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“This too shall pass”

“This too shall pass”

If history has taught us anything, it’s that the only constant in life is change.

Over the course of the last century alone there have been a litany of challenges and numerous disasters, all of which have one thing in common – they’ve all passed.

Some months from now – it’s impossible to predict the true timeline – the current situation we face with Covid-19 will too have passed. It will have left in its wake a trail of debris and destruction which we ought not minimise, but it will pass.

As the great German writer Goethe once said: “Fresh activity is the only means of overcoming adversity.” It’s a wonderful way to focus the mind on proactive, practical activity and look forward. To deal with things that you can influence and change rather than those you can’t.

As Chief Financial Officers part of our role is to use our knowledge of the past and translate it into actions that bring about a better future.

With 440 of us in the US and abroad, many of us spanning 3 or even more decades of service to SMEs, we have weathered many storms. We’ve also come out the other side.

And we have learned from those experiences that there are certain actions we must take quickly if we want to overcome adversity and put ourselves in a stronger position for when the storm abates. In the midst of the storm it can be difficult to make sense of what is happening. This is precisely the time to slow down for a moment, as hard as it may seem, and make some proactive decisions.

To address the negative, we can take it as read that the speed at which many industries will contract over the coming weeks will increase. Primary industries such as aviation, travel and tourism, events and conferencing, restaurants and pubs, will suffer devastating blows as will the supply chains they support. The ripple effect will affect everyone, in some way or other. These events are already in train.

While all that happens, as SME owners, we have to do whatever we need to do in order to weather the storm and come out stronger the other side.

And you don’t have to face that challenge alone. There’s a lot the government and banks are doing to help small to medium sized businesses get through the challenges of the coming weeks and we’re also here to help you navigate the options and put you in the strongest possible position when some sense of normality is restored.

Below are some key considerations, risks, opportunities and resources. If you would like us to help you navigate the options, we are offering a courtesy 1:1 Scenario Planning Call to help you get clarity around what you should be doing now to put you in the strongest possible position.

 

  1. Scenario Planning
  • If you are predicting a reduced demand what will be the impact on sales and cash?
  • What costs can be cut or deferred? Is there flexibility in the cost base that could partially offset a downturn in revenues?
  • Are there major capital expenditures which could be postponed?
  • Over what time period might you expect revenues to be reduced?
  • What impact might you expect in regard to late payments from your existing customers?

 

  1. Supply side:

  • Are you likely to be impacted by a break in supply of inputs/services from other businesses struggling with the virus?
  • How much contingency are you holding if supplies of inputs stopped/became erratic?
  • Are there alternative sources of supply if a supplier fails?
  • What is the likely impact on workforce – do you have a business continuity plan, can workers productively work from home/remotely?
  • Could you look at taking measures now to reduce the risk to your workforce; e.g. more virtual meetings rather than asking staff to travel?
  • Are you operating in an area which could be impacted by “lock down” measures e.g. city center, does the workforce travel largely by public transport (impact if closed/restricted), would the travel patterns of the workforce mean it would be necessary, for staff safety, to suspend travel to the head office/main site.

 

Demand side:

  • Potential impact on sales volumes – e.g. what is your level of exposure to consumer demand, are you B2B or B2C, are your corporate customers likely to be significantly impacted (airlines, cinemas, hotels, restaurants, attractions, events, etc.?
  • Any delivery issues for goods/services?
  • What are the contractual implications of failure to service customers (do they have a force majeure protection in contracts?)
  • Does the client have contracts which enable clients to claim force majeure and cancel commitments without penalty – worst case what might this mean in terms of the liquidity scenario planning.


Communications:

  • Who should you be contacting now – suppliers to see what contingency plans they have, customers to reassure, other stakeholders?
  • If someone has an issue, do they have the means to communicate with you?
  • Can you post messages on your website remotely if required as a means of keeping customers, suppliers notified?

Staff:

  • What is your policy on sick pay if staff have to self-isolate
  • Are there contingent measures that can be put in place to bring in temporary staff if necessary?

 

Miscellaneous:

  • Any business-critical single points of failure?
  • Can you switch your office phones to an alternative line?
  • What insurance arrangements do you have in place?

 

Prepare for the upside

 

All of the suggestions mentioned above constitute the day to day role of a CFO. These are things that companies ought to be doing as a matter of course, but of course, many do not.

 

The advantage of going through this process now is that it will enable you to build a better, stronger, more resilient business for the future. Whether Covid-19 or the next major recession, or some other unforeseen event, knowing that you have done all that you can to prepare your business will give you greater confidence in the future.

 

The future of work is all about remote working, flexibility, greater specialisation and outsourcing. The Coronavirus will increase the pace with which we transition to a new global model.

 

We encourage you to be cautious and use this time to spark ‘fresh activity’ and build a stronger, leaner business for the future.

 

We are here to help and are offering 1:1 Scenario Planning Consultations to help you make the right decisions to get you through the coming weeks and prepare you better for when the current madness subsides.

Business Growth - An Interview with Miami CFO Stuart Brown

Business Growth – An Interview with Miami CFO Stuart Brown

Stuart Brown joined The CFO Center in 2019, before this he accumulated more than 20 years of finance experience and has more than ten years’ experience as Country-level CFO for both International and Local Carriers. He has had a lot of success growing businesses he has worked for, so we thought it would be a good idea to ask Stuart for his top tips on scaling up a business:

 

What does growth mean in business?

With growth, what you’re really talking about is growth in sales. You’re acquiring new customers; you’re acquiring new market share. It’s vital to remember the importance of profitable growth. Sales, in and of itself, cannot be the only driver, you’ve got to have sales that are going to be generating positive cashflow and positive future earnings.

 

What is the difference between Organic growth and Acquisition?

Generally speaking, organic growth is business that’s being generated internally. The business is engaging in its working plans, it’s seeking new customers, it’s seeking to acquire that growth based on its existing business. When you talk about acquisition, the business is going out and purchasing a block of business. Sometimes that means actually purchasing another firm, purchasing another company, but it could be purchasing, for example, customer lists or purchasing a client base in some other way.  It’s a growth that is purchased and brought into the existing business rather than growth.

 

Are there different stages of business growth?

Absolutely! When a business is first starting out, that’s referred to as expansion, which is where the business is looking to establish its niche to gain its first customers. A lot of times it revolves around figuring out what works and what doesn’t work and there’ll be a lot of trial and error and mistakes that will be made along the way.

Once the business makes it out of that phase and has established the business model, it is in a classic organic growth phase. That presents a new set of challenges for business owners, because you’re scaling up, you’re moving from perhaps a single location to multiple locations. You’re building out your client base, you’re building out your employee base, and it begins to get out of the scope of perhaps a sole proprietor.

The final stage when you get to maturity is when you have an established market and you have procedures in place, and you know how to operate your business. That then presents a new set of challenges because it’s much more difficult to acquire new customers. Profitable growth is going to come primarily through efficiencies such as controlling expenses. Then as we mentioned before with acquisitions, if the business finds that all of the opportunities for growth have been exhausted, it may look to acquire rivals.

 

What are the main issues that can come up when growing a business?

What happens for a lot of entrepreneurs, in various industries, is that the business starts as a result of a brilliant idea and a sole proprietor can manage it perhaps just in one single location. For example, if it’s a retail store, perhaps they have a single boutique store, but when that store becomes successful and it becomes perhaps 10 stores, that presents more of a challenge because now it’s outside of the scope of that original entrepreneur to manage everything directly. He or she cannot be aware of everything that’s going on across the small stores. That is then the time they need to bring in some management to help them and they need to try to figure out processes and procedures and standardizations to make sure that everybody is operating off of the same set of instructions. As a company continues to grow, that gets to the scope where it’s even too large for a small set of managers and it becomes much more important to have made a driven analysis, professional management and have established procedures for how the business is going to operate.

 

How does a CFO help with any of the stresses of scaling up? How can they help in general with scaling business?

I think CFOs are uniquely positioned to do this and CFOs are accustomed to looking at the world through a financial lens. Understanding how different actions and how different situations will impact the business from a financial point of view. We’re trained to look at things from both the long term and a short-term perspective. Of course, you want to make sure you get your monthly numbers and your quarterly numbers, but you also want to ensure that the business is well positioned for the long term. You want to look at it from a top line and the bottom line. I mentioned earlier about sales, but you also have profits. It’s not good enough to have growth in sales if you’re losing money. You also want to look at it from a cashflow perspective as well as from a P&L perspective. Many times, something that creates a short-term boost on the profit margin may have negative implications for cash and vice versa. A good CFO understands those two situations.

 

What are your three top tips for business owners wanting to scale up?

My first tip would be to focus on the fundamentals. You have to understand your business and understand what the metrics and profit drivers are. The second tip is to trust the advice and to trust the professionals that you have around you. Get good people in, bring in subject matter experts and be willing to let go. Lastly, my third tip is that successful business owners need to have fun with their businesses. When they started their business, it was presumably something that was enjoyable – try to keep it that way!  Make it something that’s fun and fun for everyone that’s working in the business.

Michael Meyer - Mid-Atlantic Region, Regional Director/Principal 1

“For the first time in my life I am a part of a group that is dedicated to supporting one another.”

With 30+ years’ CFO experience working in corporate both in the US and globally, Michael was tired of the insecurity of employment but hadn’t explored a career in consultancy. A month after his twins were born, he was made redundant in his current position. With a supportive wife and a nudge in the right direction, he turned to the world of consultancy.

For many years, he bounced between consulting and employment and learnt a great deal. With consulting, he enjoyed the chance to make a real difference but missed the team spirit and camaraderie that working in corporate provided. So, in November 2016, Michael joined the CFO Center and hasn’t looked back.

“Even when you are in a company, and part of a team, you are the only CFO and so you have no one to share ideas with or get help from. Here, colleagues, far and wide, have supported me to help me win clients and solve problems. In return, I am able to offer assistance to colleagues around the world as, collectively, we have an unparalleled wealth of experience.”

If a client no longer needs his services, Michael is no longer in a binary situation, as he is only losing part of his pay, and with the help of The CFO Center he can quickly replace that lost revenue.

Does any of Michael’s story sound familiar?

Could now be the right time for you to develop your portfolio career?

We’d love to hear from you – https://www.thecfocenter.com/join-the-team/

Top 9 Advantages of a Part-Time CFO

Top 9 Advantages of a Part-Time CFO

The quicker you want your company to achieve its goals, the sooner you should consider hiring a part-time CFO.

That’s because a part-time CFO will provide your company with the high-level financial expertise necessary to scale up (things you and your team may not even be aware you need), for a fraction of the cost of a full-time CFO.

Hiring a part-time CFO provides your company with many advantages that really help it to grow and stand out in any marketplace. But here are the top nine advantages you and your employees and stakeholders can expect when you hire a part-time CFO.

1. Cost-saving

By hiring a part-time rather than full-time CFO, you can avoid the often-hefty recruitment and hiring costs (and the delays they inevitably entail). What’s more, you can hire a part-time CFO for a fraction of the cost of a full-time employee. You won’t have to offer a benefits package or bonuses to retain the appointee.

2. Strategic advice

Your part-time CFO will provide you with strategic analysis and support on every financial aspect of your business. A report from the Financial Executives Research Foundation (FERF) described CFOs as “critical to the success of start-up and early-stage growth companies” since they provide key insights.
It found CFOs play key roles in not only managing a young and fast-growing company’s finances but also in setting broader strategic goals and establishing and achieving financial and non-financial milestones.

What’s more, part-time CFOs can highlight potential threats or risks of which you and your team may be unaware or perhaps don’t know how to deal with.

3. Flexibility

You can use the services of your part-time CFO for what you need when you need it. That could be for a variety of different financial functions or a specific project. This means you and your CFO can tailor the role to suit your company’s needs at any time.

4. Multiple industry experience

Although you can choose to work with part-time CFOs who have direct experience in your given industry, you can also opt to work with those that have experience across multiple industries. The advantage will be that your CFO will provide you with access to networks and multi-layered insights that you might not otherwise have.

5. Crisis management

The loss of major contracts, customers or employees can be devastating for any business. Your part-time CFO will be able to help you and your team navigate your way out of the crisis. This could include producing short-term cashflow reports, identifying costs that can be cut, producing new financial forecasts, and helping with raising vital funds.

6. Sounding board

Running a company can often be a lonely, stressful experience for CEOs, according to the FD Centre’s Chairman Colin Mills in his book ‘Scaling Up How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash.[1]

He’s seen first-hand what pressure does to business owners.

“I’ve sat in sales meetings with entrepreneurs who had literally been brought to tears by stress and frustration and the feeling that it’s all too much.”

That’s where a part-time CFO can help. He or she can act as an independent sounding board for the over-burdened, stressed-out business owner. With their ‘big business’ experience, it’s more than likely CFOs can provide solutions to what can seem like overwhelming problems to the CEOs of growing businesses.

7. Mentorship for your team

Part-time CFOs help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors. They can also act as mentors to members of your existing finance team, guiding them where necessary and providing the advice they need to rise to new challenges.

8. Access to a national and international network

If you choose a part-time CFO from an organization like the CFO Center, you’ll benefit from the expertise from all the CFOs in its worldwide network. That’s hundreds of years of experience in every aspect of finance—all for a fraction of the cost of employing a single full-time CFO.

9. You won’t get left behind

If you’re still hesitating about whether now is the right time to hire a part-time CFO, consider the sorry tale of Kodak—a company that got left behind, despite once being one of the most powerful companies in the world.

Kodak was once known for innovation (being the creator of the Box Brownie camera, Kodachrome film and the Instamatic).[2] Here’s what’s remarkable—a Kodak engineer Steve Sasson developed the world’s first digital camera way back in the mists of time (actually, 1975). Okay, it was the size of a toaster, took 20 seconds to capture low-quality images which had to be viewed on a TV. But still… it had the potential to disrupt the market massively.

The company poured billions into developing the technology to take photos using mobile phones and other digital devices but delayed acting on it due to fears digital technology would destroy its film and photographic developing business. It failed to act fast enough and to identify the opportunities posed by digital technology.

On January 19, 2012, Kodak filed for bankruptcy protection in 2012, then exited its legacy businesses and sold off its patents.[3] It re-emerged in 2013, albeit in a vastly slimmed down version of its former self.

If you want to avoid becoming a post-script or salutary tale in your market, appoint a part-time CFO. He or she will provide you and your team with strategic help and advice to recognize threats and to seize opportunities—thanks to vast experience and expertise.

The CFO Center offer the services of part-time CFOs with big business experience who can use what they know to help your company achieve rapid yet sustainable growth. What’s more, they’ll help remove fear, confusion and stress from the entire process.

To discover how the CFO Center will help your company to scale up, please call us on 800 919 4022 or contact us here.

How it works

The CFO Center’s part-time CFOs use a proven framework known as the ‘12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company finance function and identify every problem area.

They will help you to understand your company’s finances and not only eliminate cash flow problems and identify cost-savings but also to improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers. To discover more about the 12 Boxes, click here.

Need help?

To find out how an CFO Center part-time CFO will help your business, contact us now on 800 919 4022. To book your free one-to-one call with one of our part-time CFOs, click here.  You can see how they add rocket fuel to any business here.

What people are saying

People are talking about what they really think of the CFO Center’s part-time CFOs. Find out what they’re saying on these short videos here.

Where are you going wrong?

You can identify strengths and weaknesses in your business in just nine minutes with the F-Score click here now. Just answer a brief series of questions, and you’ll receive an 8-page report that will reveal potential current or future pain points for your business. It will also help you to rate the performance of your finance function and uncover untapped opportunities for growth. Click here now to take the F-Score.

Got a Big Question?

Have a burning question for one of our team of CFOs? Just ask it here, and you’ll get an answer within 24 hours. The question must be finance-related (sadly, they can’t predict who will win Wimbledon).

[1]Scale Up: How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash’, Mills, Colin. BrightFlame Books, 2016

[2]The Moment It All Went Wrong for Kodak’, Usborne, David, The Independent, https://www.independent.co.uk, January 20, 2012

[3]Kodak’s Downfall Wasn’t About Technology’, Anthony, Scott D., Harvard Business Review

https://hbr.org, July 15, 2016

Where to Find the Cash You Need

Where to Find the Cash You Need

A lack of cash can not only stall your company’s growth but also place its very existence under threat.

It doesn’t matter how profitable the business may be; cash flow problems can place it under severe pressure, according to the CFO Center’s Chairman Colin Mills in his book ‘Scaling Up How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash.[1]

“You might think you’re immune from danger because your business is experiencing a high level of growth, but you’re wrong: expansion can exacerbate the problems caused by poor cash flow management,” he said.

“You almost always have to make investments and bring certain expenses on ahead of achieving the higher revenue and cash flow that comes with successful growth.”

It is the oxygen every business needs to survive.

“The stark truth is, without cash your business will be unable to meet its payroll obligations, default on payments to suppliers and creditors (payables), and ultimately cease trading.”

Fortunately, there are ways to find cash both from within your business (by improving processes, cost-cutting and selling off unused assets) and from traditional and alternative external funding sources such as banks, invoice factoring companies and crowd-sourcing platforms.

Getting the cash your company needs earlier rather than later can not only save you and your employees from unnecessary stress but also help you to achieve more rapid growth as the following example illustrates. One of the CFO Center’s American clients had over-hired which caused it to run into cash flow problems.

But with the help of the CFO Center, the company was able to survive the blip and then attract one of the ‘Big Three’ automobile manufacturers in the US—Chrysler—as a client.

“They were really bumping up against their credit line of $US500,000,” recalled a CFO Center’s RD in ‘Scaling Up. “We came in, restructured their financing and their forecasts, and in a couple of months we were able to get them a new line of credit for $2 million,” he said. “That effectively allowed them to invest in the growth of the company.

“A year after we were engaged, the client won a massive deal with Chrysler. Chrysler conducts vendor analyses on the financial position of its vendors, and this company got a green light across all areas that Chrysler reviewed them on.”

Look within your company first

While many business owners automatically look to external funding sources, it pays to look closer to home first.

“Most entrepreneurs don’t realize there is often considerable funding to support growth from within their own business,” says Mills. “That’s because the collection of customer receivables can often be improved through strong credit control and the level of stock holding reduced through improved systems and processes. In some instances, poor negotiation of supplier payment terms means less funds are available within the business to support scaling up.”

So before you pick up the phone (or click your mouse) to apply for external funding, consider the following methods for freeing up cash within your business.

Declutter

If the business has machinery, equipment or large amounts of stock that is idle, consider selling it or renting it to other businesses.

Remove unnecessary overheads

Look at all your overheads to see if they can be lowered. For example, consider reducing staff numbers, or not replacing employees when they leave or moving premises to get a more favorable lease.

The head of the Australian CFO Centre recalls how one part-time CFO was asked to help a fast growth branding business that had got into trouble with cash flow. Most troubling was a looming $500,000 (AUD) tax bill.

At the company’s headquarters, it was easy to see why the company was struggling: the carpark was crammed with ‘flashy’ company cars.

A conversation with the owner revealed he did not have a good grasp on his financials. He didn’t know how to improve his margins and had no idea how much his product was costing to produce.

So he was advised to sell the cars and make half the staff redundant.

“We were really hard with the guy; we took a firm line with him, but he did all the things we suggested he do to get his business back in order,” the part-time CFO said. “That was three or four years ago, and today his scaleup growth has delivered the cash flow and sustainability, to where he should have been if he had the financial insight beforehand.”

Negotiate better terms with vendors

Ask for more favorable payment terms from your suppliers. This doesn’t necessarily mean asking for reduced prices but could be as simple as requesting an extra seven days for your payment window.

If your suppliers refuse your request, look for other suppliers who can offer lower prices or better payment terms for the same quality of product.

Resolve late payment issues

Make your payment terms clear to minimize the possibility of late payment issues. Try to keep to the same terms for all your customers (for example, a 30-day window for payment of the invoice). Get agreement to your payment terms from all your customers or clients. Carry out credit checks on all new customers or clients. Ensure that invoices are issued promptly. Ideally, you should issue invoices by email on the day of completion of the job or project and ensure that overdue payments are pursued.

Get deposits for large projects or orders. Build a deposit (of anywhere up to 50% of the total cost) into your contract for large projects or orders. This is especially important if the projects or orders are likely to involve a lot of resources and time.

That way if the customer decides to cancel the project or fails to pay the balance on the project or order, you have at least recovered some of the cost of the resources and time you’ve already invested in it.

Look for External Funding

You should also consider external funding sources to help ease your cash flow challenges. There are a dizzying number of sources to consider, both traditional and alternative (which is why you should use the services of a part-time CFO to identify the best method for your company and help you navigate your way through any such process).

Apply for a bank overdraft

A bank overdraft has been the traditional form of funding for many businesses. But these days, banks are more likely to try to steer their clients to other forms of debt that provide the banks with more security.

While overdrafts are usually quick to set up, they have a major drawback, and it’s this: banks can call them in on demand.

Request a bank loan

The advantages of bank loans are that they are for a set term with regular repayments and that the banks can’t call the money back on demand. The downside is that banks will demand strong security for the loan such as a personal guarantee secured on the assets of the business or even the owner’s personal assets.

Use asset financing

Using your assets as collateral for the loan is one of the easiest ways your growing business can get access to quick cash. However, there is a drawback: not all assets are considered equal.

Typically, lenders will only consider assets that they can sell quickly if you default on the loan. Therefore, they usually want high-value assets with a low depreciation rate or high appreciation rate, and which are easy to convert into cash.

Get alternative financing

The alternative finance market includes a wide variety of financing models including peer-to-peer lending, crowdfunding and specialist finance providers offering products such as selective invoice finance and invoice trading platforms.

The benefit is that since they have greater flexibility than traditional funding sources they can often offer a faster turnaround on the right deals.

Invoice Discounting

The advantage of invoice discounting, in which banks and invoice discounting companies lend money secured against your debtors/receivables, is that you can borrow up to 80% of the invoice amount within 24 hours.  So you get the cash flow benefit and the rest when the money is collected.

The disadvantage is that it can cost more than overdraft or loan charges so it may have a bigger impact on your profit margins.

Peer-to-peer (P2P) lending

P2P platforms match lenders directly with borrowers so that you can borrow money from individuals. The huge benefit of this is that the rates are favorable and often much better than any other type of lending method. The disadvantage is that you will still have to undergo a credit check and possibly pay an application fee.

Equity-based crowdfunding

The way it works is that people come together on the crowdfunding websites to pool money towards a particular venture or idea in return for an equity share in your business. The issue with crowdfunding though is that it’s not as easy as some people make it out to be, as it requires months of planning and lots of marketing in order to get people excited enough about what you are doing to contribute money towards it. There’s also the risk that you don’t receive the amount you’re seeking, in which case any finance that has been pledged will usually be returned to your investors, and you will receive nothing. If you’re successful, there’s the risk you give away too much control in your company. This could have an impact later when you decide to sell the company.

The easy way to raise cash

Of course, you can make the finding or raising of cash a much easier process by engaging the services of a part-time CFO. For example, The CFO Center offer the services of part-time CFOs with big business experience who can use what they know to help you uncover or obtain the cash you need to help your company achieve rapid yet sustainable growth. They will help remove the fear and confusion from the entire process.

To discover how The CFO Center will help your company to get cash and scale up, please call us on 800-919-4022 or contact us here.

How it works

The CFO Center’s part-time CFOs use a proven framework known as the ‘12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company finance function and identify every problem area.

They will help you to understand your company’s finances and not only eliminate cash flow problems and identify cost-savings but also to improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers. To discover more about the 12 Boxes, click here.

Need help?

To discover how a CFO Center part-time CFO will help your business, contact us now on 800-919-4022. To book your free one-to-one call with one of our part-time CFOs, click .  You can see how they add rocket fuel to any business here.

What people are saying

To hear what people really think about The CFO Center’s part-time CFOs, watch these short videos here.

Where are you going wrong?

To identify strengths and weaknesses in your business in just nine minutes with the F-Score  click here now.  Just answer a brief series of questions, and you’ll receive an 8-page report that will reveal potential current or future pain points for your business. It will also help you to rate the performance of your finance function and uncover untapped opportunities for growth. Click here now to take the F-Score.

Got a Big Question?

If you have a burning question for one of our team of CFOs, ask it here, and you’ll get an answer within 24 hours. Please note the question must be finance-related (sadly, they can’t predict who will win the Rugby World Cup, Cricket World Cup or even the US Masters Golf Tournament).

[1]Scale Up: How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash’, Mills, Colin. BrightFlame Books, 2016

How to Avoid Sleeping Like a Baby (And Why You Should)

How to Avoid Sleeping Like a Baby (And Why You Should)

Babies, as any hollow-eyed new parent will tell you, often sleep for just a few hours at a time which is why ‘sleeping like a baby’ is a practice best avoided if you have a growing business to run and need to be on top of your game during working hours.

Instead, sleep experts recommend you look for ways to get between seven and nine unbroken hours of night-time sleep.[1]

That’s because sleep is believed to be crucial to your physical and mental well being. It’s essential for maintaining cognitive skills such as communicating well, remembering key information and being creative and flexible in thought, says Dr Justin Varney in an article for Public Health England.[2]

Insufficient sleep has a “profound impact” on your ability to function, he says. It makes you more vulnerable to infection and raises the risk of accidents and injuries.

What’s more, studies are beginning to show a link between a lack of sleep and conditions such as high blood pressure, heart disease and diabetes.

So, what can you do to ensure you get a great night’s sleep?

Almost every article you read on the topic will fail to mention what is arguable the number 1 strategy for a great night’s sleep… They’ll tell you to transform your bedroom into a technological-free zone (so no late-night watching of ‘Storage Wars’ or checking your Twitter feed before you shut your eyes). That’s as much to avoid too much stimulation before sleep as it is to minimize the amount of blue light you’re exposed to from some TVs, computer screens, tablets, smartphones, and LED lighting. The blue light can keep you awake by suppressing the sleep-inducing hormone melatonin.

Sleep hygienists (the name for experts in this field) also recommend you stick to regular bedtimes and avoid consuming caffeine and rich food in the last few hours before bed, and so on.

What most ‘sleep tips’ articles fail to mention is one of the best ways you can get your full quota of night-time sleep—that is how to deal with work-related stress which is one of the biggest causes of sleep problems. As the owner or CEO of a growing business, one of the best ways you can reduce your work-related stress is to hire an experienced part-time Chief Financial Officer (CFO).

Take the CFO Center’s part-time CFOs as an example. They all have many years of big business experience so that they can identify and assess the areas of risk in your business. More importantly, they can advise you on how to deal with such risks now and in the future.

Equally, part-time CFOs can highlight areas of risk that you are either unaware of or don’t know how to deal with. In other words, they’ll identify, quantify and help you to manage the risks your organization faces.

But they do so much more than that. They will also advise, analyze and implement processes and practices to ensure your organization performs better. They can provide strategic analysis and advisory support on every finance-related aspect of your business.

At any one time, they can be involved in all those areas of the business that have previously kept you awake at night: things such as reporting, auditing, tax planning, business planning, capital expenditure, working capital management, budgeting and exit planning. Your part-time CFO will work on your financial strategy and finance operations while also managing your tax planning, legals, compliance, outsourcing and banking relationships.

You can rest easy at night, knowing your part-time CFO will help you to improve your cash flow and profitability and provide the insight into how your business can move seamlessly to the next level.

With a part-time CFO on your side, insomnia and restless sleep should become a thing of the past.

How it will work

The CFO Center’s part-time CFOs use a proven framework known as the ’12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company finance function and identify every problem area.

They will help you to understand your company’s finances; eliminate cash flow problems; identify cost-savings and improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers.

To discover more about the 12 Boxes, click here.

Need help?

To discover how a CFO Center part-time CFO will help your business, contact us now on (800) 919-4022. To book your free one-to-one call with one of our part-time CFOs, click  here.  You can see how they add rocket fuel to any business here.

Identify strengths and weaknesses

Identify the strengths and gaps in your business in just nine minutes with the F-Score.

Just answer a brief series of questions, and you’ll receive an 8-page report that will reveal potential current or future pain points for your business. It will also help you to rate the performance of your finance function and uncover untapped opportunities for growth. Click here now to take the F-Score.

Got a Big Question?

If you have a burning question for one of our team of CFOs, ask it here, and you’ll get an answer within 24 hours. Please note the question must be finance-related (sadly they can’t predict who will win ‘America’s Got Talent’, or ‘The Voice’).

[1]How Much Sleep Do We Need?’, The Sleep Council UK, https://sleepcouncil.org.uk

[2] Is lack of sleep affecting your work?’, Dr Varney, Justin, Public Health England, https://publichealthmatters.blog.gov.uk , January 30, 2018

Why and How You Should Scale Up Your Business

Why and How You Should Scale Up Your Business

If you consider what sets companies like eBay, Alibaba, Netflix, Google, Starbucks, Apple, Cisco and Dell apart from other companies, their ability to continuously innovate and create high growth will probably come high on your list.

So should the fact they’ve all successfully transitioned from start up to scale up status without losing their ability to be dynamic and entrepreneurial.

Then there’s the fact they’ve helped create thousands of full-time and part-time jobs throughout the world. Twenty-three-year-old eBay, for example, employs 14,100 full- and part-time employees[1] while Google’s parent company Alphabet Inc. has 88,100 full-time employees.[2]

In his book, Scale Up!, the CFO Center’s Chairman Colin Mills defines scale ups as companies which have grown by 20% a year for a minimum of three years and which started the three year period with a minimum of 10 employees.

Scale ups disrupt and revolutionize entire industries, according to a Deloitte & THNK report.[3] “They embody ingenuity, innovation, and foresight,” its authors concluded after studying 400,000 enterprises worldwide.

There’s a common misconception that only start ups can be innovative, dynamic and entrepreneurial. Yet as scale ups like Google and Alibaba illustrate, that’s far from the case.

Perhaps start ups attract more attention because there’s so many of them: it’s estimated that there are 300 million start ups globally.[4] By comparison, only a tiny fraction of start ups ever survive long enough to make the transition to scale up, according to the authors of the Deloitte report.

“Our research shows that the chances of a new enterprise to ascend as a scale up are around 0.5%, which means that only 1 out of 200 surviving new enterprises will become a scale up. ‘Unicorns’ make up the even smaller subset of scale ups; only 104 start ups are valued over $1 billion.”

Those companies that do become scale ups help to boost local, national and international economies. They provide direct, ongoing employment and that, in turn, creates more consumer spending which in turn stimulates the economy and expands the tax base.

Or as business guru and venture capitalist Daniel Isenberg says in Scale Up!, “One venture that grows to 100 people in five years is probably more beneficial to entrepreneurs, shareholders, employees and governments alike, than 50 which stagnate at two years.”[5]

Contrary to what many policymakers believe, start ups don’t help economies to flourish or cause per capita income to rise.

“The relationship between per capita income and entrepreneurial activity is generally negative, rather than positive as is often believed,” wrote Scott Shane, Professor at Case Western Reserve University, in Entrepreneur magazine.[6] He referenced a Gallup Organization survey which compared per capita Gross Domestic Product (GDP) with the fraction of the population that reported being self-employed in 135 countries. It showed that the self-employed fraction had a negative linear relationship with the log of GDP.

“That is, self-employment rates are lower in rich countries than in poor ones.”

But growing a company past the start up phase is not without its share of challenges, whether they are related to employees, sales and marketing, operations, administration, or finance. Most importantly, if growing companies don’t have the right infrastructure to support their expanded operations, those challenges can become increasingly severe.

“While on paper, they may have the revenue, the manufacturing base or customer reach of a substantial business, the culture, the controls, the processes, the personnel and the leadership remain those of a much smaller business that they were a short time before,” says Mills in Scale Up!.

“Worse, they haven’t yet accumulated the resources to build and maintain that infrastructure.”

If the situation is not resolved, the business will outrun itself (cash reserves will dwindle as it tries to meet the expanded demands) or get stuck (as the owner and employees find themselves unable to cope with the problems).

But if you revise your business model, you can overcome these challenges or even avoid them altogether.

“You need to consider your whole business model, because if you have a terrible business model, then the last thing you want to do is to start scaling it,” says Mills.

The CFO Center’s part-time CFOs help clients revise their business model using a framework known as the ’12 Box’ approach.

It has three levels:

  1. Operational
  2. Strategic
  3. Business Support

Operational

This refers to finance operations and focuses on two key aspects: cash and profitability. There are four boxes: Cash Flow Management and Profit Improvement (which generate money), and Internal Systems and Reporting (which generate time for management).

Strategic

This involves your finance strategy: how are you going to finance the business to achieve future cash and profits? The four boxes in this section cover: Risk Assessment, Strategic Funding, Strategic Activities and Exit Planning, and an Implementation Timetable.

Business Support

This involves crucial tasks such as compliance, tax planning and legal issues, banking relationships and outsourcing. In the case of The CFO Center’s CFOs they don’t carry out the tasks but instead, manage the work on a client’s behalf. They’ve built relationships with the right people in each country where they operate so that they can connect clients with the right supplier at the right cost when they need it, and then manage the work on their behalf.

Take the F Score: Find Your Future Challenge Areas

To help you identify which one of these 12 areas is a potential current or future pain point for your business, the CFO Center has created a quick assessment form known as the ‘F Score’. (It will only take nine minutes to complete.)

The F Score features a series of questions built around the 12 Boxes, designed to identify your areas of strength and those which represent a gap. When you’ve completed the questions, you’ll receive an eight-page report which will reveal your current or future challenges. It will not only rate the performance of your company’s finance function but also uncover untapped opportunities for non-linear growth.

To discover how the CFO Center will help your company to scale up, please call us now on 800 919 4022 or contact us here.

Free 1-1 Finance Session

Do you have a burning question about any of the following:

  • Cash flow management
  • Funding
  • Profit improvement
  • Exit planning
  • Reporting
  • Getting the most from your bank?

Book now for your complimentary 30-minute finance breakthrough session with one of our part-time CFOs. Get the answers you need to scale up your business.

Ask the CFO

If you’ve got just one finance-related question and you’d like us to send it across to our team of top CFOs, please let us know, and we’ll get back to you within 24 hours.

[1]EBAY-Number of Employees’, Macro Axis, www.macroaxis.com/invest/ratio/EBAY–Number-of-Employees
[2]Number of full-time Alphabet employees from 2007 to 2017’, Statista, https://www.statista.com/statistics/273744/number-of-full-time-google-employees/
[3]SCALE-UP: THE EXPERIENCE GAME’, van Dijik, Menno (THNK), Kruit, Jan Dirk (THNK), Mogenddorff, Gideon, Mogendorff, Scheper, Wim (Deloitte), THNK & Deloitte, July 2015
[4]What Startups Need To Scale Up’, Gaskell, Adi, Forbes, www.forbes.com, May 30, 2018
[5]Scale Up! How to Take Your Business to The Next Level Without Losing Control and Running Out of Cash’, Mills, Colin, BrightFlame Books, www.brightflamebooks.com, 2016
[6]Entrepreneurship Doesn’t Cause Per-Capita Income Growth’, Shane, Scott, Entrepreneur, www.entrepreneur.com, September 23, 2014

 

 

What to Expect from a Part-Time CFO

What to Expect from a Part-Time CFO

The idea of hiring even a part-time CFO may seem to some SMEs a bit OTT—like paying Quentin Tarantino to make a 90-second home page video or booking Wembley Stadium for the company’s five-a-side friendly football match.

But for companies whose ambition is to get into and survive the coveted scale-up phase, hiring a part-time CFO makes perfect sense. They know that they’re getting a finance veteran, someone with big business experience, who can provide the guidance they need to grow rapidly and help them to avoid the costly mistakes that so many ambitious SMEs make as they attempt to move into the Big League.

As Colin Mills, the Chairman of The CFO Center, said in his book about scale-ups, “The reality is that there is great value in having someone from the next level if you’re aspiring to get there.”[1]

Companies who hire part-time understand that today’s CFOs are capable of delivering far more than bookkeeping or accounting services. They provide the kind of strategic business that fundamentally alters the performance/profitability and long term potential for a business. They can work with your board of directors and external stakeholders such as your bank or investors. They can also advise you on mergers and acquisitions. Besides strategic analysis, they can provide operational support on everything finance-related in your business.

Their responsibilities might cover business planning, capital structure, risk management, auditing and reporting, tax planning, capital expenditure, investor communication, R&D investment, working capital management and company budgeting.

Companies that don’t hire CFOs are often unaware of the opportunities and profits they’re missing out on. When asked why so many SMEs don’t hire CFOs, Matthew Bud, Chairman of the international Financial Executives Networking Group, said business owners are either unaware of their need for a CFO or reluctant to spend the money.[2]

What many entrepreneurs don’t realize is that they’re already spending that money in lost profits and misspending,” he told Inc.

“They’re not seeing the dynamics of the business from an educated financial perspective. You can’t always go with your gut in making financial decisions, which is what a lot of entrepreneurs try to do.”

So, what can you expect from a part-time CFO?

Well, the role a part-time CFO will play in your company will depend on factors such as the size of your business, your expectations, your industry, and your corporate strategy and business goals. But a good CFO will work on your company’s finance strategy and finance operations and manage areas such as compliance, tax planning and legals, outsourcing and banking relationships.

To achieve success in these different roles, a CFO will need outstanding hard and soft skills.

If you’re a CEO, the CFO will be your strategic partner, providing financial insight and strategy and helping you to improve profitability and cash flow.

A good CFO won’t, however, be a ‘Yes’ person, someone who rubber-stamps every initiative without due diligence. On the contrary, they will challenge you and your vision for your business asking the kinds of questions which leads to transformation as opposed to incremental improvement.

Charles Holley, CFO-in-residence at Deloitte and former Walmart CFO, says good CFOs are independent-minded yet supportive of their CEO.[3]

My CEOs counted on me to be the truth teller, to form my own opinions on important company decisions and to speak up. At the same time, they expected my support for execution.”

Great CFOs challenge the business, he says. They point out problems and propose possible solutions to “spark the debate”.

CFOs are in the best position to call attention when the numbers aren’t supporting the strategy. For example, CFOs can push the business to change capex priorities when the underlying ROI assumptions are no longer supported by the numbers.”

Besides being a trusted advisor and sounding board, a good CFO will help to raise efficiencies, identify opportunities, manage risk management, and manage capital structure.

Since they speak the language of financiers and understand what they are really interested in, CFOs can also liaise with financial institutions, investors, and auditors on your behalf.

In other words, a part-time CFO can help you to manage the transition into the scale-up phase more smoothly and ensure you reach your growth targets sooner.

How it works in practice

The CFO Center’s part-time CFOs use a proven framework known as the ’12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company finance function and identify every problem area.

They will help you to understand your company’s finances; eliminate cash flow problems; identify cost-savings, and improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers.

To discover more about the 12 Boxes, click here.

 

Need help?

To discover how a CFO Center part-time CFO will help your business, contact us now on (800) 919-4022. To book your free one-to-one call with one of our part-time CFOs, click here.   You can see how they add rocket fuel to any business here.

To hear what people really think about The CFO Center’s part-time CFOs, watch these short videos here.

Uncover strengths and weaknesses

Identify the strengths and gaps in your business in just nine minutes with the F-Score.

Just answer a brief series of questions, and you’ll receive an 8-page report that will reveal potential current or future pain points for your business. It will also help you to rate the performance of your finance function and uncover untapped opportunities for growth. Click here now to take the F-Score.

Got a Big Question?

If you have a burning question for one of our team of CFOs, ask it here, and you’ll get an answer within 24 hours. Please note the question must be finance-related (sadly they can’t give horse-racing or fashion tips or relationship advice).

[1]Scale Up: How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash’, Mills, Colin, Brightflame Books, 2016

[2]Here’s When, Why and How to Hire a CFO (And Yes, You Can Afford It)’, Tabaka, Marla, Inc., www.inc.com, June 27, 2016

[3]What CEOs want—and need—from their CFOs’, Holley, Charles, Deloitte, www2.deloitte.com

 

What A Chief Financial Officer Can Do for Your Company

What A Chief Financial Officer Can Do for Your Company

You might think a Chief Financial Officer role is confined to traditional finance activities, but today’s CFO can do so much more than count beans.
In the past, a CFO’s responsibilities might have been confined to high-level accounting such as providing timely financial statements and monthly management reports, managing investments and expenses, monitoring cash flow, and managing risk. But as the business landscape has become more complex over the past decade, the role of a CFO has changed.
That change is due to factors such as the global financial crisis—the biggest since the Great Depression of the 1930s, disrupted and volatile markets, the rise of big data, and the impact of digital and social media.
As a result, CEOs and their Boards expect so much more from CFOs, according to a KPMG report.
“CEOs are increasingly looking to their finance leaders to help drive wider business strategies,” says Simon Dergel, author of ‘Guide to CFO Success’.
They expect CFOs to make decisions and shape their plans based on the company’s ambitions, he says. As the keeper of the company’s data with an understanding of every department’s objectives and performance, they can play an active role in refining and aligning business strategies.
“Perhaps the biggest change in terms of the CFO’s role in business today is that their advice is not only valued—it is necessary,” says Dergel.
“Businesses are currently dealing with a wave of disruptive competitors and fast-changing customer expectations, while also managing a global talent shortage and volatile financial conditions. The wisdom and experience of finance leaders make them indispensable in the boardroom as companies look to tackle one of the most uncertain economic periods in decades.”
Most importantly, CFOs are delivering on these expectations. The new breed of CFOs are now much more forward-looking. They wear three ‘hats’ at any given time: financial expert, active management team member and leader of the finance function.

Given the opportunity, they can perform multiple roles within a company, working both on and in the business. Not only can they direct financial performance and protect the financial integrity of the company but they can also drive strategy.
This is borne out by James Riley, the Group Finance Director and Executive Director of Jardine Matheson Holdings Ltd., who says, “A good CFO should be at the elbow of the CEO, ready to support and challenge him/her in leading the business.
“The CFO should, above all, be a good communicator—to the board on the performance of the business and the issues it is facing; to his/her peers in getting across key information and concepts to facilitate discussion and decision making; and to subordinates so that they are both efficient and motivated.
“Other priorities for a CFO are to have strength of character, personality, and intellect. I take it as a given in reaching such a position that an individual would have the requisite technical knowledge and financial skills.”
How Start-Ups and Scale-Ups Benefit
Most start-ups and early-stage growth companies don’t need and can’t afford the services of a full-time CFO. But that doesn’t mean they can’t benefit from all that CFOs offer. They can access the skills of highly qualified CFOs by engaging them on a part-time basis.
Part-time CFOs can provide enormous value in terms of strategy and planning for early-stage or scale-up companies. A report from the Financial Executives Research Foundation (FERF) went further: it described their role as “critical to the success of start-up and early-stage growth companies” since they provide key insights.
It found CFOs play key roles in not only managing a young and fast-growing company’s finances but also in setting broader strategic goals and establishing and achieving financial and non-financial milestones.
When the company is at a stage when it needs external investment, the part-time CFO can manage the process to ensure it raises the right type of funding from the right sources. The part-time CFO can also provide more comprehensive reporting as well as manage the relationship with the external investors, whether they are venture capitalists, private investors or banks.
Part-time CFOs also help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors.
They also play a key part in setting and monitoring company strategy and maintaining a balance between investing in growth, building market share and preserving capital for future opportunities.
As they grow, the need for a part-time CFO’s financial and strategic acumen becomes more acute, FERF found.
The CFO Center’s part-time CFOs bring these skills to every client at a fraction of the cost of their full-time counterparts. For instance, its part-time CFOs can:
• Provide you with an overview of your company so that you can make sound decisions about its future.
• Help you to understand your company’s finances.
• Eliminate cash flow problems.
• Identify cost-savings within your company.
• Improve your profits.
• Create a realistic business plan and so make better financial decisions.
• Help you and your management team to manage your finances with ease.
• Develop clear strategic objectives.
• Identify your Critical Success Factors and Key Performance Indicators (KPIs).
• Find and arrange funding.
• Understand your main profit drivers.
• Identify your best customers.
• Sort out your tax position.
• Introduce timely, easy to follow management reports.
• Facilitate expansion in your country and into other countries
• Build value to make your company more attractive to investors or buyers

To discover how an CFO Center part-time CFO will help your business, contact us now on (800) 919-4022. To book your free one-to-one call with one of our part-time CFOs, click here.

[1] ‘The Changing Role of the Chief Financial Officer’, Mbatha, David, KPMG

[2] ‘What Makes a Great Modern CFO?’, Dergel, Simon, Oracle, https://blogs.oracle.com, June 7, 2017

[3] ‘THE ROLE AND EXPECTATIONS OF A CFO A Global Debate on Preparing Accountants for Finance Leadership’, International Federation of Accountants, www.ifac.org, 2013

[4] ‘Center Of The Storm: The CFO’s Role In Start-ups And Rapidly Growing Companies’, Financial Executives Research Foundation, www.financialexecutives.org, March 28, 2017

The Rising Power of AI in Financial Services

The Rising Power of AI in Financial Services

Artificial Intelligence (AI) is already transforming the way in which financial service companies are doing business.

More and more of them are using AI to process information on their customers, cut costs, save time, monitor behavior patterns, assess credit quality, automate client interactions, analyze markets, assess data quality and detect fraud.

A PwC Digital IQ 2017 survey found that 72% of business decision makers believe AI will be the business advantage of the future.[1] About 52% said they’re currently making “substantial investments” in AI, and 66% said they expect to be making substantial investments in three years.

Franck Coison, Industry Solution Director, at international IT services company Atos says the four main types of AI are facial and voice recognition, natural language processing, machine learning, and deep learning.[2] They can be used in chatbots, document analysis, process automation or predictive analysis, he says.

Although robotic process automation (RPA) is increasingly common in financial services, it is usually used for quite simple, repetitive tasks, says Coison. “In contrast, AI can be used to automate more complex tasks that require cognitive, or ‘intelligent’, processes.

“While RPA is appropriate for back-office and accounting processes, when it is combined with AI, any process including customer-facing activities can be automated.”

That means it has great potential in areas such as customer service, sales and customer intelligence, IT services, fraud prevention, and cyber security, he says.

The PwC survey found that adoption of practical machines that think is widespread in the financial services sector. Some banks use AI surveillance tools to prevent financial crime, and others use machine learning for tax planning. Many insurers use automated underwriting tools in their daily decision making and wealth managers offer automated investing advice across multiple channels.

A provider of next-generation investment analytics Kensho Technologies has for example developed a system that allows investment managers to ask investment-related questions in plain English, such as, “What sectors and industries perform best three months before and after a rate hike?”.[3] They receive answers within minutes.

AI is proving popular among banks too. Lloyds Bank, for example, has invested £3billion (nearly $4billion) on its digital transformation initiative, which includes using AI to “simplify and progress modernization of its IT and data infrastructure, as well as other technology-enabled productivity improvements across the business”.[4]

Terry Cordeiro, Head of Product Management at Lloyds Banking Group says AI has “completely transformed how the finance industry works, with the vision at Lloyds being to use smart machines for extending human capabilities while using data to respond.

“Automating processes means better opportunities to reduce costs for better decision making, and intelligent products mean that our customers are able to do much more,” Corderio says.

Earlier this year, NatWest Bank introduced ‘Cora’, an AI-powered ‘digital human’, which converses with customers in its branches.[5] Cora can answer more than 200 queries, covering everything from mortgage applications to lost bank cards.

The plan is to develop Cora so it can answer hundreds of different questions, as well as detect human emotions and react verbally and physically with facial expressions. As well as being put in branches, Cora could be used by customers at home on their laptop or PC and, in the long run, on smartphones.[6]

Finance departments are also benefiting from AI. The insight into data that it can provide will be a competitive advantage, according to Matthias Thurner of the Corporate Performance Management and Business Intelligence solutions provider, Unit4 Prevero.[7] “For this reason, AI will become integral to finance functions in every industry,” he says.

As technology improves, AI will become faster and smarter at providing analysis, he says. Companies that don’t use it will be at a competitive disadvantage.

“Businesses don’t want to replace their employees, but they do want to make better financial decisions, and AI will allow them to do that faster and cheaper than a whole team of humans.”

It will enable skilled office workers to spend more time on their core competencies rather than maintaining data, he says. This will help organizations to reduce costs and the time spent on manual tasks or the classifying of data.

Likewise, CFOs will benefit from AI data analysis, says Thurner. That’s important since there’s an increasing expectation for CFOs to be a source of business insight. Boards want more frequent reports that contain more context and detail. Fortunately, they will be able to deliver more detailed and more frequent reports thanks to AI, he says.[8]

But it’s unlikely a CFObot will appear in finance departments any time soon. “We can expect machine learning to powerfully augment human expertise and experience in the near future even if that’s not a reality today,” says Thurner. “AI can provide data back-up and make suggestions to help the human decision-maker, but it’s the CFO who ultimately has to decide what to recommend,” says Thurner.

With so much potential in key areas of business, it’s no wonder that AI is being hailed as the Fourth Industrial Revolution.

“AI will have an impact as big as electricity and will transform every single industry,” predicts Cordeiro of Lloyds Banking Group.

To discover how a part-time CFO will help your company, please call the CFO Center on (800) 919-4022 or visit our website now.

[1]Artificial intelligence and digital labor in financial services’, pwc, https://www.pwc.com

[2]Artificial intelligence: the new power in financial services’, Coison, Franck, Director of Finance, http://dofonline.co.uk, May 21, 2018

[3]How Artificial Intelligence Will Redefine Management’, Kolbjørnsrud, Vegard, Amico, Richard, Thomas, Robert J., Harvard Business Review, https://hbr.org, November 2, 2016

[4]Artificial intelligence ‘transforms financial services’, Alger, Leah, Software Testing News, http://www.softwaretestingnews.co.uk,June 19, 2018

[5]How does NatWest keep up-to-date with online banking trends?’, Alger, Leah, Software Testing News, http://www.softwaretestingnews.co.uk, June 15, 2018

 

[6]NatWest Bank tests Cora, an AI bot that will answer customer questions’, Jones, Rupert, The Guardian, https://www.theguardian.com, February 21, 2018

[7]Here are the human CFO traits that no artificial intelligence can replace’, Thurner, Matthias, Diginomica, https://diginomica.com, March 12, 2018

[8]  ‘Do CFOs have what it takes to be AI educators?’, Thurner, Matthias, Finance Director, www.financedirector.co.uk, February 21, 2018

 

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