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Featured News

Keep Your CFO Job – Ten Keys to Success (Revisited)

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Earlier this summer we had a great deal of interest in a newsletter we sent out on keys to success for CFO’s. As the article was sent around the 4th of July, we know there were many people on vacation who may have missed the chance to read it.  If you have already seen the newsletter, we apologize. If you have not had the chance to look through it and are interested in the material, it is attached below.

 

Keep Your CFO Job – Ten Keys to Success

By Allan Tepper, Co-founder and Senior Managing Partner, CFO Consulting Partners LLC

CFO Consulting Partners “fixes” broken Accounting and Finance functions.  I am often asked what critical elements are needed for CFO success. Being a CFO is one of the most important, yet short-lived jobs in corporate America. Many publications list the average tenure for a CFO at just 3 to 5 years. This turnover is due to many reasons, but at least some relate to how the CFO is perceived by the CEO and peers of the CFO.

 

To help the CFO evaluate his or her chances of long-term success, I have developed the following ten questions. While there are no guarantees, a good number of YES answers may be an indication of longevity with one’s present company.

 

  1. Are you an active and respected member of your Senior Management Team?
  2. Can you/do you talk frequently and fluently to the senior management team about the key drivers of your business (i.e. volumes, ratios, pricing, etc.), and about the external variables affecting the business (i.e. about the economy, and the industry trends, the competitors, the risks, etc.)?
  3. Is your department adequately staffed with high quality people, and is the staff viewed as efficient and internally client driven?
  4. When you report bad news, are you criticized? Have you put practices in place to identify and mitigate risks, so that when bad news happens, it is reported as one of the identified risks that went south?”
  5. Is your day-to-day department well managed? Do you provide your services quickly and in a quality manner? Is your own office neat and well organized? Do you consistently work more than 10 hour days?
  6. Do you feel more like a guiding light to growth and profitability than a policeman in your company?
  7. Do you or your Senior Management Team ever lose track of the fact that internal and external customer satisfaction is Job Number 1?
  8. Would your boss would say you think like a businessperson – growth, profitability, ROE, empowerment, motivation, a prudent amount of risk taking, etc.? Would they say you strike the right balance between the big picture and the details?
  9. Have you implemented a sound planning, budgeting and forecasting process? If so, do you have monthly or quarterly meetings with the profit center leaders to review results and identify risks?
  10. Is your audit completed within three months after the end of your fiscal year?

Ten Keys to CFO Success

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By Allan Tepper, Co-founder and Senior Managing Partner, CFO Consulting Partners LLC

I am often asked what critical elements are needed for CFO success. While there are no guarantees, here are ten questions that may help determine the answer. The more YES answers, the better.

  1. Are you an active and respected member of your Senior Management Team?
  2. Can you/do you talk frequently and fluently to the senior management team about the key drivers of your business (i.e., volumes, ratios, pricing, etc.), and about the external variables affecting the business (i.e., the economy, the industry trends, the competitors, the risks, etc.)?
  3. Is your department adequately staffed with high quality people, and is the staff viewed as efficient and internally-client driven?
  4. When you report bad news, are you criticized? Have you put practices in place to identify and mitigate risks, so that when bad news happens, it is reported as one of the identified risks that went south?
  5. Is your day-to-day department well managed? Do you provide your services quickly and in a quality manner? Is your own office neat and well organized? Do you consistently work more than 10-hour days?
  6. Do you feel more like a guiding light to growth and profitability than a policeman in your company?
  7. Do you ever lose track of the fact that both internal and external customer satisfaction is Job Number 1?
  8. Would your boss say you think like a businessperson – growth, profitability, ROE, empowerment, motivation, a prudent amount of risk taking, etc.? Would they say you strike the right balance between the big picture and the details?
  9. Have you implemented a sound planning, budgeting and forecasting process? If so, do you have monthly or quarterly meetings with the profit center leaders to review results and identify risks?
  10. Is your audit or review completed within four months after the end of your fiscal year?

Webinar: CFOCP Collaborates with Continuity

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On June 25th CFO Consulting Partners’ Director Chip Steppacher and Managing Director Eric Segal were hosted by Pam Perdue on a webinar focused on restoring Bank financial and operational performance in uncertain times. Follow this link to view a recording of the event:

https://www.continuity.net/regulatory-compliance-erm-resources/webinars-archive

Continuity ( https://www.continuity.net/ ) is a provider of regulatory technology (RegTech) solutions that automate risk and compliance management for the financial services industry.

Webinar: Leadership Opportunities Through The COVID-19 Pandemic

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On June 18th, 2020  CFO Consulting Partners Director Larry Davis and Managing Director Eric Segal presented a webinar with Northern New Jersey Community Bankers on Leadership Opportunities Through The COVID-19 pandemic. Crown Bank Vice-Chairman Paul Fitzgerald moderated the discussion and Jill Freeman of Employment Practices Group, LLC ( https://www.epgstrategy.com/ ) provided thoughts and advice on Organizational and Leadership Opportunities.

Click here for the Webinar Presentation

Middle Market Mergers and Acquisitions

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Jeff Appleman of CFO Consulting Partners joins the New York Business Brokerage Group Webinar Series on Middle Market Mergers & Acquisitions.

New York is at the epicenter of the Covid-19 Pandemic in the U.S.. Across the state, residents are sheltering-in-place and dealing with the health and finance issues posed by the pandemic. Business owners, meanwhile, continue to wrestle with the devastating economic consequences of the pandemic. Many have spent time applying for relief from the government, cutting staff and expenses, and assessing how to ensure the survival of their companies.

This has had a profound impact on mergers and acquisitions activity, which has taken a backseat to other, more pressing matters. As the pandemic continues, however, middle market businesses may eventually have to buy, sell, or merge with other businesses to preserve the value of their companies.

As the crisis continues, businesses may need additional strategies to preserve the value of their firms. One such strategy is to sell or merge their business. But that is not easy to do in the best of circumstances, much less during a crisis.

We will discuss this in our upcoming webinar:
Exit Planning Primer: Options on exiting your business on your terms.

Please join Kyle Griffith, CBI Managing Partner of The NYBB Group as he moderates a discussion for Business Owners on Exit Planning. Kyle and other industry advisory leaders will be providing information on how to exit a business; which options are available and how to prepare.

Joseph Milizio, Esq. – Managing Partner of Vishnick McGovern Milizio LLP
Austin Bransgrove, RICP®, CExP™, Managing Associate, Wealth Advisory Group LLC
Stephen A. White, CVA, Founder and Managing Partner of Onyx Partners Group
Jeffrey Appleman, CPA of CFO Consulting Partner

 

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Newsletter – May 2020

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Subchapter V of the Bankruptcy Code and How This Can Help Small Businesses

The unprecedented crisis brought on by the coronavirus has hit every facet of the economy. Companies that were operating profitably and with robust growth expectations have been decimated by the impact on the health of employees and customers, of stay at home orders and disruptions to supply chains. Federal and state plans to mitigate the impact continue to roll out, but it is clear that the economy will experience devastation not seen since the Great Depression.

In this time of uncertainty, companies must plan for every conceivable outcome. Small companies in particular are especially vulnerable and must assess all tools at their disposal in order to survive.

The purpose of this newsletter is to highlight a new provision of the Bankruptcy Code which can be a lifeline to small businesses. We intend to provide you with an overview of the features of the newly enacted Subchapter V of the Bankruptcy Code so you can understand this alternative as a means to survive the current crisis. The information presented below is for informational purposes only and should not be considered legal advice or opinion, which should only be sought from an attorney.

Subchapter V is part of the federal Bankruptcy Code that came about from a new law called the Small Business Reorganization Act of 2019 on February 19, 2020. Subchapter V is aimed at small business corporate and individual debtors, and it is intended at reducing the complexities of Chapter 11 by increasing efficiency, lowering costs and easing the plan confirmation process.

Initially, Subchapter V was limited to a person or entity with total debt of less than $2,725,625. The CARES Act raised this amount to $7.5 million; this higher amount will only remain in effect until one year after the effective date of the CARES Act, i.e. March 27, 2021. The one exclusion to Subchapter V is single asset real estate entities.

The advantage of a Subchapter V filing over a Chapter 11 filing includes the following:

There are no fees, apart from an initial filing fee. Also, administrative expenses may be paid over the life of the plan (as opposed to the date of the plan confirmation as with Chapter 11 filings).
Filing requirements are the business’ most recent balance sheet, statement of operations, statement of cash flow and tax returns, or a sworn statement that such documents do not exist.
Subchapter V has no creditor committee, unless the court orders otherwise.
The petitioner will submit the plan to the court and, if it meets certain requirements, it will be accepted by the Court.

Under a typical Subchapter V filing, the chronology of events is as follows:
A status conference will be held in bankruptcy court within 60 days of filing;
The debtor must file a report detailing efforts to reach a consensual plan of reorganization no later than 14 days prior to this conference, and;
The plan must be submitted for approval within 90 days. Extensions may be granted where there are circumstances for which the debtor cannot be held accountable.

The plan will generally be confirmed as long as all disposable income for the ensuing 3-5 years will be used to repay creditors.

If creditors can’t agree on the petitioner’s proposed plan, the Bankruptcy Court Judge may be asked to order the plan approved (a “cram down”). The success of the proposed plan would need to be demonstrated to be more attractive to unsecured creditors than a conversion to a Chapter 7 liquidation plan, which is usually very easy to be made.

A small business owner may continue to operate post filing as a debtor-in-possession and must continue to file the schedules and statements required of all debtors under the applicable section of the Bankruptcy Code. However, the court can strip a small business debtor of its debtor-in-possession powers for cause such as fraud, dishonesty, incompetence or gross mismanagement, either before or after the bankruptcy case or for failure to perform the obligations specified under a confirmed plan. In such an event, a Small Business Trustee would take over the operation of the business.

In summary, the advantages of Subchapter V over a Chapter 11 filing are costs, ease of filing requirements, ability of the owner to prepare the reorganization plan without having the involvement of a creditor committee and relative ease of confirmation by the Court as long as certain hurdles are met.

For business owners who are undergoing challenges, we hope that your firm will be able to successfully withstand the current crisis and be able to return to normalcy in the near future, and that you will not need to consider Subchapter V. However, we encourage you to consider this alternative if it can result in your firm’s survival. CFO Consulting Partners can assist you in seeking legal advice and assistance from our broad network of contacts in the legal field.

Finally, we wish the best to you and your loved ones for safety and continued good health.

The content of this newsletter is meant for general information purposes and is not to be considered legal advice or opinion. As with any bankruptcy or restructuring filing, you need to consult with an attorney to cover your own unique situation and circumstances.

By Mark Sloan, Director, CFO Consulting Partners, msloan@cfoconsultingpartners.com
David DeMuth, Sr. Managing Director, CFO Consulting Partners, ddemuth@cfoconsultingpartners.com

Allan Tepper Speaks on M&A: Update Post Covid 19 with Kathy Boyle of Chapin Hill Advisors

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Chapin Hill Advisors’ panel of experts shares insights on what deal flow is taking place, what is stalled and what opportunities are out there. Listen to our experts: M&A attorney, Dennis O’Rourke w/ Moritt Hock & Hamroff LLP; Ron Lehman, MD Bruderman Brothers; Keith Dee, President Osage Advisors & Allan Tepper, co-founder CFO Consulting Partners take us through their views on the current state of affairs. What deals are going forward, which ones are in triage; are PE firms going to add to their portfolios and more. Moderated by Kathy Boyle. The link for the video can be found here.

Thoughts About Your Accounting Close and Financial Reporting with a Remote Workforce

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Many businesses are adopting social distancing strategies, including increased use of remote workforces to adapt to and fight through the Covid-19 crisis. Completing monthly, quarterly or annual financial reporting activities can be challenging to accomplish remotely, so we share our experiences in assisting clients to do so in this article. With thoughtful management, the efficiency and effectiveness of accounting and reporting processes can be maintained as much as possible with a remote workforce.
The physical separation of remote workforces adds difficulty to all involved. While many of the tools used under “normal operations” continue to be effective, the remote nature of the workforce may change the way in which the work product is compiled and assembled. It will also change the interaction needed between team members to complete, review and perform quality control on the work products. Therefore, leaders need to make extra efforts to overcome the difficulties of operating remotely.
  • Clearly define goals and project plans, and monitor and report on status. These disciplines are more important now than ever before to enable processes to run smoothly and avoid fire drills that are even more challenging in a remote environment.
  • Communicate more than “normal” so that everyone can become comfortable with remote work and interactions.
  • Ensure that the technology and information security requirements are in place so that your team can operate effectively on a remote basis
Working remotely and meeting critical finance, accounting and reporting deadlines requires significant focus to optimize team structure and workflows.
  • Use detailed project plans, checklists, timelines and other mechanisms to define project requirements, clarify roles within the team, identify dependencies, and communicate status. Monthly and quarterly closing checklists and similar outlines are extremely helpful for all required deliverables: Board and senior management reports, press releases, SEC reporting, etc.
  • Make resources available to all who need them in real time.
    • Develop a file storage plan and use it consistently while maintaining appropriate access security over those files. Typically, companies will create a central folder for each period’s financial reports.
    • Finished work products should be stored centrally and shared according to agreed-upon nomenclature so that team members can locate and process as needed.
  • One individual should own a document and be the gatekeeper for changes proposed by internal preparers, executive management, external legal and accounting advisors, investor relations etc.
    • The gatekeeper should maintain version control so that reviewers can easily identify updates to the documents. “Track Changes” and blacklined documents help focus reviewers’ efforts.
    • Establish deadlines for comments and limit the number of drafts to minimize time spent processing successive versions. Relevant comments will always need to be considered but avoid excessive wordsmithing once you have a solid document.
Success as remote team is tied to many factors: Convenient and secure access to information. Clear project plans and access to effective project management tools, deploying team members effectively and relentless communication while supporting individual needs for job satisfaction, growth and enrichment.

Case Study 2020 Business Services Assignment

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Issue:
The Board of a recently acquired Private Equity portfolio company had identified significant deficiencies in the accounting/finance function, most importantly the department’s inability to produce accurate and timely financial statements/reports. There was no confidence in the finance department and the company lacked a permanent CFO.  The company needed an assessment of the situation and recommendations on how to fix the problems.

 

What We Did:

We first performed an assessment and reported back to the Board, identifying multiple deficiencies, many of which contributed to the inability to produce accurate and timely financials. We also completed a staff assessment and worked with an executive search firm to develop a profile for a CFO. We provided specific examples of each deficiency and possible remedial actions. CFOCP was then engaged to address the deficiencies, and work with company personnel to remediate them.  CFOCP worked with the finance staff to develop a detailed closing calendar and identify and execute steps needed to remediate the deficiencies. Along the way, CFOCP made several recommendations to improve the tools and processes used by the accounting department, implement best practices and improve internal controls.

 

How We did It:

During the engagement, we encountered some accounts with unsupportable general ledger activity. In accounts such as Accounts Receivable, which should tie to the subsidiary ledger, netting entries were being recorded by the client to ensure that the balances agreed. This practice resulted in some GL accounts not having subsidiary ledger that supported the GL balance. In addition, the reconciliations included a significant amount of aged reconciling items which lacked adequate support.
The client’s allowance for loan losses policy was aligned with its UK parent, however, it was not GAAP compliant. We drafted and implemented a new policy to ensure compliance.
We also helped the remaining staff to step up and expand their knowledge and understanding of the systems and processes. Previously they had done some processes by rote at the direction of the former controller. We provided training for both the local and international finance teams and documented the processes as we went along.

 

Conclusion:

In this engagement, we collaborated closely with local and international finance teams and the auditors. In the end we were successful in ensuring the client’s financial statements and supporting documentation were complete and accurate and the auditors issued a clean audit opinion on a timely basis as required by the regulators. We also provided the CFO with documentation of the financial and reconciliation processes.
by Dave Northrup, Director, CFO Consulting Partners

View Our Webinar: Business in the Time of Coronavirus

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The link to view the webinar, Business in the Time of the Coronavirus can be found here.

Information on the event can be seen below:

How can your business adapt to the new normal and plan for an uncertain future? How can the provisions of the CARES Act and other related stimulus help your business now? More importantly, how do they actually work in practice?

Our panel of experts will answer your questions across a range of disciplines.

You also have the opportunity to put forward 3 questions in advance and we will ensure they’re answered on the day. You will be asked to submit questions when registering.

Moderator:

Mark Taylor, Vistage: Leadership

Our Panel of Experts:

Craig Teahen, Freeman Clarke: Tech & Digital

David DeMuth – CFO Consulting Partners: Finance

Allan Tepper, CFO Consulting Partners: Finance

Jason Rimland – Tannenbaum Helpern Syracuse & Hirschtritt LLP: Legal & Benefits

 

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