Preferred CFO

From Chaos to Clarity: A CEO's Guide to Smoother Year-End Closings As the year comes to a close, businesses often face the daunting task of finalizing financials. But the year-end closing process doesn't have to be overwhelming. Here are a few strategies to simplify it: 1. Automate Where Possible: Leverage accounting software to streamline repetitive tasks, from reconciliation to reporting, cutting down manual work and reducing errors. 2. Prepare Throughout the Year: Ensure that your finance team keeps financial records up to date on a monthly or quarterly basis, to avoid a last-minute scramble in December. If you need help with this, you may wish to consider leveraging the services of a qualified fractional CFO. 3. Standardize Processes: Create clear, consistent workflows for your finance team to follow. This ensures efficiency and accuracy, even when things get hectic. 4. Communicate Early: Align with stakeholders—both internal and external—about deadlines, expectations, and any changes in processes to avoid surprises. A well-organized, proactive approach to the year-end close saves time, reduces stress, and ensures you start the new year strong! You can learn more and benefit from the shared experiences of other CEOs by joining a Vistage Worldwide, Inc. group. Vistage has helped thousands of CEOs through executive coaching to new milestones. See https://lnkd.in/gjsXs8fi for more information. #PowerofVistage #Finance #Leadership #YearEndClosing #BusinessEfficiency #Automation #PreferredCFO

From the Balance Sheet to the Boardroom CEOs and executive leaders are expected to make decisions based on more than just instinct—they must be guided by data, and at the heart of that data are financial metrics. But numbers alone don’t drive change; it’s the interpretation and strategic use of these metrics that transforms them into a powerful tool for decision-making. How do you turn the information on your balance sheet into meaningful insights that drive growth, innovation, and long-term success? Here are some ideas that I often share during my presentations to Vistage Worldwide, Inc. groups: 1. Know the Metrics That Matter The balance sheet contains a wealth of information, but certain line items should command extra attention. Here are a few key metrics that provide real insight into your company’s financial health and long-term trajectory: > Return on Invested Capital (ROIC): This metric measures how effectively the company is using its capital to generate profits. A high ROIC indicates efficient use of resources and a focus on high-return investments. >Gross Margin: This tells you the difference between sales and the cost of goods sold (COGS). It's an indicator of pricing power, operational efficiency, and cost management. >Free Cash Flow (FCF): This tells you how much cash is left after covering operational expenses and capital investments. FCF is essential for reinvesting in growth, pursuing acquisitions, and returning value to shareholders. >Debt-to-Equity Ratio: A healthy balance between debt and equity financing is key to sustaining growth without overextending your resources. 2 Make Metrics Strategic, Not Just Operational By making financial metrics a core part of your leadership playbook, you can guide the company toward more informed, data-driven decisions. For example, if gross margin is steadily declining, it could indicate problems in pricing strategy, supplier relationships, or product positioning.The key is to use metrics as starting points for deeper analysis and strategic adjustments. Use scenario planning to stress-test strategies and evaluate different potential outcomes. 3. Make Financial Metrics Accessible and Transparent CEOs can empower their teams by ensuring that everyone—from department heads to front-line managers—understands the importance of these metrics. Always connect metrics to business strategy. Conclusion: From Metrics to Meaning Financial success doesn’t come from instinct alone—it’s built on the foundation of informed, strategic actions. The more you integrate financial metrics into your leadership approach, the better positioned you’ll be to lead your company toward sustainable growth and long-term value. To learn more, I suggest you check out https://lnkd.in/gjsXs8fi. Vistage has helped thousands of CEOs through executive coaching to new milestones. #Leadership #Finance #BusinessStrategy #CEO #FinancialMetrics #Growth #DecisionMaking #PreferredCFO #PowerofVistage

CEOs, particularly those in mid-size companies, face the constant challenge of balancing the need for innovation with the demand for efficiency. How you allocate capital will directly influence your organization’s ability to innovate, remain competitive, and operate efficiently. Here are five ways CEOs can develop a capital allocation strategy that fosters both innovation and efficiency: 1. Align Capital Allocation with Corporate Strategy As CEO, you should work closely with your executive team to define the company’s strategic priorities—whether it’s expanding into new markets, enhancing product lines, or improving operational efficiency. Only when these priorities are clear should capital allocation follow. Every dollar should serve a strategic purpose, not just address immediate needs. 2. Separate Core and Growth Investments A well-balanced budget recognizes the difference between core and growth investments. Core investments are those necessary to maintain and improve your current operations, promoting stability and efficiency. Growth investments, on the other hand, are aimed at scaling your business and introducing new revenue streams. Both are critical, but the ratio of spending on each must be carefully managed.Protect your existing assets while creating avenues for expansion. 3. Use Zero-Based Budgeting (ZBB) for Operational Efficiency Unlike traditional budgeting, where previous expenditures are used as a baseline, ZBB requires managers to justify every expense. This forces departments to align their budgets with actual needs, often revealing opportunities to cut waste and redirect funds to more strategic areas. 4. Adopt Scenario Planning One effective way to mitigate risk  in turbulent times is through scenario planning—determining how capital would best be allocated in various potential future situations. Keep your capital allocation flexible, so you can pivot based on changes in the business landscape. 5. Revisit Capital Allocation Regularly Budgeting isn’t a set-it-and-forget-it exercise. As CEO, it’s vital to establish regular checkpoints to assess whether your capital allocation remains aligned with your strategy. Periodically evaluate your Return on Invested Capital (ROIC) to ensure that capital is being used in the most strategic and impactful manner. For more ideas related to business finance, check out Vistage Worldwide, Inc. Vistage CEO groups have helped their members reach new levels of success through executive coaching. (https://lnkd.in/gjsXs8fi) #PowerofVistage #PreferredCFO #Finance #CEO

Turning Turbulence into Triumph Participants at my Vistage Worldwide, Inc. workshops often express concern about today’s ever-changing global economy, where market turbulence has become the norm rather than the exception. For CEOs, these volatile conditions present both significant risks and potentially game-changing opportunities. The key lies in recognizing the latter and having the agility and foresight to capitalize on them. Here are a few thoughts on how to do this. In times of uncertainty, the role of the CEO is critical. It is not just about steering the company through rough waters but also about spotting opportunities that can lead to long-term growth. Staying informed is crucial. CEOs need to be well-versed in the latest market trends, geopolitical events, and economic indicators. Effective leadership and clear communication are essential during such times. Employees and stakeholders look to the CEO for reassurance and direction. CEOs must be transparent with stakeholders about the challenges and opportunities facing the company. To capitalize on financial opportunities, a CEO must first be able to identify them. By leveraging financial data and analytics, CEOs can spot undervalued assets, identify potential acquisition targets, and assess the viability of entering new markets. Strategic partnerships with distressed companies can also be beneficial. By collaborating with such entities, CEOs can access new markets, technologies, or customer bases without the need for a full acquisition. In an unstable market, cash is king. Maintaining financial liquidity gives a company the flexibility to seize opportunities quickly, whether that means acquiring a competitor, investing in new technology, or expanding into a new product line. Unsettled times often spur innovation. Companies that invest in research and development (R&D) during these periods can emerge as market leaders when stability returns. When the market is volatile, cost control becomes more important than ever. CEOs must look for ways to streamline operations and reduce overhead without sacrificing quality or customer satisfaction. This might involve automating processes, outsourcing non-core functions, or renegotiating supplier contracts. While the potential for opportunity is great, the risks are equally significant. CEOs must avoid common pitfalls, such as overleveraging their companies or engaging in excessive risk-taking. It’s important to maintain a balanced approach that considers both short-term and long-term goals. By staying informed, being adaptable, and focusing on innovation and strategic growth, CEOs can uncover and seize financial opportunities that may not be immediately apparent. While the risks are real, so too are the rewards for those who are prepared to act with foresight and confidence. "The Climb" - the CEO leadership journey - isn't easy. But it's better with a group. https://lnkd.in/gad_XScj #ceo #powerofvistage #preferredcfo

I recently had the privilege of interviewing K. Scott Crawford of Preferred CFO. Scott is a recognized financial expert and a popular speaker at Vistage Worldwide, Inc. workshops. His unique perspective has helped a lot of CEOs and other top business executives to simplify their processes and enhance their profitability. Scott talked with me about the 1% daily improvement rule promoted by James Clear, Sir Dave Brailsford, and others. Scott taught me how this rule can be applied to business finance for huge gains over time. Here is a piece of sage advice from our conversation that I'd like to share: