I’d like to tell you a true story about a fractional CFO and how he successfully became the glue that brought leadership, accounting, sales, and operations, working together successfully in his first 60 days.
When CEFO Advisors first met with this client, it was clear that there was something going on that was creating a growing sense of frustration and tension within the company. The disconnect between management, accounting, and the other departments was growing. Processes were weak, cross-departmental communication was reaching its breaking point. Financial reporting was 45+ days late month after month and the owners of this company had little faith in the accuracy of the information. To add insult to injury, there were several disparate systems and much of the operational data was compiled using very large, cumbersome spreadsheets. The owners were nervous about the volatility of the markets, and the accounting team was working against finding a solution to bridge the operational data with the financial data to ensure the financial reports were accurate and explainable.
CEFO started right away reviewing data, compiling processes, and interviewing each person on the administrative and finance teams. It was clear that the rapid growth of this company had pushed everyone beyond their capabilities. Operational data was reviewed with the owners and a connection was built between the information disseminated in those reports with the actual changes in market volatility, versus what the recorded financial results were showing. There were many errors in processes that were evaluated, and controls were put in place to quickly minimize the errors. Weekly accounting and ownership meetings were established and led by our CFO. Our CFO was instrumental in championing the finance team as well as management when appropriate. He gained a lot of respect and trust through weeks of consistently reviewing the results with the team and helping to solve critical and non-critical issues.
CEFO developed a strong relationship, one of mentorship with the Controller and his team at the client. Our CFO was able to drive financial reporting time from 45 days down to 30, then down to 15 within 5 months. A standard financial package was developed, with monthly deep dives into topics such as margin dilution, inventory tracking, and cost containment. Our CFO continued to lead the weekly meetings, but after 7 months, he was able to turn that over to their Controller knowing that consistency was the key to much of the success. Our CFO continues to be onsite monthly to perform financial reviews, and quarterly to lead and conduct a leadership strategy summit. Communication within the Company continues to be strong, and the Controller and his team continue to lean on our CFO whenever necessary.
The Company continues to grow, margins have stabilized, the client is ecstatic, and we can’t wait to continue to watch their success!
