This post is a road map to assess where your efforts in the accounting, finance and treasury functions should be focused in your first 101 days.
We divided the assessment part of this process into 9 components. With good time management the assessments should take about 2 weeks of your time. Don’t let that worry you. The components are areas you will become familiar with early on in your new role anyway. This formal process not only prevents you from overlooking key areas, it will save you time in the long run. These components are foundational to becoming a great CFO. Once these components are assessed you will have enough information to develop and execute a plan to get your operations in order.
The 9 components to be assessed are:
1. Review the Corporate Strategy
This should be done with the CEO and Board Chair. Look for completeness, consistency, communication and evidence that all parts of the strategy (or business plan) are being implemented. Take this opportunity to learn how they describe why the company exists and what they believe is important.
2. Review Corporate Documents
In this component make sure all formation documents are current and their requirements being followed. Review minutes from Board Meetings and the most recent audit for the same reason. After your review schedule time with each executive to follow up on questions that came up during your review and learn what their expectations of your role and department are.
3. Review the List of Compliance Requirements
This might be a long list that includes regulatory (i.e. tax, labor, environmental, safety) and commercial (i.e. banks, insurance, financial audits) requirements. The key issues when reviewing these include: a.) are they filed timely, b.) are you comfortable they are accurate. When your review is complete meet with your key advisors (outside accounting firm, banker, insurance broker, legal firm, etc to obtain their input on how things are going.)
4. Conduct a Balance Sheet Analysis
Know thy Balance Sheet is the first commandment of being a Successful CFO. I allot an over-weighted portion of assessment time to this segment. A tidy balance sheet is the solid foundation a CFO needs to build out all the value-added capabilities your team will deliver to the company.
5. Conduct an Income Statement Analysis
Some basic margin and ratio analysis coupled with an accounting policy review will give you a good sense of profitability, actual performance compared to plan, key accounting policies and the extent the company uses benchmarking as an improvement process technique. Know thy Margin is the second commandment of being a Successful CFO.
6. Conduct an Cash and Liquidity Analysis
This review includes recent cash flow reports, current liquidity and at least a one year cash forecast. Stress test the cash forecast by using a “worst case” scenario in addition to “expected” and “best case” scenarios.
7. Review the Periodic Financial Package
In this review look for content, timing and who is receiving the information. After this review you should have an opinion on how valuable this information is to the success of the company. Ask yourself, “Is the information we are supplying important for making key decisions in the company?” Are other departments getting what they need from your team to understand and improve their operations?
8. Review Treasury Operations
This review includes the cash management process, all credit facilities/terms and Risk Management practices at the company. If you are borrowing money, Know thy Creditor is an important commandment for being a Successful CFO.
9. Review Finance Operations
This review looks at the budget process, forecasting and investment analysis. If the Balance Sheet and Income Statement are in great shape there is a good chance your finance operations are in good shape too. This step also includes an assessment of your technology and financial systems.
Based on the current status of each component, dedicate time to develop and execute an improvement plan for each component that is not operating at peak efficiency. To help you estimate the effort required to improve each component we’ve developed an Assessment tool you are welcome to use.
The results of the assessment will assist you in understanding where your near-term development efforts should be focused and will help you manage your time during your First 101 Days as a Successful CFO.
Source: Business Financial Consulting