No business should be running with their eyes closed. If you don’t have a formal budgeting or forecasting process, that’s essentially what you’re doing. No budget is going to be 100% accurate due to changing issues during the year, but it can provide a path to profitability and lead to areas of concern. Accurate forecasting is a valuable tool that can aid the business in many ways, including KOM management as well as enhancing credibility with current or potential investors and lenders. We can partner with your company to develop the necessary tools to provide both a reliable budget as well as a forecasting tool that can drive decisions on a daily basis.
Results Oriented vs. Full Time EE
A full time CFO for a small to medium sized company will draw an average salary of $125,000. Add in benefits and the total annual cost will reach approximately $150,000. That’s a large fixed expense to have on the books year round when their expertise may only be needed on a few specific projects throughout the year. Oxley CFO Advisory Services can provide that senior level management expertise without the same high cost overhead.
Cash Flow Analysis
As in all businesses, cash is king! No business can operate without it. Where is your cash going, where is it coming from, and more importantly, WHEN is it coming and going? Are there areas, processes or disciplines within your organization that are missing opportunities to increase cash flow? Let us take a look and find ways to improve the cash conversion cycle of your company.
When was the last time you did a deep dive on your financial statements? Have you looked behind the curtain on some of those expense accounts that seem insignificant in the big picture? Every dollar counts and we can evaluate every dollar is being spent in the most efficient manner. Are you purchasing the right quantities at the right intervals? Are you leveraging your suppliers to provide you with the best service possible? The lowest price is not always the lowest cost. We can drill down into your accounts and do the analysis to decide the difference.
Cost Structure & Analysis
Do you know what percentage of your total costs are fixed vs. variable? What happens if your sales grow by $100,000, how much of that will fall to the bottom line? What costs will be added to produce that $100,000 of revenue? Will new forms of labor, equipment, skills or facilities be needed, or can you leverage your existing resources to produce that revenue? Let us work through those questions with you and perform the analysis to come to the most profitable solution.
Third Party Perspective
Being inside the business every day, people get comfortable with what’s going on and the processes being used. They often walk by a piece of equipment every day and as long as it’s running, they may think the process is as efficient as possible. We can provide a set of fresh eyes to your shop floor and ask the critical and thought provoking questions to drive change and efficiency. We’re not afraid to take the young inquisitive child approach and keep asking the question, Why?…..why?……why? until you, as a business owner, get comfortable with the response being the best answer for your company.
Is your traditional accounting system truly reflective of everything involved to take a raw material from a supplier and turn it into something that gets delivered to a customer? Is there an in proportionate amount of costs inside your organization that are consumed with servicing just one or two customers? Is every raw material and process the same for every item? We have worked extensively with various industries to produce activity based cost models that not only provide an accurate cost structure of their products, but provide them a roadmap of that cost structure at different growth levels.
Do you have a set of Key Operating Measures (KOMs)that drive your company? Is there a set of data points, that at any time of the month you can access and gauge how the company is doing? Businesses are fluid and ever changing. You can’t afford to wait until the end of the month to realize you missed a KOM that drives profitability, but could have done something mid-stream if you’d only known earlier in the month. We can evaluate your business and develop a set of key metrics and tie them into your forecasting method to drive profitable change.
If your company is quickly growing or has seasonal demands that are putting a strain on your cash resources, getting outside financing may be your best option to taking the company to the next level or easing the stress during that lean part of the year. A lot of business owners may use the local bank, or simply don’t know what options are available because they don’t think their business is big enough to have many options. And in other cases, businesses may just not know what it takes to best present themselves to lenders. Financial institutions are always looking to lend money and partner with new businesses. We can put together the business plan and applicable financial information to best present your business to potential lenders.
Does the amount of coverage match the level of risk owners are comfortable with? When was the last time you reviewed your coverage, deductible levels and premium amounts on all your policies? Let us take a look and provide an opportunity to save money while maintaining or increasing existing coverage levels.