CFO for Hire has successfully assisted many organizations in solving problems and in improving results. The following are just a few of the success stories of CFO for Hire’s clients. Challenges:
Challenge: Unsatisfactory Profitability and Growth
The major issues for this medium-sized retail business were carrying a heavy debt load, and constraint of working capital. The organization had poor performance, and was not making profits as would be expected for the more than 8-year-old company with healthy revenues. One obstacle was the competency level of the business manager. While this individual had many years of accounting experience, the skill set more closely resembled that of an accounting clerk – not an expert in financial management. The organization’s main goal was growth.
CFO for Hire’s initial efforts were to identify the weaknesses in the existing accounting process, address the incomplete book status, and reconcile accounts for month end reports. During the implementation of new procedures and systems, the business manager resigned, knowing his skill set would not meet the objectives of the organization. The next step was to implement systems and processes for accounting functions, and initiate monthly analysis of cash flow, month end reports and financial status. Additionally, CFO for Hire began conducting quarterly shareholder meetings to review results and identify future goals.
The organization “turned the corner” and, within one year of starting work with CFO for Hire, is now making a profit. Cash flow has improved, the company is paying down its debt and strengthening their balance sheet. Additionally, the company has opened three additional retail locations, and is now the largest independent retailer of its type in the region.
The internal management was committed to improvement, and willingly followed the recommendations of CFO for Hire. Additionally, their commitment continued beyond the initial stages; the organization perpetuated the improvements and maintained its course.
Challenge: Accounting Department Turnover & Lack of Leadership
This large not-for-profit organization at one time had a Controller/CFO. When that individual left, a CPA was brought in to address day-to-day concerns, but there was no leadership in the finance department. This led to a number of issues, including:
• Payroll reports two quarters behind
• Finance department lacking management
• No bank reconciliations for more than six months
• High turnover
• No training on an implemented payroll system
• EFTs not reconciled within more than 10 accounts
• Cash flow problems
• No accounts receivable functions performed
• Financial audits identified multiple shortcomings
Fiscally, this organization was approaching crisis levels.
CFO for Hire had a number of initial objectives, many of which required immediate attention. They created an action plan to initiate some of the needed changes in the organization. One of the first accomplishments was to bring payroll reports up-to-date. Other initiatives included addressing cash flow problems, incorporating accounts receivable functions, and developing a process for payroll.
Over the course of several months, the CFO for Hire team, which included a payroll specialist, an EFT specialist, and a Controller/CFO specialist, were able to effect a significant turnaround of financial status for the organization. The organization stabilized, resolved payroll reports issues, and adopted new accounts receivable and payroll processes. CFO for Hire also aided the organization in selecting their own full-time controller, and imposed a smooth transition for the new hire and the organization.
Challenge: Lack of Policies, Procedures & Documentation
The organization had recently lost its bookkeeper, and thereby its accounting department. None of the management staff had any accounting acumen. Upon initial investigation, CFO for Hire determined there were multiple accounting tasks that had not been completed while the previous bookkeeper was on staff. Among the work left undone were bank reconciliations, proper general ledger postings, and audit work papers. Additionally, there were no written procedures and no way to determine what process was being utilized to track, record and perform accounting functions. This organization, like many other private corporations and other non-profits, had well-meaning but ill-equipped personnel in the accounting role.
CFO for Hire initially acted as an “interim fix” to accomplish day-to-day functions; organized the accounting processes, reconciled the balance sheets, and performed updated bank reconciliation, in addition to fixing improper postings. Within two months, CFO for Hire produced an accurate, clean income statement and a balance sheet for the organization’s Board of Directors.
CFO for Hire prepared a formal presentation, including the beginning trial balance and revised trial balance; errors were corrected in every account; and the revised trial balance was accepted as the updated balance. Next, CFO for Hire wrote procedures for the organization’s accounting personnel to provide a complete picture of what was necessary to balance the organization’s books.
Soon after, the organization hired a new individual to fill the accountant position. CFO for Hire trained the new staff member for two weeks on procedures and processes to affect an easy transition. CFO for Hire then provided oversight of the new accountant.
Challenge: Helping New Owners Grow a Manufacturing Company
When a 50+ year old manufacturing company was sold; the new owners took the time to evaluate the current operations and get to know the employees. They quickly realized that the accounting processes and the financial reporting needed to be improved for them to grow their business. Because finance and accounting was not their expertise, the new owners called in CFO for Hire to assess the accounting team and to discuss their plans for growth.
Our initial assessment showed that accurate information was being reported but the information was not being delivered timely and it was lacking some of the crucial information needed to help the new owners expand the business. Part of the issue was that the prior owners were the default leaders of the accounting team and they were not as interested in growing the business, so the timeliness of financial reporting was not a priority.
CFO for Hire placed a part-time CFO at the company who became the leader of the accounting team to improve the timeliness of the financial reporting and to produce meaningful financial reporting with the information needed to help the new owners better evaluate the profitability of the various product lines.
Over the seven years CFO for Hire was engaged with this company, we helped the new owners grow the business from $7 million to $30 million. When our services concluded, we helped the owners sell the company for more than seven times its original purchase price.
Challenge: Incomplete & Inaccurate Accounting
This not-for-profit client had a small office staff, a Board of Directors, and several committees including an executive committee and a finance committee. The organization had a Business Manager and an accounting “consultant,” but was in need of a bookkeeper to address general accounting and bookkeeping duties. The client had also recently undergone a particularly challenging audit, for which auditors spent an exorbitant amount of time working through the available material to even produce a financial report to begin the audit process. The auditors recommended that the organization seek the services of a skilled bookkeeper. While the accounting consultant had some expertise, the individual did not possess the skill set necessary to handle all of the daily procedures, establish processes to input information, or keep track of the many different revenue sources or expenditures.
CFO for Hire met with the organization and began work roughly four months before the end of the organization’s fiscal year, with a goal of reconciling and balancing each and every item of the client’s financial statement. Bank accounts were unreconciled since the completion of the audit. All bank accounts were reconciled; all deposits, sales, payroll and other statements were thoroughly documented and balanced, and a process was developed with the organization’s management to ensure continuity. Additionally, processes were developed to address the client’s many revenue sources, including sales, grants, and deferred or pre-paid revenue.
The organization is now able to present accurate and complete representations of their finances to their Board, Committees and auditors. Prior to CFO for Hire’s intervention, 50 journal entries were needed to balance financial statements for their annual audit. After the first year working with CFO for Hire, they required only 10 journal entries. For this year’s audit, they are anticipating less than 5. The accounting and financial software has been set up with appropriate administrative privileges. A procedural, step-by-step system has been implemented for all departments; monthly balance sheets are reconciled, with work papers for every item. In addition, the organization can now prepare budgets with a full understanding of accurate financial status and statements.
The organization continues to seek CFO for Hire’s assistance in future projects, including analysis, evaluation of specific areas of revenue and expense, and ‘top level’ financial consulting.
Challenge: Evaluating Accounting Software & Needs Assessment
This medium-sized client had budgeted approximately $10,000 for a new accounting system. They called on CFO for Hire in a consulting capacity, to make recommendations in identifying new software and strategies for implementation. The client’s goal was to mirror at least the same options as they had currently, while achieving better reporting, job costing, and time tracking. At the time of the consultation, the organization was processing minimal accounting transactions.
CFO for Hire began the consultation process by conducting in depth interviews with the company’s main principals, learning more about the existing processes and the organization’s goals. As a result of the thorough interviews, CFO for Hire determined that the company needed no more than a $1,000 upgrade to their existing accounting software, and a time tracking package that could be integrated with the upgraded version.
The client saved considerable funds by utilizing CFO for Hire’s accounting software expertise. Additionally, during the course of investigating accounts, personnel and time records, fraudulent behavior was discovered. CFO for Hire’s personnel handled all daily accounting functions after the employee was dismissed, assisted in the interviewing and selection of a replacement, and trained the new hire upon job entry.