Archive for January, 2010

Accounting 101: The Business plan is not complete until…

January 13, 2010

cash shows a positive balance – you cannot operate with negative cash.

Your projections will only be as dependable or realistic as your assumptions.

  • Plan sales forecasts as breakeven to start the cash flow analysis, then increase sales as realistically as possible – you have nowhere to go but UP
  • Don’t use your “pie in the sky” “best case scenario” sales projections, you will have nowhere to go but DOWN.
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What are your expectations of your company’s controller or CFO?

January 5, 2010

The answer, of course, will vary from company to company. The size and culture of the organization will dictate the tone of the answers. Having said that, here are some basic differences in the two roles:

Controllers are the people who actually will be responsible for the day to day accounting & record keeping. Depending on the company, they can perform those duties as “hands on” or supervise a staff. The major roles would be:

•Be the internal financial consultant
•Serve as the conscience for business ethics
•Ensure the control system works
•Inform the stakeholders on how the company is doing financially
•Keep interested third parties supplied with adequate information
•Be the main contact with those interested third parties
•Add value by making overhead functions cost effective and fully supportive, while ensuring efficiency in the supply chain
•Provide insight and suggest courses of action

The CFO is responsible for the overall strategic leadership of the organization. The CFO is the one asking those questions that others are reluctant to ask. The CFO is:

•The true conscience of the company
•The one willing to raise issues and counsel other leaders on the viability of their goals, plans & policies
•The one without any other agenda or bias other than the success of the company

Of course in some small organizations, there may be one person who holds both hats – Controller/CFO.