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First, I have to assume you have done a thorough job of selecting this CFO while ensuring they have the skills needed to take control of the finance function – all while delivering the processes, systems, and insight consistent with your strategic plans and direction.

Second, despite every business owner’s belief (and to be honest, that often includes myself) that no one can operate their company quite like they do, the issues I first tackle as a CFO with each new job have been remarkably similar, no matter the company’s size or industry. Fundamentals count–they cannot be overlooked.  Nothing is “beneath” anyone, and the basics must be done with excellence before more advanced work is started.

I usually start by doing a lot more listening and a lot less talking.  Asking a lot of questions is key to understanding the business, its goals, and its critical processes. Here is an example of some of the key questions I like to ask right off the bat to give me some landscape of what I need to be focused on:

  1. Where are we on cash – now, next month, and at the end of the next critical strategic initiative? Do you know if our cash position can support growth?
  2. How is the sales funnel composed by period or by business unit? Does the sales funnel support the projected revenue growth?
  3. How should we be measuring the performance of the business? What are the right metrics to capture the true health of the business?
  4. What’s the best place for us to invest the next available dollar?
  5. What do I need to be most worried about? What are you most worried about?

Now, when I first break out my CFO toolbox, it’s usually to address any or all of the following:


First and foremost, I start with a look at the company’s financial statements (sometimes even a trial balance works fine), checking for inconsistencies or variances that pop off the page, as well as what’s missing, such as a statement of cash flows. To back up this review, I employ analytics to give me the company’s key financial ratios and provide me with a comparison of those ratios over time (and, if available, I love to benchmark against industry standards and/or competitors).

Once I’ve identified holes in the statements, I talk with the staff to get a feel for the financial reporting processes and learn who does what, when and how (e.g., who sees the statements and how errors are handled). From there I can figure out what the company needs to do in terms of staffing, training, processes and systems to make the statements more timely, accurate and, ultimately, more useful.


This area very likely needs attention and provides the quickest opportunity to improve a company’s cash position.  First, I run reports of the company’s receivables grouped by customer (largest to smallest), date (oldest to newest) and amount (largest to smallest). The customers at the top of these reports take first priority. Then I work to collect these high-priority items while weeding out and writing off the junk receivables that will never be reasonably collected.

Going through this process often highlights issues with a company’s AR system that I can quickly correct (it also can identify issues in sales, customer service, operations, etc.). More often than not, the billing process (not collections) is the major issue: Invoices aren’t sent immediately, are going to the wrong people or are filled with errors. A majority of the time, not being paid or not being paid on time is due to invoicing issues, not customer cash flow issues.


As CFO, I’m all about numbers, so I would work with you and your other key people to find out what makes the company tick and how to measure it. Sometimes the answer is simple, such as billings. But other times it may be units produced or quality measures. In those cases, we boil everything down to a few key performance indicators (KPIs), build a system to collect that data and a dashboard on our accounting software to track it. This way, whenever I’m asked, “How are we doing?” I have a precise answer.  Or, even better, the right people have direct access to the right information, whenever they need it.


Nothing harms a business and stresses owners (and company culture) more than cash-flow surprises. To avoid them, I quickly institute a formal cash-forecasting system. If cash flow is tight, I’ll build a rolling 13-week forecast that I update weekly. If the cash position is stronger, I might back off to monthly forecasting.

As time goes by, I’ll review the previous forecast with the next, determining why we were short or ahead on any given week. After a few weeks at this, the forecasts become remarkably accurate, which results in more confidence throughout the business.

Obviously, there is more to the CFO position than the above 4 items.  However, I believe that you need to tackle these areas first, and, if at all possible, don’t move on to other things until you’re done.  Remember, fundamentals count, and excellence in execution matters greatly.

Dan Lucas
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