The CFO'S Perspective

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

What will Manufacturing Pay Increases Look like in 2023?

According to CFO Dive, next year US employers are planning the highest pay raises in 15 years. Overwhelmingly, the executives surveyed cited a tight labor market as their main driver, with 73% indicating that they would be increasing wages to attract and retain their labor force. However, with national wages expected to rise by an average of 4.1%, these pay raises still would not offset the recent drop in real earnings due to rising inflation.

While the national average for wage increases is expected to be around 4% next year, manufacturing is one vertical where pay increases have historically lagged behind the rest of the market’s growth due to stringent control over wages by management and pushback against rising wage trends. So, how much will manufacturers increase wages next year?

Topics: Manufacturing

Startup Fundraising - SAFEs vs. Convertible Notes

Raising capital for startups can be challenging. Every startup founder is sure their company will be the next unicorn. But lenders are understandably skeptical. After all, statistics prove that more than two-thirds of startups never deliver a positive return to investors. 

Assuming you have the right combination of “horses” (opportunities) and “jockeys” (business leaders), all you need is funding to move your venture in the right direction and race past the competition. 

Analogies aside, you need some cash for your early-stage startup. So, what are your options? Many of today’s business founders are choosing between SAFEs and Convertible Notes until they can grow the business enough to warrant a priced round. Here is what you need to know about these two startup fundraising options, including their main features and differences.

Why is it so hard to hire an accounting employee? A 20th-anniversary reflection

As CFO Selections celebrates its 20th anniversary of providing business owners with senior finance and accounting services, I want to help business owners and hiring managers understand the challenge faced in hiring accounting employees in 2022.

Unfortunately, this challenge is not going to disappear after this year. Today I will provide some ideas later to overcome the challenge, … but first, we must understand why we have this challenge.

Topics: Recruiting Hiring Staffing

The Habits of Highly Effective Manufacturing CFOs

Manufacturing CFOs are a unique breed. These financial leaders must not only encompass the typical traits of highly successful CFOs but also thrive in a quickly changing environment. The fast-paced, innovation-centric nature of manufacturing requires a distinct skillset from its leadership. As a result, even CFOs that thrive in other industries can find the role at a manufacturer more challenging because manufacturing has its own financial nuances and requires a commitment to continuous learning.

So, how do you find a CFO that will succeed in the role? Look for the following characteristics:

Topics: Manufacturing

How are Inflationary Pressures Affecting Manufacturers?

With US inflation rates rising rapidly small and large manufacturers alike are being affected by inflationary pressures in much the same way, although small manufacturers will undoubtedly feel the sting of rising inflation more deeply than their larger counterparts. These pressures are being further exacerbated by:

Knowing that a recession may be coming does not tell us when, why, or how it may occur. However, paired with dropping small business and consumer confidence, a looming recession is only going to worsen the effects of rising inflation rates on US manufacturers.

Topics: Economic Trends Manufacturing COVID-19

Is On-Site Necessary Anymore? Examining Today’s Most Effective Workforce Structure

When talking with colleagues these days it is common to hear people discussing the effectiveness of remote work, especially regarding consulting work. We hear partners and clients saying things like, “I just don’t think we can replicate the kind of interpersonal relationships we used to have virtually.” Yet, at the same time, we hear their employees expressing little desire ever to return to the office full-time, opting instead for fully remote or hybrid work arrangements. This dichotomy begs the question, “Which is better, in-person or remote?”

Topics: Trends Planning Leadership Company Culture

Faster or Better? How to Truly Improve your Accounting Processes

The last decade has seen an unparalleled push for greater efficiency. Increased automation across all business sectors has ushered in a focus on “faster” and “cheaper.” And while these are certainly important pursuits amidst rising labor and materials costs, they certainly should not be a company’s only focus. Chasing faster and cheaper almost always comes at the expense of “better,” which is a shame because “better” can actually go a long way in achieving both.

Topics: Accounting Bookkeeping Financial Process Accounting Software