The CFO'S Perspective

Cash Management Strategies: Selling Accounts Receivable

With government assistance waning, business owners are evaluating other ways to improve cash flow.

Since slow-paying clients are one of the biggest killers of cash flow, some companies choose to sell their invoices to recoup some of that missing revenue more quickly. This strategy, known as invoice factoring, is a way for companies to get an infusion of cash from the products they have already sold or services they have already performed from a third-party that is willing to advance them the funds before customers pay.

Alternatively, companies that do not want to sell their invoices, and may not want, or can’t, pursue a line of credit with a traditional business bank, can borrow money against their invoices from a specialty lender. This strategy, known as invoice financing, not only improves cash flow but can also serve as a means of borrowing for businesses that cannot readily obtain other lines of credit.

Each strategy has differences to consider. Find out more about invoice factoring and invoice financing to determine which approach is right for your business.

Topics: Cash Flow Accounts Receivable Budgeting Financing COVID-19

Evaluating the Cost of Hiring a CFO

Most business owners I speak to look at finance and accounting personnel as an overhead cost. While they are most certainly a cost, the benefits that a CFO brings can alter that “cost” narrative into one of “investment.” Today I will help you define a CFO's role as one who is viewing your organization in a forward-looking manner and how they can be a good investment.

Topics: Recruiting CFO CFO Responsibilities Interim CFO

Demystifying the Single Audit for Nonprofits

In a year of uncertainties and change, the prospect of a Single Audit for the first time may seem daunting. Many nonprofits are facing this for the first time with influx of federal funds and you should rest assured that your organization has not been singled out. Here at CFO Selections we want to empower you by helping you to understand what Single Audit is, what it covers and how to prepare.

Topics: Non Profit Organizations Audit

Mastering the Budget Reforecasting Process

Budgeting and strategic forecasting creates a business roadmap to maintain stability and achieve growth. However, for forecasting to be accurate it needs to be modified when significant changes occur either internally or externally. This is especially important to consider this year, as supply chain disruptions and changing business regulations have drastically changed corporate outlooks across the country.

If you understand now that there is a high likelihood of needing to undergo reforecasting next year, you will be better equipped to do so when the time comes. Kory Wagner explains, “Expecting your assumptions to last through an entire year is at best naïve and at worst detrimental to your business. Incorporating reforecasting into your regular budget process, as needed, will keep you on track and help you roll with the punches.”

Some companies are reforecasting-averse, so they shorten their budgeting cycles from annual or semi-annual to quarterly or monthly to reduce their chances of needing to do so. But if 2020 has taught us anything it is that every company should be prepared to reforecast as needed because it could become a necessity at any time.

So, this year as you finalize budgets and forecasts, take the approach of “planning to re-plan.”

Topics: Data Analysis Financial Projections Budgeting Forecasting Strategy

Responding to the Pandemic – What Should CEOs and CFOs be doing Now?

Who thought 2020 would be like this? We have made it through the lockdown, subsequent economic shock, and the scramble to put it back on track. Stimulus programs (like PPP) are done rolling out and payment deferral programs from lenders are ending soon. More tailored lockdowns are underway but with no certainty this time of any government support for impacted businesses.

You have stabilized the ship. What do you do next?

The COVID-19 impact is not going to be over soon. “Normal life” is likely at least a year away. Even if a vaccine arrives in 2021, it will likely take many months to become ubiquitous and effective.

Topics: Planning