Company owners often approach me because they feel they don’t have a clear understanding of their company’s financial performance. Founders and CEOs typically get engrossed in company vision and daily decisions, and the financial picture gets muddled when multiple revenue streams are involved. The solution to this problem is conducting regular financial meetings with a company’s leadership team.
A CFO will compile and present the financial performance and updates to the owner, operations manager, or executive board. This includes reviewing highlights in the financial reports such as the P&L and balance sheet. It also includes an analytical review with graphical and trendline analysis and KPI reporting. The CFO will point out risks or shortfalls and provide updates about specific company goals or projects.
This regular financial meeting gives owners a real-time snapshot of their company, and it provides strategic insight that helps companies make better long-term decisions and prepare for risks ahead of time. For example, I might point out a period of low cash flow and recommend a line of credit to bridge the gap, or I may notice accounts receivables are building up and recommend making collections a focus.
A CFO brings the expertise and determines the format of the presentations based on each company’s situation and the leadership’s goals or concerns. For example, leadership may be concerned about gross profit, so we could conduct a detailed review of cost of goods sold. I once had an IT client who provided custom consulting projects for clients. After a few regular financial reviews, it was evident that this revenue line was consistently not very profitable. After a more detailed analysis, they ended up dropping it and switching focus to more profitable revenue lines.
I have previously discussed the importance of regular weekly dashboard reporting, but it’s also vital to have regular financial meetings so important pieces and trends in the reporting can be highlighted and discussed. Sentinel Finance Group compiles and regularly presents this financial information to all of our clients as part of our CFO services.
Sentinel Finance Group is an outsourced CFO firm in Kansas City and provides fractional CFO services and controller services to local businesses.
