Improving financial leadership at emerging companies | CPA turned CFO | Mentor & Speaker | Managing Partner @ Ampleo Finance
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Without a system, finance and accounting leaders struggle. We can be doing a great job for one company, position, or client, then fall flat on our faces at another. Most commonly, we fail when we attempt to replicate systems and processes without really understanding what's important. Or, we focus on one area of finance (maybe the ones we like) when other areas need similar attention. I see accountants that fail to strategize, finance, and forecast. I see FP&A professionals with a lack of understanding or bias against accounting. But, it's all related. Failures in one area are manifest in other areas. Financial leaders need to create holistic strategies that unify all areas of finance and accounting. I teach professionals to focus on all areas of finance: Strategy Financing Forecasting Reporting Controlling Bookkeeping When I step into a new client, I conceptualize the system top-down. In other words, I first spend time creating the strategy. It usually doesn't take significant analysis to figure out where the problems and opportunities are. Usually, the key players are more than happy to share with me what it is they want to do and why. Then, I use simple modeling to figure out how to do what they want (or to suggest other options). Sometimes financing is required, whether debt or equity, which come with requirements that I must build out. Once I see how to do it, I identify the key lead and lag indicators to support the strategy. That guides the reporting requirements and the associated analyses. I then evaluate the accounting, making changes to how we measure, track, and score. Usually, at smaller organizations, I need the accounting team to be more active in controller- and FP&A- type functions. I need to free up their time. By simplifying the accounting, their work can be streamlined to provide time for more valuable efforts that really support strategy. I walk through all processes to gain an understanding of where changes can be made. All of which I just described is done in the conceptualization phase. This usually takes a 1-3 months. Then, we begin building. Although many of these areas can start simultaneously, it's best to focus one and a time from the bottom up. Without good accounting, you can't have good FP&A Without good FP&A, you can't support good strategy (and obtain financing if necessary) The buildout phase commonly lasts 3-6 months. It's important that the initial systems and processes around each section are simplified so the strategy can operating within the limits of the resources and capacity available at the time... ...including and especially yours!