What to expect from your CFO in the first 90 days

I had the unique opportunity in my career to work with businesses in different industries and of different sizes and ownership levels as a full-time CFO. Each business had different needs and complexities. The smallest business was a $15m educational training center and the largest was a manufacturer who generated over $200m in revenues.  The industries included alternative energy, retail and wholesale trade, macro-economic consulting services, marketing agencies, hospitality enterprises, internationally based service groups, among others.  Ownership levels were varied. Some were privately owned, and others were either publicly held or owned by private equity groups.

The one thing they had in common was a need for CFO leadership and guidance.  The differentiator was the actual amount of time they truly needed a CFO.  Most businesses under $50m can be easily supported with a fractional, outsourced CFO.  It really boils down the complexity of the business.

CEFO engages with businesses at all stages of development, revenue levels, and industries.  Solving critical pain points is our primary area of focus. Many of our engagements are long-term and fractional (part-time) in nature.  Some are for a defined period to solve a pressing issue, provide temporary leadership, or to assist with exit or acquisition opportunities.

The role of a CFO, whether full-time or fractional, is vital to the financial health and success of an organization. In the first 90 days, a CFO’s approach and actions can set the stage for long-term success and alignment with the organization’s goals. Here’s a breakdown of what to expect from a CFO during this crucial period:

  1. Deep Assessment: You can expect your CFO to conduct a thorough assessment of the current financial and operational landscape. This involves looking into staffing, financial systems, reporting mechanisms, internal controls, and processes.
  2. Clear Communication: The CFO should establish clear channels of communication with various departments, ensuring that there’s a flow of information that can aid decision-making.
  3. Setting Priorities: With insights from the assessment, the CFO should work closely with senior leadership, particularly the CEO, to define and prioritize short-term and long-term financial objectives.
  4. Stakeholder Engagement: Building relationships is key. By engaging with stakeholders, the CFO can better understand their needs, concerns, and insights, which will be invaluable in driving the organization’s financial strategy.
  5. Strategic Alignment: The CFO must ensure that the financial strategy aligns with the broader organizational goals. They should work closely with the CEO and other leaders to understand and enhance the company’s vision and mission.
  6. Team Evaluation: The CFO should evaluate the finance team’s capabilities, strengths, and areas of improvement. This might lead to training, restructuring, or hiring to fill any gaps.
  7. KPI Review: It’s crucial for the CFO to assess if the organization is tracking the right metrics. Key performance indicators (KPIs) should be relevant, actionable, measurable, and align with the company’s strategic goals.
  8. Financial Analysis: Your new CFO should be financially savvy and anxious to dive into the financial statements, internal management reports, and cash flow analysis to fully understand the current and historical trends. This will help identify any immediate potential financial risks or opportunities.
  9. Budgeting and Forecasting: The CFO should be very future focused. They should be diving into the budget and projections that are currently in existence. If lacking, or not available, he or she must start redefining the budgeting process, ensuring that the company is prepared for future challenges and opportunities.
  10. Actionable Plan: By the end of the 90 days, the CFO should have a clear, actionable financial plan that aligns with the company’s strategic objectives.

 

This first 90 days for a CFO, whether in-house or fractional, are pivotal. This period lays the foundation for the financial leadership and direction the CFO will provide. Regular check-ins, open communication, and collaboration between the CEO and CFO are the key to ensuring alignment and achieving the desired financial outcomes.

CEFO can help you determine the best fit:

  1. By assessing your current financial management needs: Understanding your pain points, challenges, and aspirations.
  2. Forecast future needs: Think about the direction in which your company is heading. Will you be entering new markets, launching new products, or considering mergers and acquisitions?
  3. Consider your budget: Determine what you can afford while ensuring you don’t compromise on the expertise required.
  4. Interview both full-time and fractional CFOs: Even if you’re leaning one way, understanding the value proposition from both sides can help solidify your decision.

 

Remember, the ultimate goal is to find the right financial leadership that supports your company’s growth, ensures compliance, and helps navigate challenges effectively. Whether that’s through a full-time or fractional CFO will depend on the unique needs and circumstances of your business.  To meet with one of our experienced CFO’s, please contact our office at 518.693.7446 or email Pat McGowan at PMcGowan@cefoadvisors.com or Amy Roman at ARoman@cefoadvisors.com.

Cost containment: An important health care benefits objective for businesses

As the Fed continues to do battle with inflation, and with fears of a recession not quite going away, companies have been keeping a close eye on the costs of their health insurance and pharmacy coverage. If you’re facing higher costs for health care benefits this year, it probably doesn’t come as a big surprise. According to the National Survey of Employer-Sponsored Health Plans, issued by HR consultant Mercer in 2022, U.S. employers anticipated a 5.6% rise in medical plan costs in 2023. The actual percentage may turn out to be even higher, which is why cost containment should be one of the primary objectives of your benefits strategy. 

Really get to know your workforce to succeed at cost containment, you’ve got to establish and maintain a deep familiarity with two things: 1) your workforce, and 2) the health care benefits marketplace. Starting with the first point, the optimal plan design depends on the size, demographics and needs of your workforce. Rather than relying on vendor-provided materials, actively manage communications with employees regarding their health care benefits. Determine which offerings are truly valued and which ones aren’t. If you haven’t already, explore the feasibility of a wellness program to promote healthier diet and lifestyle choices. Invest in employee education so your plan participants can make more cost-effective health care decisions. 

Many companies in recent years have turned to high-deductible health plans coupled with Health Savings Accounts to shift some of the cost burden to employees. As you study your plan design, keep in mind that good data matters. Business owners can apply analytics to just about everything these days — including health care coverage. Measure the financial impacts of gaps between benefits offered and those employees actually use. Then adjust your plan design appropriately to close these costly gaps.

Now let’s turn to the second critical thing that business owners and their leadership teams need to know about: the health care benefits marketplace. As you’re no doubt aware, it’s hardly a one-stop convenience store. Many companies engage a consultant to provide an independent return-on-investment analysis of an existing benefits package and suggest some cost-effective adjustments. Doing so will entail some expense, but an external expert’s perspective could help you save money in the long run. Another service a consultant may be able to provide is an audit of medical claims payments and pharmacy benefits management services. Mistakes happen — and fraud is always a possibility. By re-evaluating claims and pharmacy services, you can identify whether you’re losing money to inaccuracies or even wrongdoing. Regarding pharmacy benefits, as the old saying goes, “Everything is negotiable.” The next time your pharmacy coverage contract comes up for renewal, explore whether your existing vendor can give you a better deal and, if not, whether one of its competitors is a better fit. 

It’s doable … really Cost containment for health care benefits may seem like a Sisyphean task — that is, one both laborious and futile. But it’s not: Many businesses find ways to lower costs by streamlining benefits to eliminate wasteful spending and better fit employees’ needs.  

Could your business benefit from interim financial reporting?

Could your business benefit from interim financial reporting?

When many business owners see the term “financial reporting,” they immediately think of their year-end financial statements. And, indeed, properly prepared financial statements generated at least once a year are critical.

But engaging in other types of financial reporting more frequently may help your company stay better attuned to the nuances of running a business in today’s inflationary and competitive environment.

Spot trends and trouble

Just how often your company should engage in what’s often referred to as “interim” financial reporting depends on factors such as its size, industry and operational complexity. Nevertheless, monthly, quarterly and midyear financial reports can enable you to spot trends and get early warnings of potential trouble.

For example, you might compare year-to-date revenue for 2023 against your annual budget. If your business isn’t growing or achieving its goals, find out why. Perhaps you need to provide additional sales incentives or change your marketing strategy.

It’s also important to more closely track costs in light of the current level of inflation. If your business is starting to lose money, you might need to consider raising prices or cutting discretionary spending. You could, for instance, temporarily scale back on your hours of operation, reduce travel expenses or implement a hiring freeze.

Your balance sheet is important as well. Reviewing major categories of assets and liabilities can help you detect working capital problems before they spiral out of control. For example, a buildup of accounts receivable could signal troubles with collections. A low stock of key inventory items may foreshadow delayed shipments and customer complaints, signaling an urgent need to find alternative suppliers. Or, if your company is drawing heavily on its line of credit, your operations might not be generating sufficient cash flow.

Don’t panic

If interim financial reports do uncover inconsistencies, they may not indicate a major crisis. Some anomalies might be attributable to more informal accounting practices that are common during the calendar year. Typically, either your accounting staff or CPA can correct these items before year-end financial statements are issued.

For instance, some controllers might liberally interpret period “cutoffs” or use subjective estimates for certain account balances and expenses. In addition, interim financial reports typically exclude costly year-end expenses, such as profit sharing and shareholder bonuses. The interim reports, therefore, tend to paint a rosier picture of a company’s performance than its full year-end financial statements.

Furthermore, many companies perform time-consuming physical inventory counts exclusively at year end. So, the inventory amount shown on the interim balance sheet might be based solely on computer inventory schedules or, in some instances, management’s estimate using historic gross margins.

Similarly, accounts receivable may be overstated because overworked finance managers might lack the time or personnel to adequately evaluate whether the interim balance contains any bad debts.

Glean more insights

Many business owners have had an “aha moment” or two when studying their year-end financial statements. Why not glean those insights more often? We can help you decide how frequently to engage in interim financial reporting and assist you in designing the reports that provide the information you need.

 

Amy Roman Joins Wellspring Board

On January 26, 2023, Wellspring announced the addition of six new members to its Board of Directors, including Amy Roman, Cynthia Minuti, Ryan Shaw, Jessica Niles, Deann Devitt, and Julia Marco. These individuals come from diverse professional backgrounds and bring years of experience in a variety of careers, as well as considerable non-profit Board experience, to Wellspring. As Wellspring expands its offering of programs and services for survivors of domestic violence and sexual assault and seeks to continue growing its impact in the community, CEO Maggie Fronk believes that the new Board members will help energize Wellspring to accomplish exciting things this year.

Amy Roman, a New York Certified Public Accountant and founder and owner of Strategic CFO Resources LLC, d/b/a CEFO Advisors, has a passion for helping others and desire to spread awareness about Wellspring’s work.
“I really want to become an advocate of Wellspring’s cause and help spread the word that there is help for those who have suffered through abuse,“ Amy said in the release.

The new Board members have a passion for helping others and a drive to improve the community by addressing the complex issue of relationship violence. Each brings unique skills and experiences to the Board, from accounting and finance to creative outreach and marketing. Together with the existing members of Wellspring’s Board, they will work towards achieving the agency’s goals for the year ahead.

For more information on Wellspring, and to read the full article from the Saratogian, visit this link.

Sailing and Business: What it takes to stay afloat

In the mid 1980s at Urbach Kahn & Werlin (now UHY), Eli Werlin used sailing and boat metaphors to describe business and the importance of having employees who support business with a stable base (the hull) and with driving business and supporting growth (the sails).

I had initially assumed I’d always be the hull. Today, I believe I’ve become a bit of both.

We still use many of the same metaphors to describe situations that happen in business today. Mr. Werlin’s words have stuck with me throughout my career.

        “When conditions change, a savvy captain will react accordingly.
          Usually, it means tacking to change the position of the sails.
          And it means risk-taking.
          So, sailing is a great metaphor for business. Entrepreneurs, of course, face turbulence, too.”
        – Biz Coach | Why Sailing Is the Best Metaphor for Business Solutions

Like sailing, businesses need to be prepared for course-correction. In both, staying afloat means keeping an open mind, staying agile, assessing risk and evolving quickly for any changes in the environment.

I only knew Mr. Werlin for a short few years before he passed, but he had an impact on me and my on my family. My dad used to run a hotdog cart for him in Lake George when he was just 16 years old. Even early on, Mr. Werlin was supporting small business and our community.

I wonder if he knew how impactful his words would be to those he mentored early on in their careers?

CEFO Advisors Welcomes Theodore Rydzewski, Jr. as a Client CFO

CEFO Advisors is excited to welcome Theodore (Ted) Rydzewski, Jr. to the team as a Client CFO. Ted joins us with over 30 years of accounting/finance experience, primarily in the manufacturing and construction fields.

“I joined CEFO Advisors to work with different companies in the Capital District area and provide financial leadership to help them meet their goals.”, Ted said.

Ted will be working as a CFO where he will be overseeing the finances of his clients. His goal is to expand his accounting and finance knowledge in areas beyond manufacturing and construction.

In his free time, Ted likes to exercise and cook. He also enjoys running, biking, playing basketball and doing Tai Chi.

Stay updated on CEFO Advisors and follow us on LinkedIn: https://www.linkedin.com/company/cefo-advisors/.

CEFO Advisors Welcomes Lisa Mnieckowski to the Team as a Client Controller

CEFO Advisors is excited to announce Lisa Mnieckowski has joined the team as a Client Controller. Lisa brings over 20 years of experience in several industries, including healthcare and technology. She’s worked with large publicly traded companies to small entrepreneurial ones. Her experience has taught her that for a company to be successful, a strong team is needed that will foster a professional work environment with great communication and transparency.

Lisa says, “I was looking to find a company that offers a professional culture and that values and respects its employees. I have found that at CEFO Advisors.”

Lisa will be working as a Client Controller where she will help clients achieve their financial goals while overseeing their daily accounting operations. Her goals include firmly re-establishing her management-level credentials and learning about new industries in which she has not previously worked.

In her free time, Lisa and her family have spent the last 10 years on a quest to visit all 63 US National Parks; a goal they accomplished this summer! She also enjoys genealogy, reading and gardening.

Stay updated on CEFO Advisors and follow us on LinkedIn: https://www.linkedin.com/company/cefo-advisors/.

CEFO Advisors Welcomes Patrick (Pat) McGowan as a Client CFO

CEFO Advisors is excited to announce that Patrick (Pat) McGowan has joined the team as a Client CFO. Pat joins us with 20 years of CFO/Senior Finance Executive experience. He’s had the opportunity to work in various industries ranging from Software to Theme Parks.

“I joined CEFO for the opportunity to be able to work in multiple industries.”, Pat said.

Pat is working as a CFO where he is overseeing the finances of five different companies. His goal is to help small businesses achieve better results by improving their financial, planning and analysis functions.

In his free time, Pat enjoys seeing live music. He is a season lawn pass holder at SPAC and has been to over 10 concerts so far this summer.

Stay updated on CEFO Advisors and follow us on LinkedIn: https://www.linkedin.com/company/cefo-advisors/.

CEFO Welcomes Diana Tindall as Assistant Controller

CEFO advisors is thrilled to welcome Diana Tindall to the team as an Assistant Client Controller. Diana started her career working in the Hospitality field for Hyatt and Marriott as a Financial Analyst, and has since worked as a Controller in a variety of fields including Commercial Real Estate, Construction and most recently a medical startup company.

“I am excited to work with a variety of clients and industries. I enjoy change and new situations so the structure in CEFO fits my personality”, Diana said.

Diana will be overseeing clients’ daily accounting operations and is looking forward to growing in her role and continuing to learn.

In her free time, Diana enjoys running, reading, and spending time on her family’s boat during the summer.

Stay updated on CEFO Advisors and follow us on LinkedIn: https://www.linkedin.com/company/cefo-advisors/.

Bob Hart Joins CEFO Advisors as a Client Controller

CEFO advisors is excited to welcome Robert (Bob) Hart to the team as a Client Controller. Bob joins us with 40 years of financial/operational experience across several industries. Since 2002 he has worked in the electronics/lighting industry, in roles ranging from VP Finance to CFO to President. Bob has his BBA in Accounting from Siena College, and MBA from RPI.

“I joined CEFO Advisors so that I can have the opportunity to work with different clients, across different industries so that I can hopefully help them to grow/prosper.  CEFO has a wealth of talent here, and I look forward to working with my co-workers on different engagements so that I can also personally continue to grow professionally”, Bob said.

Bob will be assisting clients with cash flow and working capital management, as well as ensuring strong internal controls are in place. His goal is to help his clients grow and prosper.

Bob and his wife recently relocated back to this area after 38 years. They are happy to be back close to their families and look forward to exploring the area, as well as summers in Saratoga.

Stay updated on CEFO Advisors and follow us on LinkedIn: https://www.linkedin.com/company/cefo-advisors/.