• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer

Scale FinanceScale Finance Logo, Interim CFO, Part Time CFO Services, Accounting Support, Temporary CFO, Accounting Bookkeeping Services

Interim CFO, Part Time CFO Services, Accounting Support, Temporary CFO, Accounting Bookkeeping Services

Charlotte · Raleigh – Durham · Chapel Hill · Triad · Southern Pines · Coastal Carolina
Closing the GAAP to Scale Your Business
The FINACA Logo
919-230-4667
Scale Finance, LLC, Financing, North Myrtle Beach, SC
  • Home
  • Services
    • CFO & Controller Services
    • Capital Raise Services
    • Business Valuations
    • Mergers & Acquisitions
    • Professional Consultations at No Cost
  • Professionals
    • Partners
    • Charlotte Team
    • Raleigh – Durham – Chapel Hill Team
    • Greensboro-Southern Pines
    • Coastal Carolina Team
  • Client Experience
    • Closed Capital Raise Transactions
    • Closed M&A Transactions
    • Client Endorsements
    • Information Technology
    • Healthcare, Biopharma & Medical Device
    • Services, Energy, Industrial
    • Consumer, Retail, Media
    • Real Estate
    • Private Equity Groups
  • Recent News
  • Knowledge Bank
    • Best Practices in Scaling Companies
    • Entrepreneurial Management Skill- Building
    • Financial Management
    • Mergers & Acquisitions
    • Regulatory Developments
    • Venture Capital
  • Contact Us
    • Charlotte
    • Raleigh – Durham – Chapel Hill
    • Triad – Southern Pines
    • Coastal Carolina
  • Joining Our Firm

Is Your CFO Any Good? 4 Point Checklist

Source: Walter Simson, Principal, Ventor Consulting

I have met my share of lousy chief financial officers. Like the sportswear executive who didn’t know the various products’ margins–and then invested heavily in the losers. Or the manufacturing lady who spent a lot of time complaining about the bank’s interest rate, but couldn’t close the books on time. Or the guy who resists doing budgets.

Why had their managers not thrown them the hell out?

Maybe because the managers just didn’t know what makes a good CFO. Having a bad CFO is a silent disease, like low sperm count. You don’t know you’ve got it until you finally decide to check for real.

What if we had a simple CFO checklist? Like the famous Rockefeller habits, a list of ideal management practices compiled by author Verne Harnish?

To his list–which emphasize such matters as team alignment, goal setting and meeting management–let’s add some meaty financial measures that define a well-run company.

Here goes:

  1. Basic operations. You have financial information (profit and loss statement, balance sheet, cash flow and schedules) by the tenth calendar day following the end of a month. I know, people, I know–ten days is hard. But, so is not having complete financial information. Let’s set a standard. Oh, and by the way, this includes having a monthly budget-versus-actual schedule for all the documents in the package. That is so we can review any items that are out of whack and ask the a simple question: what the hell are we going to do about it?
  2. You can identify the company’s core products and core customers and elucidate plans for their continued growth. Core products and customers, by definition, provide handsome margins, and to understand handsome margins you must know your costs. This, strangely, is an area that some financial managers think needs to be checked as often as a lunar eclipse. (To be clear, you need to know your costs on a current basis.) The other aspect of core products and core customers is that sometimes, to engage in growth, you gotta be a deal maker. As in a buyer of core business and a seller of non-core. Let’s put that in our list, too.
  3. You can forecast the capital needs of the business and you have absolutely, positively secured capital availability over the next three years. How do you forecast capital needs, by the way? By having a hands-on understanding of your cash flow, that’s how. Any questions on this, please see point number one, above,
  4. Systems. You have procedures and routines that protect the assets, reduce risks and permit key functions to grow. Here I don’t necessarily mean your CFO has to be a computer jock, although it probably couldn’t hurt. It’s more that he or she needs a mindset of protecting the downside. (Receivables–collected. Assets–insured. Contracts-vetted.) You do that by thinking through the risks and making sure that procedures, and not personalities, have everything in control.

There you go. That’s my wish for you–that you have a CFO who can cheerfully and competently orchestrate these deliverables for your growth company. (Oh,and that’s a good point. I say “orchestrate” because the CFO doesn’t produce financial statements alone–the staff does that. If you have a CFO who works alone and who cannot do everything on the checklist, you don’t really have a CFO. You have a controller who takes a lot of abuse from management. The point being that a true CFO needs a competent organization in order to be successful.)

I think of this as a minimum. For example, if you have complicated costing, a sophisticated capital structure or a demanding board of advisors, your requirements for financial management will grow.

But if your CFO is not making the minimum, put a performance plan in place, because the organization needs these skills. And if the CFO won’t achieve this vision in a reasonable time?

Well, then put this list on the company refrigerator. Then, the next time you clean the fridge, make a note to also clean your financial house.

About Scale Finance

Scale Finance LLC (www.scalefinance.com) provides contract CFO services, Controller solutions, and support in raising capital, or executing M&A transactions, to entrepreneurial companies. The firm specializes in cost-effective financial reporting, budgeting & forecasting, implementing controls, complex modeling, business valuations, and other financial management, and provides strategic help for companies raising growth capital or considering M&A/recapitalization opportunities. Most of the firm’s clients are growing technology, healthcare, business services, consumer, and industrial companies at various stages of development from start-up to tens of millions in annual revenue. Scale Finance has multiple offices in the Carolinas including Charlotte, Raleigh/Durham, Greensboro, and Southern Pines with a team of more than 45 professionals serving more than 130 companies throughout the region.

Primary Sidebar

Knowledge Bank

Hiring a Startup CFO – When to Hire a CFO & Why You Need One

Owner Financing of Small Companies – Debt or Equity Considerations

Will Your Merger be Blindsided by Fraud?

Series C & Beyond: How Growth Investing is Different Than Early Stage

5 Rules for an A+ Board Meeting for Investor-backed Companies

Understanding & Using Your Cash Flow Statement

Why Business Valuations are Helpful (& What do they Typically Cost)?

Managing Merchant Fees – Role of Zero Fee Processing

Can Accountants Value a Business?

Personal Guarantees – Should You Grant One?

10 Pieces of Advice When Someone Wants to Buy Your Company

Convertible Note Financing – Payback Time

Due Diligence Fiasco – A Look Back at HP-Autonomy

Applying for Business Loans – Hard Credit Checks

7 Ways a Business Name Generator Can Help Entrepreneurs

Citizenship by Investment Overview

Understanding the True Cost of Employee Turnover

How to Think About Valuation When Raising Venture Capital

What it Takes to Shift to a Recurring Revenue Model in Hardware & Software

Differences Between Major SBA Loan Programs – SBA 7(a) vs. SBA 504

Explore the Knowledge Bank…

Secondary Sidebar

Recent News

Scale Finance Closes $20M ABL Financing for TRA

Scale Finance Leads the Successful Sale of Carolina Restoration Services

Scale Finance Advises FX HedgePool on $8M Series A Funding

SF Closes Acquisition of Midwest Outdoor Resorts for Travel Resorts of America

Scale Finance Closes $7 Million Senior Debt Financing for Travel Resorts of America

Scale Finance Advises on Acquisition of Falcone Crawl Space & Structural Repair

Congrats to Payzer for Closing $23 Million Equity Financing

SF Client Headbands of Hope Closes Strategic Growth Investment

SF Assists Semper Investment Company in Acquisition of ACM Removal

SF Client SentryOne Acquired by SolarWinds (NYSE: SWI)

Scale Finance Assists GPM with Acquisition by Netsmart

SF Client Broadstep Behavioral Health Continues National Growth Through Acquisitions

SF Client Impact Financial Systems (IFS) Acquired by iPipeline

Scale Finance Assists TrueLearn with Investment by LLR Partners

Scale Finance Assists Textum Weaving with Investment by Quad-C

Scale Finance Closes Debt Financing for Horizon Eye Care

Scale Finance Closes Acquisition of Horsepower Site Services by MCG Civil

More News…

Footer

Media

Scale Finance Managing Director Dave Gilroy interviewed on WSIC Radio (local Fox affiliate)

/wp-content/uploads/2014/02/David-Gilroy-Interview-Local-Biz-Now-2-7-14.mp3

Entrepreneurial Tips

  • Funding Tips from Scale Finance
  • CIE Life Sciences Panel Discussion
  • Why Use Fractional CFO Services

Sign Up—Finance Bulletin

Monthly insights into corporate finance for entrepreneurial companies

Sending

FINACA is a nationwide network of independent finance and accounting consulting firms focused on delivering exceptional client service.

FINACA is a nationwide network of independent finance and accounting consulting firms focused on delivering exceptional client service.

Return to top of page

Copyright © 2008–2023 Scale Finance, LLC
Securities and offering services through Charles Towne Securities, LLC. Members FINRA and SIPC.