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I wanted to share Tim Urban’s framework called the Procrastinator’s System ( see link to TED talk  https://www.youtube.com/watch?v=arj7oStGLkU), to represent what goes on in our heads. PS consists of three characters:

• Rational Decision-Maker
• Instant Gratification Monkey
• Panic Monster

The Rational Decision-Maker wants to take information on board then decide the best course to take and to do something productive right now.

The Rational Decision-Maker gives us the ability to :

• Visualize the future
• See the big picture
• Make long-term plans

Significantly, these are things no other animal on earth can do:

The Instant Gratification Monkey lives entirely in the present moment. He has no memory of the past, no knowledge of the future, and he only cares about two things: easy and fun. The Monkey causes us to avoid the hard stuff.

When the Rational Decision Maker and the Monkey to agree it leads to awesome play and fun times.

 

But when it makes sense to roll your sleeves up and do harder stuff (not the fun things)  this causes conflict in your head and the Monkey often wins. When the Monkey wins, we procrastinate and waste our time on stuff we shouldn’t. When we procrastinate, easy and fun activities happen when we should be sweating or swotting.

The Panic Monster is dormant most of the time, but he wakes up anytime:

• a deadline gets too close, or
• there’s danger of public embarrassment.

The Monkey fears the Panic Monster When the Panic Monster shows up, the Monkey straight away cedes control to the Rational Decision-Maker.

There are 2 kinds of procrastination:

• Procrastination on hard things WITH deadlines
• Procrastination on hard things WITHOUT deadlines

Now remember, the Panic Monster gets involved when deadlines near. However, when there are no deadlines the Panic Monster doesn’t gets triggered, and we are free to procrastinate forever. This type of long-term procrastination is often less visible and usually suffered quietly and privately. It can lead to long-term unhappiness and regret.

If you’re entrepreneurial, it’s easy to think there are no real deadlines or no real danger of public embarrassment if you’re not managing your business properly. As a result, things can tend to drift along because the Monkey allows it to. The Monkey allows you to live in the moment, push the hard stuff to the side, and hope for a better future where making money is easier than it is now.

 

 But, your life is the ultimate deadline.

 

Time is ticking, we all only get a finite time on the planet and that alone should kick your panic monster into action and seek out an expert Virtual CFO to help you visualize the future, see the big picture and make long-term plans.

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 30 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

Adding a CFO to your business can super charge it, provide a road map for business growth and prosperity. Business owners are wary of hiring a CFO because they see it as a C- Suite executive that comes with a   C Suite salary.  The reality is very different, you get financial expertise and strategic advice as often as you need to and aren’t laboured with a full-time salary impacting your bottom line.  The right CFO will end up earning your business money so invest wisely & here are 5 signs your business needs a CFO.

 

1. Your always thinking of growing your business but are unsure if you can afford it

Business owners are intuitive and know their business model better than anyone yet sometimes the “fly blind” on where their numbers are. They know they made a profit last month, but can they deal with the impact of investing in a larger warehouse or launching a new product line.

Virtual CFO’s provide strategic direction for what may come, they layout the costs and impact on your revenue. They give you a road map by forecasting your ability to repay all new commitments every step of the way. In return you get better sleep at night.

 

2. Your puzzled by what point you break even and when does real profit kick in

A good CFO breaks down the core financial metrics of your business in an easy and relatable way. They give you a fresh insight into the way you run your business and suggest alternatives for taking your business in a different direction.

Whether you take that advice or not is up to you but whatever your choice you know what the financial consequences will be with no “nasty surprises”.

 

3. Your thinking of selling but not sure how much your business is worth

It’s a big decision to sell your business but what is the “right price” for it. A lot of it is how transparent your financial numbers are. Are all your liabilities known and detailed as this is what a prospective client is after.  If these accounts are not reconciled, you run the risk of not knowing your business and can lose the confidence of a potential buyer.

A good CFO will make sure you understand your balance sheet, the numbers are clear and checked each month.

The worst thing you can do is to start negotiating with a prospective client only to have them back off if you are not across all the details of your accounts.

4. You lose track of all your expenses and never know if they are approved

Expense management is a critical part of any business. A CFO will critique your spending, in a good way. They will also make recommendations.

A CFO is there to “cut the fat but not the meat “of your expenses.

CFO’s foster positive relationships with key suppliers. They talk and negotiate with them, get better pricing & larger discounts in return for future commitments. This can make a real difference to your budget by reviewing your expense lines to make sure your business really needs them. The whole process can add lots of profit back into your business.

 

5. You want someone who is “accountable & “always has your back “

A good CFO focuses on solutions rather than problems. They don’t blame others but create systems to improve processes. They give you the confidence that business wheels continue to turn even if you are not there. More importantly they allow you to spend less time “In the business “and more time “On the Business”, looking at growth and new markets.

 

Chris Kondou 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 600 years of industry experience, with highly qualified and experienced specialists spread across more than 30 industry verticals. If you would like any more information regarding the Association of VCFO’s, please visit our website www.vcfoassociation.com.au

As an owner and leader of an SME business, your focus is always getting from point A to point B with all occupants arriving at your ‘destination’ safely and on time, to use a car analogy.

You’ve got better things to do than be worried about speeding fines, engine temperature, blown tyres, running out of fuel, which turn off to take and when your next service is due.

It’s your job to decide where to go and choose the ‘destination’. Your job to decide what sort of vehicle you will travel in, who you take with you in the car and who you trust to drive it.

A private chauffeur is polite, discreet, well prepared and better at managing the ‘white noise’ that comes with driving in heavy traffic, so you can arrive safely. Good ones will keep you updated on your arrival time, keeping you informed, but at ease that you are on track. They make you feel safe and de-stressed allowing you to make better use of your time by making some important phone calls as you travel.

But not all SME’s can justify the overhead that comes with a full-time private ‘chauffeur’.

Not many even need it. Most would be better off using an outsourced chauffeured limousine service as and when they need it.

A CFO is like your own private ‘chauffeur’. A Virtual CFO is like an outsourced chauffeured limousine service to use this analogy.

Virtual CFO’s see into your blindspots and show you where you are heading. They enable you to make informed strategic decisions about the future, so things stay on track.

If you are surrounded by chaos and uncertainty, reacting to ‘spot fires’ and being pulled away from what you should be doing, into dealing with finance problems, you’d be mad not to consider a one.

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

Everyone knows you cop a fine if you fail to meet all your compliance obligations, however there is no punishment you fail to manage your business finances properly.

It just happens that you can’t manage a business properly without global best practice financial management (budgeting, forecasting, reporting and cashflow).

The best companies all over the world run by elite leaders do not to confuse regulation with best practice. In fact, they deliberately decide to opt-in to best practice financial management because it creates shareholder value, not so they can avoid punishment.

Yet in Australia, most SME’s still associate the accounting profession with only tax and compliance services.

Maybe this is due to our convict colony beginnings, as it seems Aussies are better at being coerced than persuaded.

The paradox is that Aussie SME’s crave peace of mind, reliable profits and predictable cashflows, yet they have no visibility of where they are heading, or ability to make informed strategic decisions about the future, despite a squeaky clean compliance record.

Instead of making informed decisions about the future, they trawl over historical compliance numbers hoping for ‘the answer’ to jump off the page and land in their lap, whilst heading off into the sunset flying by the seat of their pants.

Maybe the best companies from all over the world are onto something?

David Dillon is the President of the Virtual CFO Association.

The Virtual CFO Association is an award winning 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 25 industry verticals.

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

#VirtualCFO #smes #accounting

Sydney, 16th June 2022 –  we won the Network of the year ( Finalists 2020 + 2021).

President David Dillon had the honour of representing the Virtual CFO Association, getting on stage to accept the award, but this award goes to everyone who has shown faith and supported our struggle to increase awareness and push the VCFO cause.

In a strange twist, David Boyar, one of the original co-founders of the Association presented the gong sponsored by Change GPS.

A transcript of David’s speech :

“Well wasn’t expecting that – 3^rd time lucky 

Thank you very much everyone. Thanks to Accountants Daily for the award and especially thanks to the Virtual CFO Association members, who make it what it really is, I think this is a vote of confidence in what we’ve all been working towards. 

We want to be known as a resource for Accounting firms, that they can tap into to better serve their clients, enhance you client relationships, reduce risk and make more money. We think that the best value accounting combination for small businesses to have is a bookkeeper, a virtual CFO with Industry experience and a tax accountant working in harmony with each other. Egos to the side and clients at heart. 

Thanks very much”

Afterwards,  David said he wished he’d spoken a bit longer. And yes, that’s a kilt David is wearing.

Whilst this is definitely a few rungs below a Nobel Peace Prize, these are the ONLY profession wide awards in Australia and people flew in from all over the country. There were over 500 people in the room and people are starting to notice us.

 

Does End Of Financial Year fill you with apprehension and a nervous sweat?

It’s like your in direct sight of a rampaging bull headed straight at you and you have nowhere to run or hide.

For the uninitiated End of Financial Year or EOFY abbreviated is that time of the year when your business calls time on it’s scorecard and assesses it’s financial performance for the year whilst getting ready for the new one coming.

EOFY doesn’t have to be scary and here are 7 things you can start doing today to take the fear away.

1. Know your Balance sheet

This is where the numbers of your business tell a story. Every Asset and Liability should be reconciled so you know exactly what money is due to come in and money to go out. It is good Financial Practice for all Balance Sheet accounts to be reconciled each month, so you know where the numbers are.

One client had forgotten a $10,000 debt sitting in their debtors for over a year. How can you forget something like this? Well, it happens if no one is reconciling your debtors, especially when the focus is always on shiny new customers, sometimes forgetting about the old ones.

2. Time to Take Inventory

For a product-based business this is critical as inventory sitting in your warehouse is where your excess cash is. Counting what you have, makes you aware of how long it has been sitting there and forces you to make decisions about what to do about it. Leave it sitting there for another year or discount it at a lower price to get rid of it. The choice is yours and your bank balances to make.

This “taking Inventory” also applies to service -based businesses. You can count your software licenses, your subscriptions and assess whether you still need all those Adobe Photoshop subscriptions, chances are you don’t need all of them.

3. Insurance Risk

12 months is a long time in business, how has yours changed during this time. New Customers and new markets? You need to make sure you are protected, and you are minimising your risk profile.

A business can move to new premises during the year and then latter realise that in the event of a fire they are not covered because they had not disclosed the new location to their insurer.

The motto of EOFY is tell your Insurer Everything, pretend you are going to confession, leave nothing out to make sure you are covered.

New offices, new cars…tell them everything.

4. Check your Data

Data is one of the most valuable assets of any business. It helps you make decisions to help boost revenue and make you more efficient. Most businesses are riddled with Duplicate Data !

Is that Anne Smith or A. Smith in your customer listing?  No wonder email campaigns get no traction. Get your data clean and remove the duplicates. Run your customer listings and remove the duplicates.

Don’t forget to check your Physical Data as well. Is your data secure?  Is your server still under warranty? Is your data protected as best you can from Cyber Security threats?

5. Are your transactions up to date?

Make sure all your invoices are up to date & you have paid your taxes on time. Talk to your bookkeeper to make sure all transactions are posted in your accounting system.

You have only days to go before June 30^th so you need to make sure the profits you show reflect all your business costs during the year.

Don’t be that business who closes the year off only to find latter that additional expenses from last year have come to light that throw out your previously expected profit result. Make sure you are up to date, always and no surprises when the Auditors come calling.

6. Dust off your Financial Plan

How certain are you that you will be making profit next year,I mean really.

The economy is riddled with challenges, rising prices, cost of living and wage pressures, increases in electricity, the war in the Ukraine…the list is endless.

Your financial Plan must factor in all these shocks so your business stays resilient and out in front.

Fail to Plan and you can Plan to Fail is an all-too-common catch cry.

Do you know that 2 out of every 3 businesses fail after 3 years due to a lack of planning.

A sound Financial Plan targets next years revenue and expenses.

What sales are you going to achieve next year, realistically and at what price can the market afford. Remember without a sale you have no business, so you need to get this right. How much money do you need to spend to make these sales – marketing, wages and overhead expenses like rent must be reviewed to ensure enough of a profit is being generated and as a business owner you are getting an appropriate return on your Investment.

7. Hire a CFO

A CFO will make sure all of these things are done not only before EOFY but throughout the year.

You need to know how many sales you need each month before you break even and cover your costs.

You need to know what your cash position is going to look like in 6 months’ time so you can plan for and fund future growth of your business as well as making sure you have enough to pay wages each month.

That way you can sleep well at night, focus on what you do best, run your business and make sure you are all prepared and no longer work up a sweat over next year’s EOFY.

Chris Kondou 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 600 years of industry experience, with highly qualified and experienced specialists spread across almost 30 industry verticals. If you would like any more information regarding the Association of VCFO’s, please visit our website www.vcfoassociation