Peter Aronstam Part Time CFO Boca Raton FL B2B CFO

May 11
24

How a CFO can create a risk-intelligent organization

Every business and CEO has to deal with risk. Many CEOs look for better processes to manage uncertainty in difficult economic and regulatory environments. For answers they often look to their CFOs – “a voice of risk-related thinking; a catalyst, strategist, operator, and steward with respect to risk decision making; and, in some organizations, the de facto chief risk officer”.

As described in “The Risk Intelligent CFO: Converting Risk Into Opportunity“, a white paper sponsored by Deloitte, dealing with today’s risks takes Risk Intelligence. CFOs — with their access to balance sheets, corporate transactions, and the business —are well positioned to recognize, manage, and report risks and opportunities to the owners.

The paper describes 8 key points that CFOs should apply to create a Risk Intelligent organization:

Prepare for the known and the unknown. Keep track the environment to identify risks and opportunities and establish a plan how to respond.
Identify assumptions that might put the strategy itself at risk, as well as threats to the execution of that strategy.
Focus on the significant risks. Determine which risks matter most and communicate those to your organization.
Get the CEO and the Board on board. Involve them directly into the processes for addressing risk.
Know how much risk you’re willing to bite off. Discuss the company’s risk appetite with the CEO to make the most of both rewarded and unrewarded risk.
Handle reputation with care. Consider the effect decisions and events could have on your company’s reputation and actively manage them.
Connect the dots. Understand interdependent risk and the cascade effect individual risks could have in combination.
Compliance knows no borders. Stay up to date with compliance and enforcement requirements and ensure that your company remains compliant.

“Preventing bad things from happening is no longer sufficient. That’s why Risk Intelligent CFOs focus on creating value, putting strategy at the heart of risk management initiatives, and scanning the environment for obstacles that stand in their way. Convert risk into opportunity. Make good things happen.”

Posted in Risk management by Peter Aronstam. No Comments

May 11
19

The Importance Of Forecasting And Planning When Running A Business

AS A BUSINESS OWNER, DO YOU REGULARLY SET UP AND REVIEW ANNUAL OPERATING PLANS AND BUDGETS?

If you do not, read about my recent experience with a client who is now using budgets set up by his B2B CFO®.

A call from a potential client got me thinking about how important it is to run a company using a forecast that contains both operating metrics and financial targets. The call came because the company’s banker was concerned by the company’s very rapid sales growth. In January 2011 alone, sales of a major product line exceeded sales for the same product for all of 2010. The client had been successful at year-end in landing two very large new customers. All parts of the business were being stretched to meet this new demand. A high-grade issue for most businesses, you might think, but also a legitimate case for banker concern.

Why was the banker so concerned that it had threatened to pull its line of credit? High growth in a business can easily translate into a major cash squeeze. If the owner does not have a close eye on the overall financial landscape, and does not run a forecast or anticipate exactly how various growth scenarios will affect inventories, receivables and payables (the 3 key elements of working capital), the business can very easily become over-extended and run out of cash. Without adequate preparation, the owner won’t have sufficient information to avoid such a situation.

At year end 2010 this client had to place large orders for inventory to sell to the new customers, had to pay for the inventory on receipt, but could only collect from his customers 45 days after they had received the goods. He was potentially facing a 75 – 90 day lag between cash outlay for the goods and being paid by his customers. What did that mean for cash flows? Were there other receivables that would cover the gap? Could the owner push payment terms out to some of his vendors to cover the gap? He simply did not know, because no one in his company could give him a cash flow projection or analyze the variables. He had no plan to deal with a cash squeeze and he was ill prepared to explain to his bankers why he might need more working capital, and how he would repay from surplus cash flows later in the year. In the end, he had to cover the shortfall from his personal funds.

A B2B CFO® understands the cash-flow and operational ramifications of growth. He also understands that a budget and updated forecasts are essential to manage the growth. The creation of a budget itself with a business owner gets the owner to focus on the key business elements that drive cash and profitability. Regular monitoring of performance and achievements against budgets and forecasts ensures that the owner always regularly reviews financial performance with the B2B CFO® and understands what was reviewed. Surprises are kept to a minimum; and the owner now has financial tools to deal with unforeseen events. Had my potential client been using a cash and operating forecast, he would have been able to demonstrate to the bank that the cash outflow was under control, and that there would be funds to repay a draw under the line of credit.

Tags: B2bcfo, cash flow, forecast, planning
Posted in cash flow plan by Peter Aronstam. No Comments

Sep 10
1

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

184% Growth Earns B2B CFO Spot in the 2010 List of Fastest
Growing Companies in America

Phoenix, Ariz. August 24, 2010 – B2B CFO, nation’s largest
provider of CFO services to small businesses, has been named to the
prestigious Inc. 5000 list of fastest growing companies in America.

Now in its 29th year, Inc. Magazine’s annual ranking judges US-based
and privately held companies by their revenue growth. This year’s
list was ranked on the percentage in revenue increase from
2006-2009. B2B CFO’s growth earned 84th place in its industry.

“There are approximately 27 million small businesses in the U.S.
today,” said Jerry L. Mills, founder and chief executive officer of
B2B CFO, “It is a huge honor to be among the fastest growing and the
most successful businesses in the country. Our firm has experienced
tremendous growth over the past few years and we are on track to
continue expanding. I am especially grateful to all of the firm’s
dedicated Partners who continue to advocate our services around the
nation.”

In a personalized letter congratulating B2B CFO on this
accomplishment, Jane Berenston, editor-in-chief of Inc. Magazine’s
wrote “Congratulations: your company, B2B CFO, has made the 2010
list of the fastest growing private companies in America. This
achievement puts you in rarefied company, especially if you consider
that over 27 million businesses are registered in the USA. The elite
group you’ve now joined has, over the years, included companies such
as Microsoft, Timberland, Visa, Intuit, Jamba Juice, Oracle, and
Zappos.com. I look forward to congratulating you in person in
Washington, D.C.”

B2B CFO’s growth is reflected in numerous awards this year. The
company was also recently named in ACE Corporate Growth Awards,
which recognized the most successful and fastest growing companies
in Arizona.
In August 2010, B2B CFO has grown to 170 Partners across 39 states,
representing 5,000 years of cumulative experience. Each Partner is a
seasoned financial executive who serves as CFO to growing businesses
on as-needed basis. Approximately 80% of the Partners have a
background that includes senior executive positions at the Big Four,
and all of the Partners have held high level executive finance
positions in various industries in corporate America. Together, B2B
CFO Partners work with more than 500 businesses in the nation with
combined annual sales of more than $3 Billion.

Jerry L. Mills and many of the B2B CFO Partners regularly dedicate
time to educate business owners on financial matters. Mills is a
frequent speaker and contributor and has been featured on many
national media networks including FOX Business, Fortune Small
Business, Smart Money and many others. Mills is also the author of
The Danger Zone – Lost in the Growth Transition, and Avoiding The
Danger Zone – Business Illusions, both business non-fiction books
that help entrepreneurs understand and build a strong financial
strategy.

“We look forward to participating in the Inc. 500|5000 conference in
Washington, DC this fall,” added Mills. “Along with my colleagues, I
look forward to the October 2nd awards ceremony and to meeting the
entrepreneurs that created the other 5000 fastest growing companies
in America.”

About Inc. Magazine

Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc.
is the only major business magazine dedicated exclusively to owners
and managers of growing private companies that delivers real
solutions for todays innovative company builders. Inc. provides
hands-on tools and market-tested strategies for managing people,
finances, sales, marketing, and technology.

Inc. Magazine’s 29th annual Inc. 5000 ranking of the fastest-growing
private companies in the country is available online at
www.inc.com/inc5000/list

About B2B CFO

Headquartered in Phoenix, Ariz., the firm was founded in 1987 by
Jerry L. Mills. B2B CFO is the nation’s largest CFO firm serving
entrepreneurial, growth and mid-market companies with revenue under
$75 million. The firm’s partners have an average of 25 years of
experience and each individual partner is a senior level executive
with a broad range of expertise. Please visit online at
http://www.b2bcfo.com/