Best Practices for Financial Operations

I've been a CFO for 5 years. And I've also worked with good, average, and bad CFOs. Here's what good CFOs do (that others don't): 1. Understand the business. This is top priority. Their baseline understanding of the company will form the foundation of each decision they make. They need to fully review the company’s objectives, operations, and financial position before speaking with ALL the key people. 2. Optimize for cash first. A good CFO focuses on optimizing working capital first. Stretching payables, streamlining the collections process, identifying better ways to use credit, and making payments more efficient. Then create an updated cash flow forecast. 3. Improve financial processes. There are 2 parts to this: The first focuses on the business’s financial infrastructure. At this stage, a good CFO is going after the low-hanging fruit to improve performance, cleaning up the books, and eliminating sources of waste. The second focuses on optimization: Automated reporting, predictive study, and upgrading tech to do more with less. The goal here is to free up your team for higher-value work. 4. Cut costs. This is the quickest way to boost cash flow. With my clients, I do this by first reviewing budgets with each department leader and then implementing cost-cutting measures in order of efficiency. The goal is to reduce expenses without taking a hit to quality. 5. Build a financial plan. At this point, your new CFO has plenty of data to build a financial roadmap. I work with the executives to come up with core KPIs to track, actions to improve them, and an agreed-upon approach for balancing risk and future growth. 6. Communicate clearly. I stick to 2 rules of thumb: 1. Avoid using jargon 2. Never present just data I translate it into plain English by calling out growth opportunities, benchmarking performance against the competition, and linking present insights to future actions. By keeping everyone in the loop, even the most junior employee will be empowered to make the best decisions for your business in their day-to-day. I’ve helped over 75 SMBs grow with good finance and accounting practices. If you need help or have any questions, feel free to send me a DM.

After 5 years of growing Obvi into an 8-figure brand, we have boiled down our essential financial ops into 10 commandments for DTC finance. Here’s how we achieve clarity and profitability... 1. I WILL NOT optimize for vanity metrics like topline revenue  We’re not in the ZIRP or Pandemic era anymore. First purchase profitability is a must. Hockey stick graphs are sexy, but they only matter if you’re keeping more than you spend. 2. I WILL understand my total cost to ship Don’t just look at COGS. Packaging, freight, warehousing, shipping, discounts, returns, chargebacks, seller fees, marketing…you have to price-in all of these to understand your contribution margin. 3. I WILL NOT use a boilerplate P&L The profit and loss is your business bible. It needs to be tuned to reflect e-commerce and shouldn’t just be some off-the-shelf template from QBO. It won’t deliver insights at a glance otherwise. 4. I WILL set up a process to report on daily contribution margin and profit With thousands of orders per day, different cost structures, and multiple departments… things can go off the rails fast. Create a process that summarizes all of these inputs and reports on net dollars- each and every day. 5. I WILL find ways to reduce my cash conversion cycle You want to shrink this as much as possible. The smaller your CC, the less you have to stretch your cash with loans or a line of credit. Negotiate with suppliers, apply for 60-day payback period credit cards, etc. 6. I WILL NOT confuse profit and cash flow Variability in fixed expenses, accounts receivable, and inventory issues can all cause major setbacks in the amount of cash you have on hand.  Even with great margin, your company can run out of cash and be forced to liquidate or fundraise if you aren’t careful. 7. I WILL always have a realistic and up-to-date cash window “CASH IS KING” Is that a cliché? Yes. But it’s true. You don’t want an empty bank account when major expenses hit. 8. I WILL NOT “set and forget” operational expenses like SaaS Subscriptions A robust tech stack is a must in DTC, but don’t let tools stack up on your credit card. Review things regularly and be ruthless in your ROI calculations. Make sure you’re doing MONTHLY expense audits.  9. I WILL NOT forget that sometimes the cheapest option can actually be the most expensive... Hire right or hire twice. Reducing costs and expanding your margin is great, but poor vendors, shoddy platforms, and low-quality hires can actually end up costing you more in the long run. 10. I WILL take the time to review, update, and forecast my business monthly, quarterly, and annually. Failure to plan is planning to fail. Growing and scaling brands need thorough planning to manage increasing fixed costs and risks. Establish a comprehensive annual plan with regular quarterly evaluations. Conduct monthly P&L reviews and expense audits to stay aligned with your long-term goals 📊

Resource planning separates successful firms from those constantly scrambling to meet deadlines 📊 Most finance teams operate in reactive mode, putting out fires instead of preventing them. I've worked with dozens of clients who struggle with this exact problem. They're always stressed, always behind, and wondering why profitability suffers despite working harder than ever. ➡️ CAPACITY PLANNING FOUNDATION You know what I've learned after years of helping firms optimize their resources? It all starts with forecasting your hours correctly. See, when you can predict workload based on historical data and upcoming client needs, you avoid that feast or famine cycle that absolutely crushes profitability. Monthly recurring revenue clients need consistent attention too. Don't make the mistake I see so many firms make by forgetting about them during busy season. Client volume scaling requires a completely different approach. Growing your client base means different staffing patterns and retention strategies. Plan resources based on both current clients and realistic growth projections. ➡️ BUDGET VS ACTUALS Track your planned versus actual resource utilization religiously. Variance patterns tell you exactly where your assumptions are off. Sometimes it's scope creep eating up resources. Sometimes it's inefficient processes slowing everyone down. Sometimes it's just unrealistic estimates from the start. Your resource planning gets better when you learn from what actually happened versus what you expected. Create accountability across your team so everyone understands how their work impacts overall capacity. ➡️ TIME TRACKING Without accurate time data, resource planning becomes pure guesswork. Monitor your billable versus non-billable ratios to understand true capacity. That administrative time still consumes resources and needs planning. Track project profitability in real-time so you can course-correct before it's too late. Waiting until project completion to assess profitability costs money. Use time data to identify productivity bottlenecks. Maybe certain work takes longer than expected, or specific team members need additional training. ➡️ STANDARD OPERATING PROCEDURES Document your repeatable processes and workflows. This dramatically reduces training time for new team members. Consistent processes mean more predictable resource requirements. When everyone follows the same approach, you can actually forecast capacity accurately. ➡️ CLIENT SCOPE DEFINITION Clearly define project boundaries upfront. Scope creep destroys resource planning faster than anything else I've seen. Set realistic client expectations from the start and stick to them. When clients want additional work, have a system to price and resource it properly. === Resource planning isn't glamorous work, but it's what separates profitable firms from those working harder for less money. What's your biggest resource planning challenge?

Recently connected with a friend who just stepped into his first Controller role at a Series B startup. He asked where he should focus to deliver the most value. Here's my playbook: 1️⃣ Working Capital Optimization Ensure customer billing/collections are timely and accurate Optimize vendor payment terms and processes Make payroll (including sales comp) bulletproof – this is non-negotiable! 2️⃣ Cash Flow Enhancement Review vendor spend and ensure alignment with company goals Implement lightweight purchasing controls (without bureaucracy!) Support sales with finance processes that enable growth, not hinder it 3️⃣ Reporting Excellence Build reporting infrastructure that powers decision-making Establish solid GAAP foundations to avoid surprises Streamline close processes to eliminate bottlenecks Secure auditors early and map the audit timeline Stay on top of tax compliance (saves significant $$ later) 4️⃣ Infrastructure & Talent Invest in high-ROI automation tools that create leverage Address critical knowledge/skill gaps in your team Maintain lean operations while scaling 5️⃣ Strategic Partnership Build strong cross-functional relationships, especially with Sales and Product Create reporting that help leadership make informed decisions What would you add to this list? At Inscope, we are on a mission to empower Controllers who take care all of the above. DM me if you want to learn more.

As CFOs, you understand the challenges of managing complex financial data across multiple systems. The struggle to consolidate and harness the full potential of our data is real. That's why I want to share some valuable advice on how you can unlock the power of data integration and elevate your financial operations. Here are key steps to consider: 1️⃣ Assess Your Data Landscape: Begin by conducting a comprehensive evaluation of your existing data sources and systems. Identify the gaps and inconsistencies that hinder efficient data management and decision-making. 2️⃣ Define Your Data Strategy: Develop a robust data strategy that aligns with your organizational goals and financial objectives. Determine the key data elements, metrics, and KPIs that drive your business, ensuring their integration and accuracy across platforms. 3️⃣ Choose the Right Integration Tools: Select data integration tools that best fit your unique requirements. Look for solutions that offer seamless connectivity, scalability, and the ability to unify data from disparate sources, such as ERP systems, financial platforms, and third-party applications. 4️⃣ Establish Data Governance: Implement strong data governance practices to ensure data consistency, integrity, and compliance. Define roles and responsibilities, establish data quality standards, and create processes for data validation and maintenance. 5️⃣ Leverage Automation and Analytics: Embrace automation and advanced analytics to streamline data workflows and gain actionable insights. Automated data integration workflows enable real-time data updates, while analytics tools empower you to make data-driven financial decisions. Remember, data integration is not a one-time effort; it's an ongoing process. Continuously evaluate and optimize your data integration strategy to keep up with evolving business needs. As CFOs, the best thing you can do is embrace the power of data integration to unlock the full potential of your financial operations and drive strategic growth. ________________________ 👋 Hi, I'm Brian. Thanks for checking out my Post. Here is what you can do next ⬇️   ➕ Follow me to see me in your feed   🔔 Hit the bell on my profile for Post notifications.   💬 Share your ideas or insights in the comments. ________________________ #dataintegration #financialmanagement #cfoadvice