The CFO'S Perspective

For many owners of growing companies, the choice of a bank is a crucial decision.  A solid relationship with a bank can make or break a company.  Banks provide relatively cheap capital to fund expansion as well as the everyday transactional and payment services that enable everyday operations. 

A poor relationship with your bank can hinder growth plans and even put you out of business.  Still, many business owners simply stumble into doing business with a bank because of convenience or with the mistaken assumption that all banks are all the same.  A wise business owner puts effort into developing and maintaining a relationship with their bank, just like they do with key customers and suppliers, to ensure their long term success. 

Whether you are in retail, the supply chain, or are a manufacturer you have inventory. Ensuring that your inventory is “fresh” is a key to achieving profitability. Obsolete inventory can adversely impact your bottom line.  Today we are discussing how to analyze the various inventory phases to eliminate or reduce your obsolete inventory.

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.

Businesses around the Northwest say their number one challenge is finding and retaining employees. For a business with an existing team, it is vital for them to retain their employees and increase engagement.

Not only are the costs of finding, hiring, and training new employees (if you can find them) high, a team of passionate employees often leads job seekers to your company. Investing in the happiness of your existing team will generate a big return on your investment.

If you're a business owner or CEO, you need some kind of financial guidance. Maybe you create addicting video games for smartphones, run a local real estate agency, or are a health services provider. No matter what your trade involves, being in business can be a challenge.

But unless you run a CPA firm, you probably didn't go into business to stare at numbers and comply with financial regulations. These are often perceived as a pain, but they are a necessary piece of any successful endeavor. Hopefully, you already have some help in this regard.

Unfortunately, hiring financial help is often either an afterthought or a hastily made decision, and you don't get the guidance you need and deserve. Even worse, your business meanders down the wrong path and ends up being just another scary statistic.

A successful business needs not only financial assistance but also guidance that is effective. On the one hand, you might just have the wrong accountant in your corner, but there's also a chance that your company needs something more.

In the early days of your business, you might have managed your books single handedly or hired an outside accountant to take a peek at regular intervals. As you scale and grow your business, your financial management needs expand as well.

One of the keys to success in just about any sector is strong financial planning and management. This requires taking more than just a backward glance at what just happened during the past month, quarter, or year.

While a full-time bookkeeper can give you some of the controls you require, the truth is that you will need to dedicate more resources to the sound financial management of your business. So, just what is financial management, and where do you begin?

Here are some common questions and answers about key financial processes as they relate to your business.

Why Audits Matter

For many middle market, closely-held businesses, the annual independent financial statement audit is an important part of the financial reporting process.

Lenders, investors and the company’s board of directors rely on audited financials to validate the interim financial data they are receiving as well as provide a sense of security as to the assets they have at risk.

As a result, many loan and shareholder agreements require annual audited financials.

In the best run businesses, the audited results should not differ from the unaudited internal financials.

That’s because the finance and accounting team is closing the monthly books on an accurate and timely basis. The team is also staying abreast of potential accounting issues that may need to be dealt with before year end.

In many businesses, incentive compensation plans may be tied to audited results.

This means that a well-managed company can ill afford to provide the management team with financial data subject to significant audit adjustments. Accordingly, it is in everyone’s best interests that the audit be conducted in an effective and efficient manner.

Change comes more from managing the journey than from announcing the destination.”  -  William Bridges

Change can be hard to navigate under the best of circumstances. When things aren't right within the financial arena, it can unknowingly create a delicate situation. CEOs should tread lightly, and yet, must still be effective leaders.

The inclination of many CEOs is to assume that because financial teams tend to be more analytical than, for instance, a marketing team, they can make changes without understanding the potential ramifications. This may not be the case. Here are some best practices for navigating change in your financial waters.