Confessions of an Interim CFO: The Five Things to Tackle First - CFO Innovation


Interim CFOs are expected to do many things in a short period of time. Perhaps, most importantly, they are expected to help improve cash flow and profitability, usually under very difficult challenges (e.g., falling profits and negative cash flow) facing the company. Here in the San Francisco Bay Area (and especially in Silicon Valley), time is of the essence in stabilizing and improving results whether it’s for a startup, small business, or large company.

As a recent blog post on CFO Innovation reveals, this can be extremely difficult given the circumstances:

“When you join a company as interim CFO, you are expected to bring value from the very first week. This is daunting. It often takes a couple of months – and longer for larger companies with many subsidiaries and multiple verticals – to fully understand a business in sufficient detail. Also it takes a few weeks to learn how good the team in place is. Frankly, analysis in the number one area (which is cash!) will lead you to all other areas of importance”

The blog post offers some practical tips for the first 100 days:

“Follow the cash. From your first day. If there’s no cash forecast, start creating one – right now. The exercise will quickly lead you to understand the levers of the business. As you try and forecast cash, you will learn of discrepancies between revenue recognition versus actual cash collection, which will start with you understanding the balance-sheet debtors and bad debts. You will learn about COGS [cost of goods sold] figures versus what remains in inventory. This will lead you to understand whether cash is going out on potentially unnecessary inventory build-up.”

“Check that the payables function is not paying fake suppliers, overpaying, or paying for goods not received. And don’t forget that a key part of compliance is checking any loan covenants straight away.”

Read the full post

#roleofcfo #cashflow #cashmanagement

Recent Posts

See All

The Changing Role of the CFO

Business changes rapidly at the speed of competition. It is often very challenging for companies to adapt to keep pace with such innovation, particularly when it comes to Chief Financial Officers (CFO

(415) 562-4490