10 Disasters an Experienced CFO Can Help You Avoid
Usually when I talk about how a CFO can help you build a profitable company I talk about sexy things like:
Getting the cash you need to grow, or
Boosting your confidence in your numbers and how you talk about them.
An experienced CFO can also help you avoid big, expensive problems. So today, I’m sharing 10 ugly, true-life problems I’ve helped my clients overcome. They are all real and all completely avoidable. I hope they never happen to you!
This list includes fraud, corruption, misuse, and mismanagement. The most dramatic problems come in the wake of mistakes made by owners, staff, or outside advisors that aren’t paying enough attention. Regardless of how it happened, the outcome is almost always more expensive than the good management practices that would avoid them. So consider a CFO or another outside advisor as a shield, security blanket (or sun filter) that can help you look and see the hidden risks in your business.
10 Things An Experienced CFO Can Help You Avoid
When being cheap gets expensive…When your start-up has an interested investor and you need a clean set of financials. Too bad you haven’t kept your books up to date and now you have to pay someone to get it all straightened up in a hurry.
Where’s the Beef? I mean bills!… When your balance sheet shows a zero balance for Accounts Payable but you know cash is tight, and it turns out the person paying bills is keeping overdue notices in a folder so they don’t show up on your Accounts Payable list.
#time for a new tax advisor…To avoid peak season tax preparation rates your company traditionally files an extension on April 15th; until the IRS fines you for not paying taxes on time.
That time your computer died and 20 years of accounting work wasn’t backed up properly…
Run to the bank…When your company is struggling for cash and you find an unopened envelope with a $20,000 check from 3 weeks ago.
Communication fail…When you can’t answer an investor’s questions during a pitch because the numbers on the slides don’t match your projections.
Ouch…When you take on a loan without fully understanding the terms and the lender takes daily payments from your checking account and charges obscene interest.
When your trusted, long-term employee who does payroll has been giving herself extra days off — with extra pay.
When keeping inventory on a cash basis makes your margins look better than they really are and your projections are way off from reality.
When a recently fired employee files a whistleblower complaint and a new audit show that a key staff person used the company credit card to pay for an affair (hotels, liquor) with another employee. TIP: Switch your audit firm every few years.
Do you have any financial horror stories? Have Questions you'd like to discuss with a CFO?
Schedule a free 30-minute conversation with CFO on Speeddial! Our conversation will be focused on one issue or opportunity where you want advice or a new perspective. You choose:
The thing that keeps you awake at night
An idea that excites you
Places you want to tighten your ship