Xmas heralds cashflow worries

If you love unpleasant surprises and your default financial management technique is ‘flying by the seat of your pants’ – this time of year is especially exhilarating.

Late January / early February usually gives the most bang for your buck in terms of adrenaline rush, when trying to meet your payroll / super obligations.

Maxed out overdrafts and credit card facilities hit you like a X-mas party hang-over and delays in commencing projects just compound the headaches. A Berocca might fix your  party hang-over but not your cashflow woes.

Of course, the alternative is to understand your strategic drivers, know if you are on track or not and have faith in your forecasts. This is the expert domain of a Virtual CFO

Virtual CFO’s use budgets, forecasts and cashflow plans to help make informed strategic decisions about the future, which keep you on-track and allow you to see where you are headed.

David Dillon is the President of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging Virtual CFO sector within the accounting profession. Collectively the association currently has almost 600 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals. If you would like any more information regarding the Association of Virtual CFO’s, please visit our website www.vcfoassociation.com.au

Forecasting – nobody likes surprises

Humans crave certainty … we don’t like surprises.

Surprises give us the same fight or flight impulses that cavemen had, when any little rustle in the bushes they heard, could be a predator looking for something to eat.

Situations that are often mild and manageable to the rational mind, become anxious and overwhelmed reacting to something without any prior warning.

I remember reading about a young woman who was tragically killed in a car accident, after her car veered off the road and hit a tree. Accident investigators put the cause of the crash down to her reaction to a huntsman spider crawling out from behind her sun visor.

Huntsmen aren’t aggressive spiders. They do have venom, but they aren’t deadly.

Advance notice, allows the rational brain to process the risks, put the mind at ease and take charge of the situation.

By anticipating scenarios in advance, you can evaluate alternatives and make informed strategic decisions about the future. Success doesn’t happen by accident.

Forecasting is a core strength of a Virtual CFO.

Forecasting should be a routine and discipline that your business uses to put you in control and keep you on track.

David Dillon is the President of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging Virtual CFO sector within the accounting profession. Collectively the association currently has almost 600 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals.

If you would like any more information regarding the Association of Virtual CFO’s, please visit our website www.vcfoassociation.com.au

#sme #virtualcfo #accounting

What does Root Canal treatment and Virtual CFO have in common?

Nobody WANTS to get a root canal treatment. Until you’ve NEEDED root canal treatment you can’t possibly imagine the pain you experience prior to getting it done.

What starts as a tooth being sensitive to high and low temperatures or pain when chewing quickly escalates if bacteria gets inside the pulp leading to a continuous, throbbing pain caused by an infection inside a tooth. If you’ve ever felt it, it will be etched in your mind forever thereafter.

I got my first one at 32. Until then, I’d never even had a filling. Maybe this was why I had become complacent and had missed a couple of annual check-ups. In my defence, I’d also relocated to another city, moved apartments a few times and changed jobs twice and didn’t have time to look for a dentist. I’d also clearly overestimated my teeth brushing skills as well as completely underestimating the downside to getting it wrong.

Turns out, there was a dentist on another level of the city office building I worked in, next to them a teeth whitening clinic and an orthodontist. People in my office called the Dentist the ‘torture chamber’, hardly a glowing endorsement. I’d have a little chuckle as they came back from ‘the chamber’ with the side of their faces all droopy, drooling and unable to speak. Hilarious, until the day my own tooth started to feel sensitive to hot and cold drinks.

I did what most first timers do – ignore it and hope it will go away.

But it didn’t. It got progressively worse. It was throbbing so bad that one day I rode the elevator down from Lvl 15 to the torture chamber and begged for an appointment. I was desperate. Anything, early, late, a last-minute cancellation, anything to stop the pain.

People fear root canals because they assume they are painful, but procedure itself is usually no more painful than getting a filling. Afterwards if it hurts, you just take a couple of Panadol and it usually settles down pretty quickly. The relief is immense and the gratitude to the skilful dentist enormous.

Numerous follow up appointments later, to re-clean the cavity, to measure and fit a titanium post, before placing a porcelain crown over the top and I now had a structurally sound, pain free tooth (that cost about the same as a small car).

But the big lesson learned was not to ignore it and hope that the pain goes away and next time to take action and book an appointment with the dentist much earlier.

What’s this got to do with Virtual CFO?

Imagine your routine annual dental check-up and your trip to your tax accountant as being similar. You get a de-scale and clean and a ‘once-over’ but there is only so much they can do in this brief encounter. It’s more about compliance and ticking the box that you’ve done it.

However, in between visits is when you usually run into problems.

If you are a ‘first-timer’ feeling some financial pain in your business, you might be inclined to do nothing and hope the pain goes away. (sound familiar?)

But if it doesn’t, you’ll be continually stressed out about money, constantly getting dragged away from what you should be doing and into finance problems, whilst finding it impossible to switch off when you get home. Eventually the pain will be so unbearable you’ll be begging someone for help. It’s no longer a want by this stage, it’s an urgent need.

At this point it’s critical to make sure your accountant isn’t the dental equivalent of a orthodontist or teeth whitening clinic who specialise in a different area (cosmetics) to the root canal expert.  You need someone who can take the pain away. But accountants, like dentists, are not all the same. You need an Accountant who is an expert at removing the pain of poor strategic financial management.  An Accountant who can get rid of the uncertainty and chaos and make your business reliable and predictable, so you can focus on your clients needs and grow your business.

CFO’s are the expert accountants in this specialist area. BHP and other great, successful companies don’t need convincing about the merits of a CFO to lead their strategic financial management. But smaller companies can’t justify a huge full-time internal overhead ‘chewing away’ at their bottom line, so the best option for them is a Virtual CFO, who can put you back in control and keep you on track, but on a part-time or as-needs basis.

If you are not a first-timer and you’ve experienced excruciating ‘pain’ before in your business, you be wise enough to know not to wait until becomes unbearable before you do something about it next time.

David Dillon is the President of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging Virtual CFO sector within the accounting profession. Collectively the association currently has almost 600 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals. If you would like any more information regarding the Association of Virtual CFO’s, please visit our website www.vcfoassociation.com.au

How to get your monthly finance reports by the first week each month without fail

Do you set new financial year goals? I know what you are thinking – what is the business equivalent of reversing the visible signs of ageing, learning a new skill or losing weight?

In all seriousness, let’s not settle for just any old resolutions –we want those that will help your business grow! Operational changes are often the best place to start because they can positively impact your bottom line.

One of the most common resolutions we see from clients this time of year is improving their finance systems. Sounds good to us – we know how you will be able to accomplish this resolution in the first quarter of 2021/22.

In today’s world of tech and automation, it seems almost ridiculous that many companies still use manual processes to run their business finances. With manual processes, your existing finance team is doing more work than necessary while compromising on accuracy. It sounds like a clunky situation for the whole company: critical decision making is delayed while manual processes are underway, and we can just picture the overflowing email inboxes that need attention. Hoping that manual reconciliation processes will be complete in a 5-day window after the end of the month is optimistic; the reality is closer to the 15th or 20th of the month for many businesses.

With this in mind, why not eliminate those pesky paper forms or spreadsheets? Instead, you could automate ongoing finance tasks with a tailored system that will make everyone happy – especially your overworked staff members who are currently drowning under piles of documents – both physical papers & digital files! Automation tools are available for accounts payable/ receivable, receipts & budget approvals, payroll and taxation.

By implementing automation tools for your finance systems, you can gain insights into your financial position in real-time and have all of the associated data required for accurate Monthly Reporting completed on the 5th of the month, without fail. You can understand your business position in real-time, not a month after the fact.

Your business will also benefit from:

 

Data Integrity

The problem with manual entries is that you have no way of knowing if the data in your forms are correct or not, and it takes a lot longer to get anything done when humans do everything. By automating finance business processes, everyone can focus on doing what they’re best at- like analyzing numbers and planning for your future!

Improved Efficiency

Automation saves time and streamlines workflows, which can make a finance team more efficient than ever before.  In addition, automation tools are processing data on your behalf 24/7.

 

Quick Approvals

Whether it’s a budget approval or a reimbursement claim, finance automation software will help you save as much as eight hours a work week – per person. As an added advantage, you can also eliminate unwieldy email threads checking on the status of every request.

 

Top to Bottom Visibility

The ability to take a 360-degree view of financial information can be beneficial for understanding your company’s current state. You’ll have the opportunity to know why fluctuating numbers are happening so you can make smarter business decisions in the future and stay ahead of any curve balls that come your way.

 

Virtual CFO’s are leading the way for businesses working ‘in the cloud’ with the best financial automation technology. They can show you how finance systems could be improved, tailoring an automation toolset for your business. An expert team will guide you through the implementation process & help to train your staff in the new and improved ways of working.

 

Rachael Turner is a member of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals.

If you would like any more information regarding the Association of VCFO’s please visit our website www.vcfoassociation.com.au

What you and The Walt Disney Company could have in common.

For those unfamiliar with a certain mouse and his friends, the Walt Disney Company© is a large and diversified Global 500 entertainment and media enterprise headquartered in California, USA. The company’s vision is to “entertain, inform and inspire people around the globe through the power of unparalleled storytelling.” It is one of the most recognised brands worldwide. According to the latest Annual Report, Disney’s Net Worth is $122.18 Billion. Yet it’s not the dollar figures that impress me, it’s how they consistently plan for their future.

 

Did you know there is a strategic plan for the next 5 years of cinematic releases? The plan is reviewed regularly, distributed on a strict timeline every quarter to the team, with tweaks for specific geographic markets.  The entire team is regularly informed of future projects, projects nearing completion or delays, new releases and the associated promotional activities. At any given time, an employee knows what is in the pipeline and understands their role in the success of future releases. Everyone, no matter their role, is working towards the same goals.

Your business can also have a five-year strategic plan covering finances, operations and growth. By communicating the business goals to your team, you can align KPIs, sales targets and performance reviews with clarity. The new financial year is a fantastic time to start developing strategic goals for the next 12 months.

 

Ask yourself and your team what challenges shaped 2020/21 and what did you learn from them? If you invest in solving these challenges now, think of how much better off the business will be at the end of 2021/22.

 

If this financial year is the ‘year of change’, what about the goals for the next 24 months?

 

Where do you envision the business in five years time?  Get creative and dream big, you have five years to get there. Could it be expanding into a new market, moving to new premises or establishing a franchising model? Is your team ready for the change?

 

No matter the vision, Virtual CFO’s are experts at collaborating with businesses on their strategic plan. We understand the financial processes, tax implications, HR requirements and ‘future proofing’ needed to make strategic goals a reality. We can streamline your business operations, help you plan for steady future growth and gain the executive level support your team needs.

We are here to help you through the process, creating a strategic plan for the ‘right now’ through to 2026.

Rachael Turner is a member of the Virtual CFO Association.

 

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals.

 

If you would like any more information regarding the Association of VCFO’s please visit our website www.vcfoassociation.com.au