The CFO'S Perspective

Larry Breitbarth

Larry Breitbarth

Larry Breitbarth is an experienced financial executive with a proven track record in financial management, operational and strategic planning, performance improvement, corporate controllership, project management, and valuation consulting. He began his career as a business valuation consultant with Arthur Andersen in Chicago and served manufacturing and distribution clients in the automotive and food equipment sectors.

Recent Posts by Larry Breitbarth:

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

A CFO’s View on Insurance and Risk Management

Have you ever had a conversation that went something like this?

CEO: “So, do you have an update on our insurance?”

CFO: “Well, I have good news and bad news.”

CEO: “Bad news first, please. Always.”

CFO: “I took a look at The Company’s coverages and talked with our broker. The bad news is that our insurance bill is going up, way up.”

CEO (interrupting): “By how much? We’re kind of tight right now.”

CFO: “The premium increase will be almost 40% over last year. We might want to shop it. But the good news is…”

CEO (interrupting again):Let me guess - another invitation from the insurance broker to a charity golf event in the month of November?”

CFO: “Actually the good news is that this year we have identified some significant gaps in our coverage. We have the opportunity to close those gaps now to better protect The Company in the future from significant financial risk.”

CEO (looking unconvinced): “Oh?”

CFO: “With our new advisory board of directors, we will need D&O insurance. Also, the broker has been recommending cyber insurance for the last several years, but The Company continues to put off purchasing any kind of coverage in this area. I strongly recommend that we should cover ourselves in this area.”

Topics: Risk Management

How Your CFO Can Manage Supply Chain Disruptions

Import shipping from Asia has become a nightmare. According to McKinsey & Company, shipping costs for a 40-foot container have increased over five-fold in 2021, from $2,000 per container to $13,000. Container ships that finally arrive on the West Coast often have to wait offshore for a dock to open to offload their cargo. Once unloaded, containers can spend days or weeks in the Port of Los Angeles, Port of Long Beach, or Port of Seattle until rescued by a truck or intermodal train.

Topics: Trends Planning Manufacturing

PPP Loan Forgiveness – ‘To forgive or not to forgive, that is the question.’

In the case of a Small Business Administration Payroll Protection Program (“PPP”) loan, businesses have been presented with an opportunity to maintain their current employment levels and pay certain expenses with assistance from Uncle Sam, in the form of a loan. These loans carry a low-interest rate and up to five-year maturity.

Businesses can apply to have the loan treated as a grant; in which case the loan is forgiven.

This seems like an easy decision for the Chief Financial Officer. Ask for loan forgiveness and accept the gift. But would it ever make sense not to ask for forgiveness? Could the underlying economics of a long-term loan be almost as good as or even better than an immediate grant? The short answer is yes, but only under very specific circumstances. For most businesses, under most circumstances, and for most loan types, loan forgiveness is best.

Topics: PPP Debt Management

How a CFO can Increase the Long-Term Value of a Company

For business owners and executives working toward an exit from their company, a CFO who is skilled in the entire lifecycle of a business transaction is invaluable. An experienced CFO will take the steps needed to increase the value of the company. By focusing on the drivers that increase value today, the business will become worth more to a buyer in the long-run. As a result, the owners will be able to exit with more profits than those who take a short term or last-minute approach.

Topics: CFO CFO Responsibilities