The CFO'S Perspective

Understanding the Importance of Financial Modeling: Should You Build a 3-Year Model?

“How do you build a three-year financial model?” It’s a question we get (and answer) a lot.

A financial model is a type of financial projection that pulls together important data to allow organizations to analyze their current financial position and predict their future financial position. While effective financial modeling takes significant time and expertise to complete, the considerable benefits provided make it well worth the investment. Financial modeling is an essential tool used to manage risk, allocate resources, make smart investments, secure funding, and develop long-term growth strategies.

Some projections are over a longer time horizon while others only cover a short time horizon. However, whether your financial model covers two, three, five, or ten years, it’s important to understand what it should accomplish, why you should do one, and what it should include. Find out now why you need financial modeling and how to build a financial model for your organization that will offer the insights needed to make key strategic decisions.

Topics: Finance Trends Planning Financial Projections Risk Management

How Nonprofits are Using Technology to Grow in a New Age

As in any industry these days, technology utilization in nonprofit organizations is on the rise. Nonprofits are using technology to shape everything from how they communicate to how they fulfill their missions with greater efficiency and effectiveness than ever before.

In a Harvard Business Review article on the smart tech transformation occurring in nonprofits, Allison Fine and Beth Kanter summarize,

“The use of smart tech by social service agencies and other nonprofits exploded during the pandemic. For example, food banks deployed robots to pack meals; homeless services agencies used chatbots to give legal and mental health advice; and fundraising departments turned to AI-powered software to identify potential donors. At many nonprofits, smart tech is becoming integrated into internal workflows, fundraising, communications, finance operations, and service delivery efforts, freeing up staff to focus on deeper societal changes that need to be made — such as addressing the root causes of homelessness in addition to serving homeless people. While smart tech helped scores of nonprofits to pivot to suddenly remote and digital delivery of programs and services at the start of the pandemic, it may also enable them to turn the page on an era of frantic busyness and scarcity mindsets to one in which nonprofit organizations have the time to think and plan — and even dream.”

Topics: Non Profit Organizations Trends Technology

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

Why Tech Skills are Essential for Today’s CFOs

Today’s top CFOs are vastly different than their predecessors because the CFO role itself has changed so dramatically over the last few decades. What used to be a strictly numbers-based executive financial role, has now evolved into a pivotal leadership position that touches numerous areas of the company including HR, IT, operations, manufacturing, sales, and marketing. And this sweeping change has ushered in a shift in what is expected of a CFO’s skillset as well.

The most salient difference is how today’s CFOs are required to utilize technology. CFOs are expected to be well versed in technology options for streamlining operations, meeting business needs, informing strategic decision making, and maximizing growth. As a result, tech proficiency has become the single most newly sought after skill when hiring a new CFO.

Topics: Recruiting Trends CFO Hiring CFO Responsibilities

Overcoming Supply Chain Difficulties – a CFO’s Perspective

Rapid growth in the US economy and the lingering impact of the pandemic on global supply chains have created problems for almost every industry.

The construction industry has been impacted by shortages of certain glues used to make composite building products leading to escalating construction costs and lengthy project delays.

The automotive industry has been impacted by the well-publicized shortage of computer chips, which is caused by the shortage of chip manufacturing capacity. Underlying causes include shortages of certain critical raw materials and a very small number of chip manufacturing equipment manufacturers.

Even restaurants have been hit with shortages of food containers for to-go orders because of shortages of natural gas feedstock for container manufacturers.

Nearly every business has been beset by delays in the delivery of everyday supplies that can be traced to a shortage of workers in the transportation and distribution industries.

There aren’t enough workers to load trucks at the warehouses or drive them down the highways. If essential supplies are available, they are likely to be higher-priced and available only with extended delivery dates.

Topics: Trends Supply Chain

The Great Resignation – The Accelerated Evolution of Work

A prospective consultant told me that he loved what he did during a recent interview. He had been working up the ranks for a long time, continually added skills and experience, and was in a place of high trust and value to his organization. He shared with me that he loved his profession had excellent skills but was not interested in working 70 hours a week at this point in his life and career. He asked, "Were there other options?"

Topics: Trends Change 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

How Do I get My Accountant to Come Back to the Office?

Employers that want their employees back in the office again are asking themselves the question, “How do I get my employees to return to work?” However, many employees are asking their employers, “Why should I return to work?” in response.

The resulting dichotomy has created a sticky situation for companies that are facing labor shortages and revenue challenges well over a year and a half into this crisis. For key departments like accounting and finance, the pressure is further elevated because these kinds of skilled roles are a hot commodity right now, making them even harder to replace.

Topics: Trends Staffing HR Leadership Change Management Transition COVID-19