. Our goal is to foster a culture of continuous learning in ways that transcend our roles in the office. In keeping with that spirit, we periodically spotlight books our team members are reading.

In today’s CFO Selections book review and share, Jen Girard is highlighting The 36-Hour Day – a book that she has not only read recently but has also been living for almost a year as she journeys through her father’s memory loss. We hope that you will find the memory care tips that she shares here not only helpful but also inspirational if you are in a similar situation.

Topics: Book Review Personal Development About Us

Your Budget is Wrong… and That’s Okay!

The first thing you need to know when creating a budget is that it is wrong from the start.

In the world of accounting and finance, we like things to be precise and tie out neatly. A budget, on the other hand, is meant to be a predictive tool and a roadmap to help you get to where you are going.

When you enter an address into your GPS, you often get three to four different routes you can take to get to your destination. Sometimes the route has construction or other traffic impediments along the way. Think of a budget somewhat the same way. You build assumptions that you can change based on the route you decide to take and the detours you may face along the way.

Topics: Planning Financial Projections Budgeting