The CFO'S Perspective

Understanding Nonprofit Reports & Reporting Best Practices

At any nonprofit organization reporting tells the story of what is happening and why. But reports are not simply a snapshot of where the organization is today. They are a critical piece of information to predict where the organization will be tomorrow.

All nonprofits do some combination of financial reporting, management reporting, and board reporting. Internally these reports help organizations manage risk, evaluate current efforts against performance objectives, make strategic operational decisions, and prepare for what is coming next. Externally these reports communicate with key stakeholders and rally supporters. As such, reporting is extremely important for any nonprofit organization.

Topics: Non Profit Organizations Financial Reports

Mastering Nonprofit Cash Flow Projections

For-profit companies understand the importance of cash flow projections because they are inextricably tied to their goal of generating ongoing revenue. Nonprofits, on the other hand, are not typically as “cash flow savvy.” Some only do cash flow projections when required as a grant application stipulation, while others do not do them at all. And of the organizations doing cash flow forecasts regularly, many do not truly understand what they should be getting out of the process.

Topics: Non Profit Organizations Cash Flow

The Pros and Cons of Creating an Endowment for a Non-Profit

Every so often, one of my non-profit clients will see a small windfall in unrestricted funds, such as a large gift or bequest, proceeds on the sale of an asset, or loan forgiveness. Wanting to protect funding for mission-driven programs into the future, some will start discussing the possibility of setting up an endowment. But this begs the question:

What exactly is an endowment, and are they always the best thing to do?"

Topics: Non Profit Organizations

Years of Lessons Learned as a Business Partner

It's hard to believe 20 years has gone by since CFO Selections was founded! It has been 16 years since merging a small search practice with CFO Selections. Time has gone by so quickly! It has been gratifying to make great friendships within the community, including my partners, consultants, clients, and fantastic trusted advisor community. To this day, I still get a thrill reading the business section of various publications and finding a company mentioned we assisted at some point in their growth.

Today I am sharing lessons learned as both a partner of CFO Selections as well as in the business development role. These are the keys to success I encourage all business owners and entrepreneurs to leverage on their business journey.

Topics: Leadership Personal Development About Us Company Culture

How to Improve Working Capital in Manufacturing Operations

Managing consistent working capital provides the resources needed to achieve organizational objectives and execute on the company’s strategic vision. In this way, working capital ensures business continuity for manufacturers and acts as a determiner of success. When cash is managed properly, a manufacturer will not only have the resources needed to keep operations running on schedule but also generate the long-term capital needed for major expenses like equipment replacement and facilities upgrades.

However, in a manufacturing setting, working capital is typically harder to manage than other industries. Manufacturing has a number of oddities that complicate their working capital formula and make management more challenging. Furthermore, inventory risks, high operating costs, reliance on manual processes, and frequent payment delays can all put strain on their working capital. The result is a perfect storm of cash flow management difficulties for manufacturers.

Topics: Cash Flow Manufacturing

Setting Prices to Increase Manufacturing Profits

In a keynote speech at the 2018 Manufacturing Finance Summit, Dr. Peter Colman, a global pricing strategy expert, explained that price is the strongest profit driver for manufacturers. The data he cited showed that a 5% increase in price results in a 33% increase in operating income, whereas a 5% increase in volume only results in a 20% increase in operating income.

The message here is clear: selling smarter is better than selling more.

And while many things have changed for manufacturers in the years since, this wisdom has not. Pricing remains critical for manufacturers as a leading revenue driver.

Topics: Manufacturing Profit Margin

PODCAST: Mastering Your Financial Acumen as a Nonprofit Leader (Kevin Briscoe)

Is your organization positioned to navigate the unique strategic and financial challenges inherent in nonprofit settings? As a nonprofit leader, do you need more financial expertise but don’t know if you can afford it?

Topics: Non Profit Organizations Leadership

Syncing Product Development and Finance in Manufacturing

Without products to sell a manufacturer cannot exist. But without products that sell profitably, it will not stay in business. This is where product development and finance intersect.

Strong financial leadership will ensure that the products being developed are right for the market, priced correctly, and attracting key customers. In an ideal scenario, it looks something like this:

  1. Finance will provide the data required to make product decisions
  2. Product development will use that information to shape product features and functionality
  3. Finance will close the loop by analyzing company performance across the current product mix

This process should be cyclical, with a steady flow of communication between both groups to ensure that the company is constantly evaluating profitability to make strategic revenue decisions. As the head of finance, the CFO should spearhead these efforts.

Topics: Manufacturing