The CFO'S Perspective

What if Tomorrow is Not Like Today? Part II: Preparing for Disasters at Work

Most of us believe we are prepared for the everyday kind of disaster at work:  We carry extra cash, safety pins, and a cell phone.  We keep a granola bar (or five) in our desk.  In Seattle, we never, ever, let the coffee pot run out. But while all these things are good (especially the coffee pot), most of us never think about what we would do if a true disaster struck during the time we are at work -- the place/s where we spend more waking hours than anywhere else.   

Let's take the case of an earthquake, since that's our most likely Puget Sound area disaster, and the basic things to prepare for if one occurs during our workday apply to many other scenarios as well.  

Topics: Planning Financial Projections Forecasting

How to Close a Business Successfully

I have not failed. I've just found 10,000 ways that won't work.
- Thomas A. Edison

For whatever reason, you've determined that it's time to close the doors and walk away from your business. Shutting down your business may be the hardest thing you'll ever do, but it's not uncommon. In fact, 90 percent of start-ups and early-stage companies close each year in the U.S.

If it's any consolation, most successful entrepreneurs have failed previously at some venture - or several. Walt Disney was reportedly fired by a newspaper editor for having no imagination and lacking good ideas.

Currently the world's richest businessman, Jeff Bezos had several failed ideas before Amazon took off. Most notably, his auction business called zShops never gained any traction. It's important to realize that it's okay to stop pursuing an enterprise that isn't working and start doing something else.

Closing a business, however, involves more than just shutting the doors and walking away. If you do this, you could open yourself up to unnecessary fees, loss of personal and business reputation, and even lawsuits. When making decisions about closing a business,  visibility to see issues coming is vital. Good financial advice is a great place to start.

Topics: Planning Budgeting Forecasting

When Accountants Became Firefighters

There are times in the course of a career when an accountant faces difficult short-term circumstances calling for quick decisions and a focus on critical priorities.  In other words, the “fire” calls the shots, and the accountant must respond to the fire’s breadth and intensity. The ability to successfully manage the proverbial fire is based on skill and effort within an undetermined period.

Topics: Funding Success Stories Planning Accounts Receivable Financial Reports Audit

Planning for Next Year's Raises in Today's Competitive Business Environment

With full nationwide employment, pricing pressure on materials, and generally modest revenue growth, how do you plan or budget raises for your employees? As you create next year's budgets and update your strategic plans, you also need to take several vital steps.

These include looking at the big picture, understanding and limiting your risk, getting help if you need it, and utilizing a financial planning tool to provide the right raises to retain and attract talent.  This may seem like a tall order, but a systematic approach will help your organization achieve its staffing and budget goals.

Topics: Planning HR Budgeting Salaries

How Much Cash Should a Nonprofit Have in Reserves?

An 84-year-old resident of Longview passed away this year, leaving $750,000 of her estate to three local non-profits. Relying on these types of unexpected donations is one way to build up your organization's reserves, but you can't count on these generous gifts.

Case in point is the Anacortes-based conservation nonprofit Pacific Biodiversity Institute, which just closed its doors due to a lack of funding. Whether flush with funds or struggling to keep the lights on, there’s never enough funding for a nonprofit to accomplish every initiative it would like.

Every organization needs to determine how much it requires for Operations, in Operating Reserves, and what can be dedicated to mission-focused initiatives. The answers to these questions are, of course, “It depends.”

The variables that must be considered include seasonality, worst case scenarios, and more. The key to developing a specific answer is knowledge - knowledge of the organization’s current financial state and donation history, as well as the data that is produced from a solid budget and cash forecast.

For those organizations that struggle, a plan must be developed to raise donations and reduce expenses. If you are fortunate enough to have a surplus of reserves additional questions arise. Where do you put those reserves? How should you safely manage them? While the answers vary from nonprofit to nonprofit, there are a solid set of financial best practices to follow and ensure that these questions are answered.

Topics: Non Profit Organizations Planning Cash Flow