Even Football Teams Play Defense!

What would a football game look like if each team just played offense? Not very practical is it? Unfortunately, that is how most entreprenuerers manage their business.

They often focus on increasing sales, new growth initiatives or physical plant expansion. But what happens when the game turns and the economy slows down? As the fallout from the subprime market works its way through the economy perhaps it is time to rethink your strategy.

Right now the economy could go either way; into a recession or bypass one altogether! Now is the time to shift your posture from an aggressive one to a defensive or , at the least, a neutral one.

So what actions might one take in a defensive or neutral position?

– slow down on hiring new employees (not stop, just slow down)
– pay down debt
– build up cash or liquidity
– complete existing projects
– postpone new projects (and fund out of cash flow)
– increase marketing efforts (often marketing gets cut in a recession. You should do the opposite!)

To paraphrase a quote of Warren Buffet: You never know who is swimming naked until the tide goes out!

Let’s say that you take defensive actions and the economy slows down? Your company would then be in an excellent position to resume its growth afterwards. If we do go into a recession then you are in an excellent position to weather the storm and gain market share from your competitors. Playing a defensive game is an important strategy in growing a company.

Even Football Teams Play Defense

What an Entrepreneur Wants From a CFO/Controller!

Most accountants are trained to identify problems. In fact, as a professional, they excel at identifying problems and minimizing risks. Two excellent examples of this skill is the audit and tax compliance areas of public accounting.

What an Entrepreneur Wants From a CFO/Controller

Entrepreneurs are looking for something more from their CFO/Controllers. They take risks and solve problems everyday. As a result, they often get tired carrying all of the company’s problems on their shoulders. Thus, they want team members to help them navigate the challenges of the day!

So, the next time you identify a problem in the company, develop a solution at the same time! Over time, the entrepreneur will rely on you more and more to shoulder the responsibility of managing the company.

Since we don’t have all of the answers, use outside resources for problem solving. WikiCFO is an excellent repository for CFO/Controllers of entrepreneurial companies. Use this tool to bring the solution not just the problem!

More than anything, what an entrepreneur wants from a CFO/Controller is for them to be their trusted advisor or wingman. Download our free How to be a Wingman guide by clicking the link below. Take your career to the next level and step up into the trusted advisor role.

What an Entrepreneur Wants From a CFO

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What an Entrepreneur Wants From a CFO/controller

Is the Tide Beginning to Fall?

Today I attended a luncheon for the Turnaround Management Association of which I have been a member for approximately 10 years. During this time I have seen good economies and bad. For the past 3 years the economy has been so good that the TMA meetings looked like a Maytag repairmen convention. Today was different! The question I want to ask is, “Is the Tide Beginning to Fall?”

Is the Tide Beginning to Fall?

The room was packed with people I had not seen in 6 months. What was more thought provoking was the speaker. Not what he had to say but his recent career change.

Trained as a bankruptcy attorney the speaker had spent the last 6 years as an investment banker. Sometime during the year his firm was sold to Merrill Lynch. He recently left Merrill Lynch to join a major law firm. Doing what? Bankruptcy law!

So when the investment bankers start becoming bankruptcy attorneys maybe we should be watching the economy more closely!

Check out the warning signs of a company in trouble.

Is the Tide Beginning to Fall?

Chart of Accounts

An item often taken for granted and seldom reviewed is a company’s chart of accounts. Often a hodgepodge of random accounts created for one-off events, it can lead to confusion and erroneous reporting. It is a good idea to take a look at the chart of accounts model periodically and clean it up. As always, simplicity is desirable, though not always attainable.

Chart of Accounts Model

You might consider this model to use as a guideline for cleaning up or establishing your firm’s chart of accounts.

If you want to increase the value of your organization, then click here to download the Know Your Economics Worksheet.

chart of accounts model

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chart of accounts model

See also:

Standard Chart of Accounts
Problems in Chart of Accounts Design
Chart of Accounts Example for SG&A Expenses
Chart of Accounts (COA)

Creating a Flash Report

Creating a flash report is an essential part of being a financial leader. Managers and ownership often ask CFOs and controllers, “how are we doing?” While this seems like a simple enough question, there lie many devils in the details. The key is to be able to communicate above the details while being neck-deep in them. A way to accomplish this is by creating a simple one or two page flash report to easily communicate the myriad details of your company so that an informed user can see the true picture of the company’s performance and its position in the marketplace.

Start your Flash Report today with our Flash Report Tool – available for only $9! Learn more about how you can access it here.

Creating a Flash Report

Liquidity, productivity, and profitability are indeed what a CFO should think about on a daily basis.

Liquidity covers the basic responsibility of a company’s finance department: do we have enough cash to be open tomorrow?

Productivity ties the performance of a firm’s operations to its financial performance.

Profitability provides an indication of how much money the company has made.

To learn more financial leadership skills, download the free 7 Habits of Highly Effective CFOs. Find out how you can become a more valuable financial leader.

Creating a Flash Report

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Creating a Flash Report


Welcome to Blog CFO, dedicated to an overlooked, yet vibrant and important part of the economy: the CFOs and controllers of middle-market private companies. This group is faced daily with unique and demanding challenges, yet fails to receive the attention of their counterparts in large, publicly traded firms. We at Blog CFO are committed to serving this neglected group with informative commentary and suggestions to solutions for everyday problems which can be found on the internet. It is our goal to be as direct and free of hyperbole as possible.

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