CFO2Go Blog

CFO Tip #4 – Accounts Receivable & Accounts Payable
Do your customers have net 90 terms on your Accounts Receivable?  Change it to Net 30.  Is it possible to negotiate your Accounts Payable from Net 30 to Net 90?  Pretty simple right…well you better beat your customers/vendors to the punch just in case they read this too.  This ties in with the “Cash is King” point that you’ll see in our next post.  If you’re the first to negotiate more favorable payment terms, you’ll also be the one holding the cash.

CFO Tip #3 – Watch Your Expenses
This sounds like a pretty simple piece of advice, but you’d be amazed at how many companies are trying to maintain a certain type of lifestyle in their business rather than focusing on ensuring their survival. (*cough* – banking industry)  Cut back on authorized signers on your accounts, take away employee credit cards and make them fill out expense reports, take a close look at your vendors and pay close attention to your expenses for the next 3 months.  It’s amazing what most businesses find…

Keep checking back for #2 & #1 next week, or subscribe to our RSS Feed!

CFO Tip #6 – Find Additional Revenue Opportunities
You’d be surprised at where you can find additional revenue opportunities within your company.  Take an inventory of ALL your company’s assets.  Hardware, software, employee talents, company data and (my personal favorite) intellectual property.  We had one client who manufactured a piece of equipment and was able to license the blueprints and IP to another company for a few million…cash.  Where else can your company find additional revenue?

CFO Tip #5 – Talk to Your Banker
A lot of companies tend to avoid their banker in rough financial times and usually this stems from a sort of embarrassment about your company’s position.  Get over it, times are rough for everyone.  You NEED to be talking to your banker so they know where you stand.  Chances are your banker has other clients that are doing worse and they’ll be the first ones that the bank cracks down on.  The more you talk to your banker, the better your relationship and the more likely he/she is to HELP your survive.

Keep checking back for #4 & #3 next week, or subscribe to our RSS Feed!

CFO Tip #8 – Look for Distributions
Sales forces are expensive.  Marketing isn’t free.  Are there other distribution channels that you can utilize where you may receive lower margins, but will severely decrease your overhead?  Remember our mantra, Cash is King.  Freeing up overhead means more money in the bank.  Your growth rate may slow down a bit, but your long-term outlook will be dramatically improved.  Don’t be afraid to make game-changing decisions if your books are solid and it changes your long-term outlook for the better.  This may be a move you should have made long ago, but were too comfortable to make the jump.

CFO Tip #7 – Evolve Your Business
The cool thing about an economic change is that it forces us to adapt.  Companies had the luxury of taking their time in switching from paper to radio, and again from radio to television.  But now the next change is to the internet and I see companies everywhere who are still relying on the Yellow Pages.  How’s that working out for you?  Don’t answer that question without considering where your company COULD be if you used some of the new financial, marketing and management tools available today.  The Yellow Pages may be helping you pay the bills, but your company could be seeing a 300% increase if you evolved your business a little.  It’s time to start thinking out of the box.

With all the “down economy” financial advising our principals have been doing lately, we decided to pull together a Top 10 list of things your company should be doing to weather the storm:

CFO Tip #10 – Keep Talking
The truly amazing thing about business is the people you meet and how these connections come around to benefit everyone.  Don’t hole up in your office, NOW is the time to be out networking.  Meet people in your area, make friends, lend a hand to someone…be a good member of your business community.  As Richard Branson put it [I’m paraphrasing here] “Business opportunities are a dime-a-dozen, you need to be smart enough to filter out the bad ones, but there are enough good ones to keep us all busy.”  Go meet people.  Talk about your business.  Talk about your successes and especially your challenges.  You never know when you’re talking to someone with the power to help you or the idea that will completely change your business for the better.  But DON’T fall into the deadly pitfall of networking just for your own personal benefit, people can smell this from a mile away and nobody will want to lend you a hand.  Be a good member of your networks, be interested in other people’s businesses, ask questions, offer free advice, meet people for coffee…the more people enjoy your company and respect your expertise, the better the chances that they’ll offer up their help if you need it.

CFO Tip #9 – Renegotiate Your Contracts
Many larger, well established companies will have no problem re-negotiating your contract from a short-term to a long-term, especially if they’re really enjoying your product/service.  We had a client who offered a service to a major company in the Seattle area.  They re-negotiated a 1-year contract to a 3-year contract AND worked in a 15% price increase.  Even if you don’t get the price increase, a 3-year contract ensures long-term revenues and may just be enough to ensure your company’s survival.  Be creative and don’t be afraid to ASK.  The answer is always “No” until you ask.

Keep checking back for #8 & #7 next week!