The CFO'S Perspective

Take a second to think about your company’s key personnel - your CEO, CFO, CIO, Controller, etc. Consider everything they bring to the table and the responsibilities they hold as well as the knowledge they’ve accumulated about your business and industry. Now, imagine that they suddenly disappear.

Being prepared for an economic downturn is fundamentally good advice. The economy is cyclical and eventually there will be a downturn of some sort. Preparation ultimately boils down to two basic business disciplines.

This article is specifically focused on the issues and problems that a significant sales increase (30% plus increase due to activities such as a new product line, a new distribution channel, or a major new customer) can have on the existing organization that could potentially offset the gains from the increased sales if not properly addressed or anticipated.

When there is such a profound change in an organization due to significant growth, there are many ways this anticipated windfall can turn into an albatross and bring a company to its knees or reduce the anticipated benefit of profit.

I am taking an accountant’s approach to understand the impact of a significant increase in sales can have on an organization. I will take you through the components of an income statement and balance sheet to discuss how each line item can be adversely impacted by a seemingly windfall in sales and profits.

Employees are your greatest assets. They are the first line to your customers, the ones driving innovation, and have the ground-floor information you need to run your business. Likewise, those same employees rely on a stable income to meet their short-term financial and retirement goals. 

But, if an employee is unable to work due to disability or some other life event, everyone loses. And the unfortunate fact is that a majority of people believe this is something that will “never” happen to them. But, it does with stunning regularity.

To answer a question we receive frequently, we turned to our team of CFOs for their insights. We received plenty of feedback about whether a company needs a CFO with industry experience from the CFO Selections team.  The depth and diversity of experience in the CFO Selections team again proves to be an excellent resource.

Read a sample of perspectives from CFOs who have decades of experience:

As head of CFO Selections corporate philanthropy initiatives, the question I get most often, especially now at budget time, from other company executives is, “What is the right amount of money to budget for donations?”

Before answering this question, I usually ask,

What are you hoping to achieve with your corporate philanthropy?”

Organizations looking to outsource their financial needs often wonder who is best qualified to handle the intricacies of their business operations.

With the multitude of options available the landscape of potential financial solutions is vast. Factor in the solutions catered specifically towards SMBs, local businesses, privately-held businesses, and businesses in designated industries and the result is an overwhelming sea of possibilities. Within these choices are two distinctly different options – freelancers and firms.

Business owners tend to struggle with determining which type of provider will best suit their needs. Will a solopreneur or freelance CPA-CFO be sufficient? Or is a larger firm a better option?

Nick Anderson (Columbia Bank) recently invited Bill Palmer (CFO Selections) to be interviewed in a 4-video series. Nick and Bill had an in-depth conversation about the 3 P’s:

1. Finding the right Partner
2. Getting the right Products
3. Negotiating a fair Price.

The series was shared via LinkedIn but in case you missed it, we have the four-video series wrapped up into one.