Tag CFO Services

5 Key Accounting Questions Business Owners Should Ask

0 comments By TRMoore Filed in Business Advisory, General Tagged with , , , , November 22nd, 2011 @ 3:07 pm

by Jennifer Mailhes, CPA, Consulting Partner, TR Moore & Company

Most companies could benefit greatly from having a CFO on staff, but for some closely held businesses, there isn’t enough work for this function to be full time, and it usually isn’t a cost effective option. Regardless of whether you do or don’t have a CFO, there are five key accounting questions you should be asking yourself: 

  1. Are you getting timely financial information? You should be reviewing sales data, expense information, daily or weekly flash reports or dashboards, and financial statements on a consistent basis. This hindsight view of your financials can give you meaningful data to help you correct problems or capitalize on opportunities. And daily or weekly reports can provide indicators of how your business is doing during the month. If you aren’t reviewing this information on a consistent and timely basis, you could be repeating poor practices over a period of time or continuing to lose out on opportunities.  
  2. Are you getting any forward-looking information? Data that can provide you with valuable foresight includes:
    •  Sales numbers — These can reveal delays in manufacturing or service, management issues that need to be corrected in order to hit your numbers or adjustments that need to be made to ensure profitability.
    • Orders in the pipeline or backlog — This will show if you have enough orders to hit your revenue goals.
    • Cash-flow forecasts — These can help you predict if a cash-crunch is likely and determine how purchases should be financed, whether you will need to draw on a line of credit, etc. 
  3. Are you looking at trends? Monitoring areas such as bank ratios, fixed expenses, margins and collections can help you to identify problems before they become significant issues, benchmark against your history and easily see the impact of seasonality. Additionally, the reporting graphs used for trending are easy to read, making it easier for others in the company to make use of the information.
  4. Who’s answering your high-level questions? Whether addressed by your CFO or an outside resource, the following types of questions can give you insight you may have overlooked and help you plan financially for changes and decisions before you make them: 
    • I’m thinking of adding a new business line; what impact will this have on my business’ numbers?
    • If I bring on a large account at a lower margin than my typical, can I make money on it or not?
    • Is it time to replace my equipment, and should I buy or lease?
    • Am I making profit returns consistent with my industry? 
  5. Do you have effective oversight and backup on key functions? Employees should be cross-trained on tasks such as paying bills, running payroll, handling deposits and billing customers. Additionally, it’s a good idea to have some controller-level backup. Having these areas sufficiently covered will help to ensure you continue to receive timely financial information and meet bank deadlines. In addition, if these tasks fall behind due to turnover, it could take you 30 to 60 days to get a new employee up to speed.  

As the Consulting Partner at Doeren Mayhew firm TR Moore & Company, Jennifer Mailhes  guides Houston business owners and their management teams in areas such as strategic planning, accounting analysis and CFO support, and business advisory services. For more information, contact us.

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SlideShare: Growth Management for the CFO/Controller

0 comments By TRMoore Filed in Business Advisory, General Tagged with , , , , , September 28th, 2011 @ 5:40 pm

Consultants Debbie Putnam and Brian McElroy provided insight into growth management at Houston Society of CPA's CFO/Controller Conference

TR Moore & Company consultants Brian McElroy, CPA, and Debbie Putnam, CPA, provided tips for managing company growth from the CFO/controller’s perspective Sept. 23 at the Houston CPA Society’s CFO/Controller Conference. Highlights include:

On Hiring

  1. Determine hiring needs and communicate them to management by documenting the hours needed for accounting tasks, having your employees do the same, then comparing the two.
  2. Ask yourself a few questions:
    • Can you realign tasks with existing resources to get more work accomplished?
    • Can current cash flow sustain hiring?
    • If not, is your need part time or full time? Temporary or long term?
    • Are your competitors hiring?
    • What are the risks of not hiring (i.e., not billing customers timely, delayed month-end close, not meeting bank requirements)?

Access the presentation for more, including sample templates for documenting tasks.

On Outgrowing Your Accounting System

Signs include:

  • Staff keying in the same data more than once
  • Use of Excel spreadsheets vs. system-generated reports
  • Month-end close longer than five business days
  • And more

Cost vs. benefit considerations include:

  • Use the 1 percent rule, i.e., annual revenue is $25 million, budget $250,000 for a new system
  • Consider the cost of consultants and employee resources
  • Consider software, hardware and the annual cost going forward
  • And more

Access the presentation for more information, including client system implementation examples and best practices.

On the Big Picture

Ways to provide insight to  management as your company grows include:

Access the presentation for more information, including cash flow fundamentals and example KPIs by industry.

Growth Management for the CFO/Controller

Brian McElroy and Debbie Putnam work in the Consulting Division at TR Moore & Company, where McElroy focuses on meeting the comprehensive accounting and management advisory needs of small to mid-sized business clients, while Putnam provides CFO- and controller-level support to a wide variety of privately and closely held businesses. Contact us for more information.

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Jennifer Mailhes Talks Baseball & Accounting Basics

0 comments By TRMoore Filed in General Tagged with , , , , , , September 6th, 2011 @ 11:06 am

Hear more from Jennifer Mailhes at our Boost Your Business Value Boot Camp on May 10

If you’ve met Jennifer Mailhes, you probably recognized quickly that she’s not your typical CPA. From an accounting generalist background to a partner role at TR Moore & Company, Mailhes’ experience has resulted in a unique ability to relate to the business owner and the CFO/controller alike – a strength that has earned the trust of clients who consider her part of their management team. Also a marathon runner and avid sports fan, this Boost Your Business Value Boot Camp series speaker shares her insight on cash flow challenges, how business is like baseball and more:  

  1. What inspired you to choose your profession?
    My first job out of college was working as an auditor for an accounting firm that also had our department focusing on tax work.  I gained a well-rounded background in that environment, and eventually morphed into the person who took on special projects. After doing that for nearly five years, I felt consulting was the next logical and natural step for me. Today, I enjoy providing clients with more than a hindsight view of their financials; I not only help them put the metrics in place to monitor how the business is tracking, but also understand those results so they can make better decisions about the future.
  2. What are you reading right now?
    I’m actually reading Moneyball by Michael Lewis for the second time. I went to an Astros game with a client who mentioned that a movie was being made based on this book, and now I’m reading it again out of curiosity as to how that can be done.  In reading it again, I’ve noticed that this book is basically about key performance indicators, but in baseball terms. The whole premise is treating baseball like a business by ignoring conventional wisdom and assumptions and instead measuring the right things that  really drive player performance.In the book, the Oakland A’s organization actually tracked and valued alternative characteristics that enabled them to be a competitive team at one-third the payroll of the New York Yankees. Usually, the examples with our clients are not quite this extreme, but the point is that by focusing the indicators of a business on the aspects you have to get right, versus what you think you should track, can create great efficiency and savings.
  3. Tell us about a breakthrough moment you’ve had with a client, where you really accomplished something great for the business together.
    I had a client who owned two companies, but was actively involved in only one business. The other business was run by the controller, who handled the day-to-day functions, including the accounting work. The company purchased an accounting system, but wasn’t satisfied with the seller nor how the system was implemented.  I put on my problem-solving cap, learned the software and helped the controller understand the system and effectively use it to better manage the company’s processes. She was a bit technology adverse, and at the time, would not even keep a computer in her office.  When I noticed that she had finally moved the computer into her office, I knew that we had achieved something big. She mentioned to me how much she enjoyed only working 40 hours a week as opposed to the 50 to 60 hours she worked before we improved her efficiencies.
  4. What is currently trending in your industry?
    I’m seeing a lot of my clients’ businesses picking back up, which is causing their cash flow to be tight. The impact has been both positive and negative, because while businesses are more profitable, they are having trouble figuring out how to fund increased sales.The key to overcoming this challenge is proactive planning. I have a client who has to order more product overseas and in larger quantities to keep his margins up. We conducted cash-flow planning to stagger purchases in a way that doesn’t eat up his cash and worked with him and his banker to increase his line of credit. This helped him reduce his cash requirements, ensure things were being funded correctly, gain terms when possible and really think through the whole cash management cycle (more about this at our Sept. 29 workshop).
  5. Your workshop sponsorship is helping to fund a scholarship for the University of Houston’s Wolff Center for Entrepreneurship. Do you have advice for aspiring business owners?
    At a minimum, review your financials on a monthly basis and review reports with your management team. This will enable you to create plans for action and follow-up, as well as accountability for activities discussed in meetings. Talk to business owners in your desired field, develop an advisory board, attend networking events and, most importantly, plan by function, not by person.

As the Consulting Partner at Doeren Mayhew firm TR Moore & Company, Jennifer Mailhes assists business owners and their management teams in areas such as strategic planning, CFO services and accounting analysis, and business advisory services. Hear more from her at our Boost Your Business Value Boot Camp: The Profitability Factor on May 10. Read more, and register by contacting Melinda Genitempo or Geoff Gallo at 713.789.7077 or info@trmoore.com.

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Tools & Tips for CFO/Controller Efficiency

0 comments By TRMoore Filed in Business Advisory, General Tagged with , , , August 11th, 2011 @ 3:39 pm

by Jennifer Mailhes, CPA, Consulting Partner, TR Moore & Company,  A Doeren Mayhew Firm

I enjoyed speaking at the Montgomery County CPA Forum breakfast this week on the topic of how the accounting staff inside small to mid-sized businesses can work smarter and become more invaluable to their company management. For those who missed it, I wanted to share a recap and handout, as well as some other recent posts on the topic:

As the Consulting Partner, Jennifer Mailhes helps accounting staff streamline processes and provide more valuable financial information to their management through our CFO and Controller service modules. For more information, contact us.

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CFOs/Controllers: 5 Tips for Communicating More Effectively With Management

0 comments By TRMoore Filed in Business Advisory, General Tagged with , , , August 3rd, 2011 @ 9:56 am

by Jennifer Mailhes, CPA, Consulting Partner, TR Moore & Company, A Doeren Mayhew Firm

As a CFO or controller, you hold the scorecard on the company’s financial performance. But if you’re stuck behind a desk rather than developing relationships with key players in the business, you’re missing out on the opportunity to make a significant impact with the information you control.

 Changing the way you interact with company leaders is a good first step. These five tips will get you started, and you can read more “Rules for Improved CFO/Controller Efficiency” on our website:

  1. Get to know what’s happening in the company, including at the top:
    • What’s the owner/manager doing? How does it affect your job? How does it affect the company?
    • Consider trying to schedule regular meetings with your business owner to discuss what’s going on in your department and with the company.
    • Attend other department meetings and interact with other department heads.
  2. Get creative with your solutions to what management is trying to accomplish. Always ask what they are trying to accomplish—there might be a much easier way to achieve the goal. For example, if you’re asked to produce a specific report, think about whether you have something similar already created. Consider showing them how to interpret or modify existing reports or processes rather than creating new ones.
  3. Always ask, “What’s my deadline?”
  4. Discuss assignments relative to other priorities: “Is this more important than …?”
  5. Have a monthly meeting to review financial statements and other reports with the owner/manager and other key management team members, if appropriate. 

Read the full article on our website, and hear more at the Montgomery County CPA Forum’s Aug. 10 breakfast, where I’ll share tips and best practices for working smarter, not harder, in your role as CFO/controller. Register.

 As the Consulting Partner at Doeren Mayhew firm TR Moore & Company, Jennifer Mailhes  guides Houston business owners and their management teams in areas such as strategic planning, CFO services and accounting analysis, and business advisory services. For more information, contact us.

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