Gross sales growth can blind business owners to a multitude of problems. Managing a growing company requires keeping a disciplined focus on keeping expenses and overhead under control. It is easy to be lulled into complacency when increasing sales seems so easy. This complacency can lead to a lack of disciplines which creates a culture of loose spending.
Understand the Details of Your Agreements
When analyzing financials, when we see expenses growing faster than sales, we examine costs carefully and advise clients on areas to cut in order to pull costs back in line. Through our B&V CFO Advisory work with clients, we have noted the following tips to get control of your cash:
- Read, understand and take full advantage of creditor payment terms. Do not issue payment prior to the payment date, and push terms if you have the power to do so without impacting your company’s brand.
- Move away from checks as they are the least cost effective and highest risk payment method. Use electronic funds transfer or ACH methods of payment to make payment on the last day they are due. By paying on the last day of the term, you will remain current with vendors while having access to your funds as long as possible.
- Maintain constant communication with your suppliers so they are aware of your financial situation. When you need to use a portion of the goodwill you have created, you may require the trust and understanding of your business partner.
- Tread lightly when evaluating discounts and earlier payment terms by vendors. Although there can be benefits that reduce your overall costs, in many instances these can be expensive loans to your suppliers. The details matter.
- The lowest price isn’t always the best deal when choosing suppliers or service providers. Flexible payment terms along with quality considerations can improve your cash flow more than the lowest prices.
ACT and Engage
As we have consulted with clients and business owners during 2020, the steps have been the same. We help clients assess and engage their specific circumstances and then advise clients to focus on the specific controllable areas that impact the bottom line. One of the primary areas of focus for both us as an advisor and the client is gaining a clear view through the cash flow management process.
Our B&V CFO Advisory Services team works with business owners to ensure a rock solid accounting foundation, actionable cash flow management services, and strategic Controller and CFO advisory support to mitigate brand damage risk. Our accounting, regulatory and financial expertise provides business owners comfort that their financial health is well handled while the owner focuses on driving the company forward.
Our Part of Your Solution
All businesses have a need for cash flow analysis and projections. Our B&V CFO Advisory solution provides experienced Controllers and support team members with experience in cash flow analysis and establishing best practices. Whether supporting your accounting team or serving as your outsourced accounting and finance function, we assess the issues, choose the best solution option available, transition into solving the issue and engage in the process. We are part of the solution.
Our experience has shown us that our CFO Advisory services generally represent 60 to 75% of the cost of a fuller sourced, on-site accounting controller’s salary, benefits, and bonus. We engage our clients with a highly experienced team at a fraction of the cost of an in-sourced team. Our dedicated CFO / Controller, Accounting Manager and support staff is always there to answer questions, provide a structured control environment to protect your assets, and focus on helping you understand and mitigate your financial and operational risk.
If you are a service based business:
- In need of financial expertise and guidance,
- Desiring a cost effective alternative to a full time Controller / CFO
Our B&V CFO solution may be the best option. Our aim is to take care of your strategic finance and accounting needs so that you can take care of your business.
Interested in our CFO / Controller Advisory Services, call us at 713.667.9147 and ask for Kevin Stewart or Jana Kelly to schedule a free 60 minute consultation.
About the Author
Kevin Stewart is an accounting executive within professional services, public and private growth companies. He has 20 years of experience turning around and building accounting and finance teams to fix the sins of the past, stabilize the now and create organizations to support growth. His deep finance, accounting and compliance expertise helps business owners focus on what they do best – run and grow the business. As your Chief Profit Officer (CPO), he will help improve your profits by focusing and advising on the controllable financial aspects of your business.