The CFO'S Perspective

The Risk of Increased Sales Growth in Manufacturing

This article is specifically focused on the issues and problems that a significant sales increase (30% plus increase due to activities such as a new product line, a new distribution channel, or a major new customer) can have on the existing organization that could potentially offset the gains from the increased sales if not properly addressed or anticipated.

When there is such a profound change in an organization due to significant growth, there are many ways this anticipated windfall can turn into an albatross and bring a company to its knees or reduce the anticipated benefit of profit.

I am taking an accountant’s approach to understand the impact of a significant increase in sales can have on an organization. I will take you through the components of an income statement and balance sheet to discuss how each line item can be adversely impacted by a seemingly windfall in sales and profits.

Topics: Planning Manufacturing

4 Essentials When Conducting Due Diligence on a Prospective Client

 

Business owners find due diligence daunting because of the cost and time required to do it effectively. They worry that the conversation with potential clients will be awkward to initiate and the process difficult to execute, lengthening the buying cycle. Furthermore, they fret about the risk of losing prospects from their sales pipelines, reducing overall conversion rates. However, the benefits far outweigh the risks of doing due diligence.

Topics: Risk Management Due Diligence

Does it Make Good Business Sense to Provide Extended Employee Benefits?

Employees are your greatest assets. They are the first line to your customers, the ones driving innovation, and have the ground-floor information you need to run your business. Likewise, those same employees rely on a stable income to meet their short-term financial and retirement goals. 

But, if an employee is unable to work due to disability or some other life event, everyone loses. And the unfortunate fact is that a majority of people believe this is something that will “never” happen to them. But, it does with stunning regularity.

Topics: Planning HR Budgeting

The Cash Flow Statement – The Forgotten Financial Statement

The Perks of Being Royalty

One of the best things about being the sole owner of a privately held company is that you have a great deal of discretion as to how your business is operated.  You get to make the rules.  It’s like being the King or Queen.

This includes deciding on the form and content of the financial information your accounting staff prepares. Particularly if you have no debt or outside investors, you can decide what you want to see and how often you want to see it.

Topics: Cash Flow Financial Reports

Spotlight on Remarkable: Fran’s Chocolates – From an Idea to the White House

Chocolate is for sale everywhere. Consumers can purchase it ready to eat at their local grocery stores or over the internet. They can buy it in a variety of forms for use in creating their own culinary delights. They have a vast selection of price and quality from which to choose. 

So, what did it take for one more company making chocolates to achieve the impressive success of Fran’s Chocolates? What was so special about the confections that started as giveaways to customers buying other products to something that a President of the United States chose to give as gifts to visitors to the White House? 

Topics: Company Culture Company Spotlight Success Story