Larger businesses have a Chief Financial Officer (CFO) on staff. But what can small and medium sized businesses do in this regard?

Clearly, larger businesses can afford an in-house CFO. But it goes beyond an affordability issue: Large, successful businesses also understand how crucial the CFO role is to their business performance.

The CFO keeps an eye on the numbers, helps management create sound forecasts, ensures the cash inflows and outflows are managed well, reports on revenues achieved compared with targets, gives solid information on a range of Key Performance Indicators (KPIs) to the business decision makers, and also helps with decision making.

This is management input that all businesses require regardless of their size. So how can I as a small or medium sized business have these same skill sets in my business to manage the financials, assist with the growth of my business and provide governance, all at an affordable price?

The answer lies in outsourcing this function to a Virtual Chief Financial Officer (VCFO). You get a part-time, outsourced VCFO until you can afford one full-time, all for an agreed fixed monthly fee.

That’s Where We At Insight CA Limited Can Play A Pivotal Role

At Insight CA Limited, we work closely with our clients to understand your business and what you need. We become part of your core business team, providing expert advice for more informed decision making, timely and accurate reporting, and reduced operating costs

At Insight CA Limited we roll our sleeves up and work with you in regular monthly management meetings throughout the year as Your Accountability Partner on:

• Cash flow – Efficient management of cash flow to provide cash for saving or growth
• Profitability – Identifying key drivers of profit and focusing on these, while at the same time implementing and measuring against budget forecasts
• Business Strategies and improvement advice
• Structure management – Staying on top of risk and taxation issues

As business owners we all know we need to measure and monitor Key Performance Indicators (KPIs). That is, the handful of numbers that really matter in running our business.

It is also important that you have a ‘KPI dashboard’ to display your KPI targets compared with your current KPI performance. This helps tremendously in monitoring and managing your business performance and ultimately hitting your targets.

As your VCFO, we will bring to each meeting that we conduct with you clear financial reports, easy-to-understand KPI information, as well as our commercial experience to interpret the information, make suggestions and help guide your business decision making.

Items We’ll Discuss Each Meeting Include

• Profit (historical and future)
• Cash flow (historical and future)
• KPIs: A mixture of focusing on Lead Indicators which drive performance and Lag Indicators that measure the outcomes
• Marketing activity and effectiveness
• Operational efficiencies such as work-in-progress or workflow
• Financial indicators such as debtor turnover
• Team efficiencies, knowledge management, morale and safety.

By helping with your forward planning for achieving the next period’s targets, and by being a sounding board for you as you strive to meet your targets, our VCFO service and support gives you a crystal clear focus for what needs to be done to achieve the goals of your business.

Your Next Step

In the past we have talked about execution being an important ingredient to business success and that certainly applies to businesses with strong growth ambitions. But execution isn’t everything, it needs to be matched with a strong and realistic growth strategy and plan. One without the other prejudices the probability of success.

Statistics around achieving growth objectives and profitability can be a hard read with success rates as low as 20%. Why is it so elusive? Sometimes it’s because people underestimate the opportunities within the business or are unable to resource up to execute on opportunities that exist.

So what can be done about this?

•  Business owners and managers should review the operations of their core business, whether that be products, services, locations or customers that generate the greatest level of revenue and profit. They need to assess trends associated with these to determine what is going well, what is not, and understand what is impacting that change.

•  For a business to sustain long-term growth, you need to understand what sets you apart from your competition. Why are customers come to you? What makes you different and credible?
  

  How to Grow your Business

•  You got into business to solve a problem for a certain audience. Who are we talking about? Identify your ideal customer, and don’t lose sight of this audience as you adjust business to stimulate growth.

• You need to be able to measure the changes you make otherwise you have no way of knowing whether it’s effective. Identify which key indicators affect the growth of your business, then dedicate time and money to those areas.

(more…)

For some business owners who have run their business for the last 10, 15 even 20 years, it’s sometimes hard to break the mould of cruising from one year to the next. New years’ celebrations are over, resolutions have been set, with some already broken. For businesses it’s not that much different, it still involves reflection and it still involves thinking about the future as you see it. It needs to be an annual ritual, but should be taken further than that and seen as an opportunity to either reaffirm previous goals that continue to provide focus, or maybe it’s time for change.

Planning affects all aspects of business, from business start-ups, to overcoming difficulties associated with growth or survival, to a desire to do things better and more efficiently, through to adventuring into new horizons with new products, services or markets, and on to setting up new projects and even planning to exit your business.

Why should it be the first thing you do?  Because it provides focus, it provides an opportunity to assess the status quo and whether that still fits with your business, it provides an opportunity to evaluate the landscape and identify potential risks or opportunities you hadn’t identified in the past, it provides an opportunity to change things, realign, redirect or discontinue.  It provides a platform to think through the pros (more…)

It’s the financial year end for a lot of people and businesses, so here’s a few pointers to think about as you finalise your accounts and tax position for 2015/16.

First and foremost – get your documentation organised so that it’s easy to refer to should you have any queries. By that I mean bank statements, invoices, receipts, insurance documents, employee records and the like.

Some key areas to consider as you approach the end of year:

Contracts. Have you invoiced retentions that are not payable till the next tax year? If they are payable in the current year they are taxable as income.

Credit notes. Look out for any credit notes issued to customers after balance date. You may be able to apply them to this tax year

Debtors. Review your debtors. Did you take reasonable steps to recover all debtors?

Bad Debts. If you write off bad debts before 31 March, you should be able to claim it as a deduction.

Employee expenses. Amounts owing to employees for holiday pay, bonuses etc. can be claimed in this financial year if you pay them within 63 days of balance date.

Repairs and maintenance. Undertake planned maintenance or repairs before year end to ensure a tax deduction.   (more…)

It should be every business owner’s objective to know where they stand in the market compared to their competitors. They should also have a mind-set they can learn things from their competitors, even if it’s to say “We’re not doing it that way”.

Benchmarking is when you compare your business activities and processes to those of your competitors.

It’s often seen as being too complicated and time consuming to undertake on a regular basis and as a result is often snubbed. But it shouldn’t be disregarded without serious thought because there is often a lot to be learned from your competitors and this process provides an opportunity for you to do that. Even if you think you are at the top of your game, you still want to know how close the rest of the pact is.

(more…)

A few of my friends are business owners that are now finding there at that age where their business has matured, like them. It’s still profitable and able to sustain a nice lifestyle and it’s still fun to work there too. The children have grown up and left home so discretionary spend is now spent on more elaborate trips overseas, i.e. it’s being spent on them not the kids, and those trips are becoming more frequent. Without knowing it they are already changing their lifestyle to life after work, and they like it.

You may ask, “Why would you think of an exit strategy when you’re still enjoying yourself in the business?” Well, you need to think of it this way – your business is an asset, one in which you have poured a lot of time, energy and invested money in over the years. While it may continue to support your current and immediate lifestyle, focus now should be on increasing its value so that when the time comes, you are able to take full advantage of the additional wealth that brings, to then fund the next chapter or venture in your life.

(more…)

When it comes to business, you’ll do a lot better if you have focus and direction rather than just meandering along aimlessly.

And what can help give you that focus and direction? A good business budget.

(more…)

For many, the word ‘budget’ is about as appealing as the word ‘diet’.
It seems to imply what you will go without, rather than what you will achieve.
To a successful business owner, however, the word ‘budget’ has a very different meaning.

It’s more like a map than a diet. It’s an outline of where you want to take the business, and what you need to achieve to get there.

(more…)

It’s no surprise that in a country renowned for just getting things done, that the number one reason why people want to own their own business is a desire to be independent. That independence comes with a number of challenges that can test the emotions of even the most successful owners.

Business owners are faced with a wide range of challenges, each day often different ones rise to the surface. Most of the more pressing challenges are financial
related. Whether it be funding or getting access to capital, cash flow
problems or challenges to do with profitability, the size of the debt linked to them or their business, they can all consume some businesses and owners.

(more…)