Rob Milrod Archives - CFO Consulting Partners

CFO Consulting Partners is the founding sponsor of the C-Suite Fintech Advisory Workshop NYC group on MeetUp.com

February 12, 2021 By CFO Consulting Partners

CFO Consulting Partners is the founding sponsor of the C-Suite Fintech Advisory Workshop NYC group on MeetUp.com. Pre-pandemic the group was intended to be an in-person monthly discussion and networking event at our co-working space, The Home of FinTech | Rise, created by Barclays, For now, we’ve been meeting on Zoom the 2nd Thursday of each month at 11:30AM Eastern to discuss FinTech trends, answer questions and network. Membership has grown to 183 people over the last several months.

The next webinar will be held on March 11th. We welcome anyone who is interested in exploring FinTech from the C-Suite perspective. You can join the group by visiting MeetUp.com , creating an account and joining the C-Suite Fintech Advisory Workshop NYC group. Below is a recap of the discussions since our start in August 2020.

Rob Milrod Appointed Mentor to Barclays Fintech Accelerator Powered by Techstars

February 4, 2021 By CFO Consulting Partners

NEW YORK, NY, Feb. 4, 2021 — CFO Consulting Partners LLC, the Financial Management Consulting firm, announces the appointment of Rob Milrod as mentor to the Barclays Fintech Accelerator powered by Techstars. Rob will work with an impressive roster of nine startup founders and teams over three months culminating in an April 2021 demo day. Rob will partner with these early stage companies, as he does with our client base, bringing knowledge, experience, and perspective to financial strategy, planning and infrastructure. “I’m honored to be a mentor for the Barclays Fintech Accelerator powered by Techstars and in awe of the founders joining the 1st class of 2021,” said Rob Milrod, Director at CFO Consulting Partners LLC.

https://www.techstars.com/mentors?accelerators=barclays-nyc&accelerators=nyc¤tPage=3

Part 3 of 3: Building a Stronger Financial Management Process: The Audit: Don’t Get Scared, Get Organized

October 12, 2020 By CFO Consulting Partners

This is the third of a series of three short newsletters on how to stay ahead of finance process issues and prevent these challenges from becoming more significant problems. Each newsletter has addressed a different aspect of these challenges: Producing Data, Garbage In, Garbage Out, and The Audit: Don’t Get Scared, Get Organized (today’s topic).

As noted in the first two newsletters, a strong finance team is critical to the success of any company. One of the roles of the finance team is to prepare for and manage the external audit of the company’s financial statements. Several of the points covered in the previous newsletter, regarding controls over spreadsheets and data management, will also be helpful in preparing for the audit, but we recommend some specific steps below.

Challenge – The External Audit Takes an Inordinate Amount of Time to Complete

Many companies have experienced this, and it is human nature to blame the auditors, but there is usually more going on here. Here are some of the symptoms:

Documentation requested by the auditors is difficult to locate or does not agree with the accounting records. Documents that do not support recorded amounts are considered errors by the auditors, so they need to expand their testing and the expanded testing often finds more errors.
The audit takes much longer than planned, so accounting firm staff are reallocated to other commitments and replaced by staff new to the audit.
Once problems start Auditors are no longer committed to deliverable dates and are reluctant to commit to new dates, audit cost overruns become obvious and a sore point in the relationship with the auditors.
Audit fatigue sets in on both sides and it becomes very difficult to manage the process.

Action Plan, Step One – Prepare Well in Advance for the Audit

Review issues experienced in the prior audit and take steps to correct them before the audit begins. If certain transactions, or a class of transactions, have been challenging to audit in the past, or are new to the company, consider performing an ‘internal audit’ of those transactions so the issues with their documentation can be addressed before the audit begins.
Request a detailed timeline from the external auditors that includes key deliverables to and from them. Last year’s listing of schedules ‘Prepared by Client’ is a good place to start.
If the audit includes multiple locations, make sure the reporting from the auditors at the other locations to the auditors in the center is included. The auditors at the center, particularly at the staff level, may not see this as ‘their problem.’

Action Plan, Step Two – Proactively Manage the Audit

Insist on frequent (and brief) meetings between key audit firm and company personnel to assess progress. These meetings should be more often than once a week during the “heat” of the audit, daily 15 minute ‘stand-up’ meetings are a good idea during this period.
The objective of these meetings is to timely find and address issues (e.g., exactly who is to give what to whom).
On a weekly basis these meetings should seek to reaffirm that all parties remain committed to the ultimate deliverable of a signed audit opinion on the required date. Auditors may be reluctant to raise a concern about timing of completion in these meetings, as it can be a difficult conversation, but it is important to identify any potential problem early so it can be addressed.

Conclusion

A Company can achieve an effective and efficient audit by starting to plan well in advance of when the audit work is to be done and proactively managing the process from start to finish.

Written by Paul Karr, Director (pkarr@cfoconsultingpartners.com) and Rob Milrod, Director (rmilrod@cfoconsultingpartners.com)

Part 2 of 3: Building a Stronger Financial Management Process: Garbage In, Garbage Out

September 8, 2020 By CFO Consulting Partners

This is the second of a series of three short newsletters on how to stay ahead of finance process issues and prevent these challenges from becoming more significant problems. Each newsletter addresses a different aspect of these challenges: Producing Data, Consuming or Using Data (today’s topic), and Preparing for and Managing the Audit.

As noted in Part 1 of 3, Producing Data, a strong finance team is critical to the success of any company. In Part 1 we covered challenges and action plans around the process for producing timely reporting of business results and indicators. There are similar potential pitfalls when it comes to using or consuming the data to make business decisions.

Challenge — Lack of Clarity on Required General Ledger Account Details

Accurate data in the general ledger, and in supporting systems populated by staff outside the finance team, is critical. Bookkeeping and data entry errors make it difficult to rely on the information in the systems without laborious data cleansing exercises and adjustments. Also, if inclusion of a few digits in the account code when booking entries makes the difference in how information is processed, they must be used consistently. If not, this can lead to unmatched debits and credits, inflation of the balance sheet and eventual write-offs that could have been avoided.

Action Plan — Document the Process and Train the Team

Ensure that requirements for posting entries are well understood by the accounting, finance, and operations teams
Train the staff that processes entries to supporting systems to eliminate errors. Perhaps a visual aid with exactly how to book various entries may help
Enable automated error checking, and reconciliation capabilities to the extent possible
Have the accounting team review a sampling of entries monthly before the close as an opportunity to reinforce training and to randomly test for errors as part of a quality control process

Challenge — Over-Reliance on Spreadsheet Links for Reports and Analysis

An integrated system, whether finance and accounting or multi-function, is often beyond the resources of many organizations, both in terms of the cost and the time to convert from old process to new. As a result, finance, risk, and other staff often rely on spreadsheets which can proliferate and become very complex. With a strong foundation of process management and internal controls these tools can still support the needs of many organizations and make an eventual systems conversion far easier when the time comes.

Action Plan – Implement Data Management to Bring New Resilience to the Process

Produce an inventory of recurring reports and analysis – this is also a great opportunity to eliminate redundant or unused reporting
Review the data elements comprising the reports, including the source and definition, and to the extent that sources for similar elements vary, identify and agree on the source and definition – in effect, a data source inventory
Ensure that numbers are consistent across various reports by always using the data source inventory so, if and when spreadsheet links break, the data source inventory takes away the guesswork

Challenge — Financial Reporting Doesn’t Address Needs of Decision Makers

Financial reports should drive discussion through presentation of trend analysis, period and budget comparisons, and relevant metrics. If there are no questions or discussion when the CFO presents the financials, perhaps the information presented is no longer relevant.

Action Plan — Design Financial Reporting to Drive Performance

Focus reporting on performance by identifying the key indicators that are most critical to driving success
Include trend graphs to drive clarity on over / under performance and generate discussion on decisions and actions required to get back on track
Ensure that variance explanations versus prior year, budget and prior month are clear – this is important from a control perspective as well as for the analysis of business performance

NEXT – Part 3 of 3: BUILDING A STRONGER FINANCIAL MANAGEMENT PROCESS – PREPARING FOR AND MANAGING THE AUDIT

Written by Paul Karr, Director (pkarr@cfoconsultingpartners.com) and Rob Milrod, Director (rmilrod@cfoconsultingpartners.com)

CFO Consulting Partners Director Rob Milrod on the netguru Blog

September 2, 2020 By CFO Consulting Partners

Director Rob Milrod contributed to the netguru blog: “25+ Positive Effects of the COVID-19 Lockdown. Here’s What Fintech Executives and Experts Shared With Us.”

“Post-COVID, bankers can no longer point to adoption curves for color television, personal computers, and other innovations to make excuses for low digital and paperless adoption in their client base. Online self-servicing is taking care of itself, fueled by COVID-19 and its resulting long call wait times.”

Newsletter: Cash Forecasting

August 21, 2020 By CFO Consulting Partners

Cash forecasting, always important, becomes even more highly critical during times of economic disruption. Here are some key points to consider for an effective process:

1. Use a segmented approach to avoid over forecasting cash inflows. Consider customer segment, size, and seasonality – tax time could drive slower payment behavior for all types of clients.

2. Experiment with data that helps differentiate slower payers, e.g. credit ratings, industry, etc., to inform the forecast and contribute to faster collections.

3. Test solutions that help manage the lag between payments and collections; For example, tying accounts receivable team compensation to timely invoice issuance, offering discounts to slower paying customers for prompt payments, and perhaps requiring a partial upfront deposit from customers who regularly pay late.

4. Organize the forecasting approach and outputs in a consistent manner so that the accuracy of prior forecasts can be assessed. and so that it’s clear where to adjust management’s estimates.

5. For cash outflows, communication across the management team can make or break this process. Especially in a start-up where monthly spend patterns based on history are not available, there is no steady state to rely on. Management team members should regularly discuss and consolidate their outlooks for daily cash receipts and disbursements.

6. Start with prior bank statement activity to come up with typical monthly recurring items.

7. Map key bank statement items to actual expense so that the expense patterns in business plans and budgets can provide context for the cash forecast.

8. Identify cash items already expensed and therefore not in management’s outlook, as well as future capital outlays.

9. A detailed aging, accounts payable for outflows and accounts receivable for inflows, is a ready source of information for future cash flows and is extremely helpful in cash forecasting.

10. Take into account any cash flow benefits from the new Coronavirus Aid, Relief, and. Economic Security Act.

If CFO Consulting Partners can help your organization with additional support and skill sets of experienced accounting and finance professionals, please do not hesitate to contact us.

We hope your families, employees, and colleagues remain safe and healthy during these unprecedented times.

Written By: Rob Milrod, Director — rmilrod@cfoconsultingpartners.com

Part 1 of 3: Building a Stronger Financial Management Process

August 4, 2020 By CFO Consulting Partners

A strong finance team is critical to the success of any company. Sometimes, however, financial results are late, incorrect, or not issued at all due to problems in finance processes. For a smaller business, with just a few accounting and finance resources, staff turnover can instantly highlight any process weakness.

This is the first of a series of three short newsletters on how to stay ahead of finance process issues and prevent these challenges from becoming more significant problems. Each newsletter will address a different aspect of these challenges: Producing Data, Consuming Data, and Preparing for and Managing the Audit.

PRODUCING DATA

Challenge — Difficulty Getting the Books Closed

The team can become so shorthanded and/or overtasked that the work becomes overwhelming, resulting in a loss of discipline in the closing process including confusion on roles and responsibilities and inadequate time for a reasonable review of work performed. In these cases financial reports are sometimes prepared using estimates of revenue, accounts which are “booked to budget” or unreconciled, and other data points from outside of the accounting records.

Action Plan — Fill Resource Gaps and Re-introduce Closing Discipline

Plan for an adequate level of resources as a better alternative to late reporting and reporting errors, by either hiring additional staff or enlisting operations and other resources to contribute as a regular part of the closing process
If temporary resources are used, integrate those resources into the full-time team and make sure regular communication is taking place among the extended team members
Make sure roles and responsibilities are well defined, in writing, including review responsibilities
Develop a closing calendar with input from all affected team members; the focus should be on what is achievable, and expectations on timing of deliverables should be set realistically
Communicate the timing and nature of deliverables to senior management

Challenge — Integrating Information from Outside the Financial Process

This problem is directly related to the overall difficulty in closing the books. For example, an operations team can be responsible for initiating revenue transactions, revising those transactions, and forwarding the transaction information to Finance (via an automated or manual process). It is easy for this handoff to break down, causing delays and inaccuracies in recording revenue. This can be particularly hard to fix If the finance function is already experiencing some challenges, with finance and operations teams blaming each other for the problems. The good news is the recurring pain of dealing with this challenge should make the case for process improvement.

Action Plan — Regularly Reconcile Estimates with Actuals and Improve Critical Processes

Reconcile estimates to actuals regularly (at least quarterly), to avoid a year-end crunch that will delay year-end reporting and raise concerns from auditors or investors and directors
Get representatives of the operations and finance teams together to for a process improvement project. This can be a high-level gap analysis – an honest assessment of the current process vs. desired process and agreement on how to fix the issues. The detailed approaches of the Six Sigma, LEAN, or Continuous Process Improvement (CPI) methodologies are also useful.

Challenge — Little Staff Development, Communication, Documentation, and Training

When a senior member of the finance and accounting staff leaves the company, gaps in process management and training quickly become apparent. The team may not be clear on roles, closing steps, how to prepare board financials and other key analytics, and may have been performing tasks without knowing why.

Action Plan — Formalize Annual Finance Team Development and Back-up Plans

The Chief Financial Officer (CFO) should create a succinct written plan for the closing process. The document should address role descriptions, critical processes performed, and the back-up person for each critical process.
Review the plan with the finance team and senior management to ensure that critical processes are not overly concentrated with one person, especially the CFO, revise as needed and ensure that plans are made to close any skills gaps.

This planning process will provide an opportunity for development, preparation for assuming greater responsibility, and perhaps greater job satisfaction as the team understands the purpose and critical importance of the various tasks they perform.

NEXT – Part 2 of 3: Building a Stronger Financial Management Process: Garbage In, Garbage Out

Written by Paul Karr, Director (pkarr@cfoconsultingpartners.com) and Rob Milrod, Director (rmilrod@cfoconsultingpartners.com)

Cash Forecasting

April 4, 2020 By CFO Consulting Partners