Is Finance your Company’s weakest Link?

by Rich Bond

Many private business owners/company presidents feel that finance is a necessary expense because a book of records allows them to pay their taxes and maintain a banking relationship, but that finance adds little value.

The CEOs of many larger companies, particularly public ones, say their CFO is a strategic business partner, and a key to their company’s success.

This dichotomy is due to how finance operates.   Most larger companies have realized the value of finance does NOT lie in what happened, but in analyzing what will be happening and how that can be improved.  Most smaller companies finance is essentially bookkeeping.

Most larger companies have moved on to finance, what will be happening, because they are forced to provide public projections of their future financial results.

After some embarrassing “earnings misses” these companies adopted software to reduce the amount of time to generate their results and more time analyzing what will be happening.   Looking at what will be happening allows businesses to analyze how the future results can be improved.

As financial software has continued to get better and cheaper, this transformation can be accomplished by companies of almost any size.

We have worked with dozens of private businesses helping them move to forward looking finance and improve their profits by 50% or more.  One of clients was able to sell the family business to a national Private Equity firm for significantly more than they expected once the company showed it had a financial infrastructure.

I would love to talk to you to help you determine if poor financial information is reducing your company’s profits and making it harder to grow.

If you reach out to me, I can send you case histories illustrating specifically how companies like yours increased profits.  I also have a simple evaluation tool, that will help you determine if your Controller is helping or hurting your bottom line.

If you have a great finance person who is a true business partner I would love to hear about him/her and how this was accomplished.

If you think I am full of hot air, please let me know that as well.

I look forward to hearing your opinion.

 

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