Tag Archive for "Financial Intelligence"
Too many business owners wait to evaluate their operating and financial results until the after the year is over. I was often hired as a contract CFO when the business owner finally realized that many changes or course corrections needed to occur throughout the year. I find organizations that have advisory boards understand the need for reviewing results more frequently than once a year and in fact generally do so at every meeting.
Here are ten questions to consider when doing a mid-year or more frequent review:
- What’s keeping the CEO up at night? Do the financial results support the lack of sleep or is he worrying needlessly? Alternatively, what should he be worrying about?
- Where is the current year revenue level compared to the budget and last year? What’s in store for the next six months, higher or lower? This is important to know as it impacts expense levels and capital spending.
- Where are the current year expense levels compared to budget and last year? Have there been any surprises? What’s anticipated for the second half of the year?
- What are the hiring plans? Is the present staffing level sufficient to manage any upswing in the business now that recovery has started? Can this be done without burning out current staff that may already be overworked? What are the signs more staff is needed?
- What are the plans for purchasing equipment and facility upgrades? Does the company need to own or would they considered leasing?
- What needs to be changed in the marketing plan based on the results for the first half? How will changes impact expense levels?
- What do the accounts receivable and payable aging reports look like? How are customers paying? How are vendors being paid? How old are the oldest receivables? The older they get, the harder they are to collect.
- Will there be any bonus payout? About mid-year employees start to think about and even inquire about their bonus. Will the payout be delayed in order to preserve cash? What will be the message to those employees who will be affected? After all it could be the second or third year of no bonus and perhaps no wage increase.
- How are you taking advantage of the recovery? Are you developing new products or services? What are your competitors doing?
- Lastly, what gets you up in the morning about your business? Where is the excitement and enjoyment? If there isn’t much of either, perhaps it’s time to reevaluate what you are doing.
Many of us have ventured into very different and sometimes new territory as a result of the recession. The guides we previously relied upon may no longer exist. The only way to develop new ones is to take an active approach to reviewing your operating and financial results. Don’t wait…do it now!
Many seniors will graduate with an average student loans outstanding of $23,000, according to the Project on Student Debt an initiative of the Institute for College Access & Success. Therefore it is of critical importance to ensure your graduate understands how to manage payment so that the amount doesn’t grow to be overwhelming.
Michelle Singletary who writes the Color of Money column for The Washington Post recommends the CliffsNotes book “Graduation Debt: How to Manage Student Loans and Live Your Life” by Reyna Gobel. The book is comprised of twelve chapters that take a graduate from determining just how much is owed through how to manage it by discussing budgeting during different economic scenarios, paying off private debt, living a frugal lifestyle while having fun, managing debt in relationships, and how lenders view a graduate’s debt.
Graduation Debt is available as both a book and a PDF on the CliffsNotes website. The book is also available on Amazon.
If your graduate is light on financial literacy perhaps include this book as part of their graduation gift. Also steer them toward the Project on Student Debt where there are additional resources.
At the Financial Literacy & Education Summit 2010 that occurred on Monday, April 19th, Jennifer Kuperman, Head of Global Corporate Responsibility for Visa said: “Last September, Visa announced at the Clinton Global Initiative annual meeting that we would build on our initial commitment in 2008 and redouble our efforts to reach 20 million people with financial literacy worldwide by May 1, 2013. Today, I am pleased to announce that we are significantly exceeding our progress toward this goal and have already reached 10 million people with Visa’s financial literacy program.
A major component of our program is Financial Football — or Financial Soccer, as we call it here in the U.S. (Financial Soccer, an on-line game that teaches financial literacy, blogger’s note.) With FIFA World Cup fever building, we thought this was the perfect time to use Visa’s sponsorship of the world’s most popular sport to harness the passion for soccer and turn it toward financial literacy.
So far, Visa has translated the Financial Soccer educational video game in 10 different languages and disseminated it widely — at no cost — in many countries.”
The Summit, in its fourth year, is a collaboration between Visa and the Federal Reserve Bank of Chicago. The Summit’s purpose is to raise the awareness of the need for better financial literacy education and therefore create more financially literate citizens.
