Role of the Chief Financial Officer
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The document discusses the challenges facing chief financial officers in closing the 2020 financial year due to the COVID-19 pandemic. It notes that staff may be working remotely, disruptions occurred, and systems/controls changed. Business conditions also changed as supply chains were disrupted and strategies changed. As a result, the CFO faces more issues than ever in the 2020 financial closing. The presentation then outlines the role of the CFO and some potential issues they may face in the closing.
Role of the Chief Financial Officer
- 1. COVID 19 has created significant business uncertainty and disruption! Unfortunately, with cases surging it seems as though it will be around for the foreseeable future. Year end financial closings place significant demands on the office of the chief financial officer and the financial closing for the year ended 2020 will be more demanding because: During the year staff may have worked from home and may continue to work from home during the closing. Staff disruptions may have occurred for health reasons or the need to care for another family member. Systems and internal controls may have change to accommodate the off-site working environment. Business conditions may have changed the nature or condition of the company. Supply chains may have been disrupted, the companies go-to-market strategy may have changed, cash flow issues may exist, etc. As a result the CFO may have more issues to address than ever before. This presentation addresses the role of the chief financial officer and some issues that may be faced in connection with the closing of the 2020 financial statements. 2020 FINANCIAL CLOSING DURING THE PANDEMIC! 12/17/2020COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 1
- 2. ROLE OF THE CHIEF FINANCIAL OFFICER 12/17/2020COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 2
- 3. CFO OVERALL RESPONSIBILITIES- MORE NOW THAN EVER! Leadership for the planning and execution of the organization’s financial functions. Reports to the Chief Executive Officer and the Board of Directors. Chief financial spokesman for the organization. Interfaces with Chief Operating Officer, Audit Committee of the Board of Directors, special Advisory Boards and other executive management personnel. Understands overall business goals and provides input into strategy and direction. Oversees financial functions within the organization. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 3
- 4. HOW CAN A MAP PARTNER ASSIST? MAP Partners have been CFO’s and are accustomed to the role of managing the functions of an organization. MAP Partners can: Act as a full-time, fractional/part-time, interim/transitional or consultative/coach. Provide a broad management role or focus on specific issues. Access support staff, if needed. Focus on support of CEO and board objectives. Manage the complexities of the Office of the CFO: o Controllership o Taxation o Treasury 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 4
- 5. ATTRIBUTES OF A MAP CFO High level of ethics and integrity. Broad and deep financial experience. Thorough understanding of financial reporting and internal accounting controls. Business and operational experience. Understanding of the use of technology. Frequently a certified public accountant and/or an MBA. Good communicator, internally and externally. Reliable. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 5
- 6. COORDINATING INTERNALLY The CFO and the CFO’s staff must communicate effectively with many internal functions in the organization. Effective CFO leadership and communication is important to adequately support the organization. Board of Directors Audit Committee Special Advisory Boards Legal Counsel Operating Personnel 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 6
- 7. COMMUNICATING EXTERNALLY An organizations effectively communicating the financial and operating results of the organization to outsiders is key to establishing credibility and trust. MAP partners have experience with effectively communicating with external parties such as: Independent accountants Investors Stock market analysts Regulatory agencies External legal counsel Customers Vendors 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 7
- 8. FINANCIAL FUNCTIONS Controllership Treasury/capital formation Taxation Financial planning and analysis Information technology Mergers and acquisitions 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 8
- 9. CONTROLLERSHIP A controllership function oversees an organization's daily accounting operations, including the accounting, payroll, accounts payable and accounts receivable departments, and the maintenance of the general ledger. Most MAP partners have come up through the ranks as accounting staff for a CPA firm or through the controllership function before becoming a CFO. Therefore, we are very familiar with the accounting and other issues that the controllership function addresses. However, we do not consider ourselves now as controllers and although we are willing to roll-up our sleeves, we believe that the detailed responsibilities of the controllership function should only be managed by the CFO and not performed by the CFO. This management function adds value by understanding new and existing accounting principles, evaluating internal accounting controls and understanding and explaining financial statements. If a company has a need for controllership staff, MAP can assist with locating an appropriate person or referring the company to an outside support organization. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 9
- 10. TREASURY/CAPITAL FORMATIONServices MAP partners can provide for an organization’s capital formation include the following: Debt/equity structure and cap table evaluation. Debt issuance, review of agreements, etc. New equity issuance/fundraising. Investor relations. We periodically respond to regulatory proposals. For example, we recently responded to the Security & Exchange Commissions “Proposed Exemptive Relief from Broker Registration Requirements of the Securities and Exchange Commission”. Please let us know if you would like a copy of our response. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 10
- 11. TAXATION A MAP partner can assist with the planning, supervision and coordination of the taxation function. However, the taxation function requires an intimate knowledge of federal, state and local tax regulations involving income taxes and sales and use tax issues. MAP partners have an overall understanding of these but rely on in-house or outside support for the detailed evaluation of tax issues and the preparation of tax returns. MAP as referrals that can effectively support the intricacies of the taxation function. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 11
- 12. FINANCIAL PLANNING & ANALYSIS We have developed a PowerPoint presentation titled “Entrepreneur at the Controls: Understand, Analyze and Explain Financial Statements and How They Relate to a Please let us know if you would like a copy, Financial planning and analysis serves a MAP Partner can provide include: Formatting financial statements and footnotes for better communication to management and outsiders. Review and analysis of financial statements. Preparation of financial and operation forecasts and budgets. COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 12/17/2020 12
- 13. INFORMATION TECHNOLOGY MAP has an affiliated company that provides leadership and execution for and execution of organizations technology and systems infrastructure. Headquartered in Atlanta they provide services on a national basis. The organization is lead and staffed by seasoned and experienced IT personnel that are focus on supporting the system and infrastructure needs of an organization. Please contact MAP for addition information and a referral for these services. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 13
- 14. MERGERS AND ACQUISITIONS MAP Partners have experience in M&A activity. For example, Bob Dickson was CFO of CardiacAssist (dba TandemLife) when it was sold to Livanova for $250 million and was CFO of Dynamet incorporated when it was sold to Carpenter Technology for $125 million. Services that MAP Partners can provide: Assistance with development of objectives, plan and strategy. Development of detailed plan and timetable. Financial modelling of alternatives and valuations. Identification of potential acquires and preliminary evaluation of each. Initial and detailed due diligence. Working with legal counsel on letter of intent and all documents. Assistance with development of data room. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 14
- 15. START-UP DURING A SHUT-DOWN? Having a trusted advisor is sometimes critical for a start-up of a business. MAP Partners can assist in the following ways: • Mentoring of founders. • Board of director members. • Strategic planning for start-up….form of organization, control issues, funding, etc. • Introduction to professional service providers….bankers, lawyers, insurance brokers, etc. • Interim CEO or CFO roles or assistance in recruiting staff. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 15
- 16. COACHING AND LEADSHIP AND DEVELOPMENT SERVICESMAP Partners have assisted in the development of a leadership development framework called the “Ten Pillars of Finance.” Using this framework we offer finance-specific leadership development programs for individuals and teams. We also offer special coaching and assessment opportunities for high performing professionals. Services include: Leadership Finance® program Leading the Office of the CFO™ program Finance Team Leadership Program (FTLP)™ for entire finance teams or individuals Individual Leadership Development Plans Self-awareness assessments and unbundling 360 assessments CoachingCOPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 16 12/17/2020
- 17. POWERPOINT PRESENTATIONS AVAILABLE MAP Services for Entrepreneurial Companies Overview of the Responsibilities of the Audit Committee of the Board of Directors VALUE ADDED: An Advisory Board Entrepreneur at the Controls : Understand, Analyze and Explain Financial Statements and How They Relate to a Business Cash Is King! Turn, Turn, Turn! Is the World Changing? Issues for CEO’s and CFO’s to Consider in 2021. Financial Reporting for Entrepreneurs 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 17
- 18. WHO IS McCRACKEN ALLIANCE PARTNERS? McCracken Alliance Partners (“MAP”) was founded with a vision of helping finance professionals reach their potential through becoming a leader that everyone wants to follow. MAP’s plan is to execute the vision through finance-specific leadership programs, peer networks, and providing CFO types services to solve companies needs. The MAP organization consists of CFO type partners throughout the U.S. who work by travelling or virtually. Additional partners are frequently added to provide additional resources and capabilities for clients. Additional information can be found at: 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 18
- 19. THE WORLD HAS CHANGED! SERVICES FROM ANYWHERE/ANYTIME!There is no longer a need for corporations to incur high fees to cover the overhead of advisors or consultant’s offices, travel, down time and other expenses. Many of these services can be conducted from anywhere with enhanced ability to stay in touch with and advisor or consultant. Technologies such as Zoom have enabled this significant change in business practices and when taken advantage of companies can have superior service with reduced costs. The quality of service is actually higher because distractions such as travel and office inefficiencies are eliminated. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 19
- 20. MAP’S COMMUNITY OF PROFESSIONALS In order to serve your needs, MAP works with and refers professionals that focus on other disciplines. For example: An information technology firm that is affiliated with MAP. Entrepreneurial law firms and lawyers. Investment bankers who work as registered broker dealers. CPA’s who examine the financial statements and provide tax services. Insurance brokers who have experience in specific industries. Investment advisors who manage financial assets. Please let us know if you would like a referral for any these services. 12/17/2020 COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 20
- 21. BOB DICKSON-MCCRACKEN ALLIANCE PARTNERS Bob Dickson, Founder of Dickson Consulting, is a partner with McCracken Alliance Partners (MAP). MAP is partnership of CFOs and finance executives experienced as public and private company CFO's whose skills and knowledge can create immediate value. Services include a full range of financial leadership services including full time or interim CFO's; board membership, particularly audit committees; advisory board roles; and performance of special projects. COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 21 12/17/2020
- 22. CONTACT INFORMATION Bob Dickson 724-272-1527 [email protected] www.mccrackenalliance.com Connect with me on LinkedIn https://www.linkedin.com/in/dickson1/ COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 22 12/17/2020
- 23. COPYRIGHT MCCRACKEN ALLIANCE PARTNERS, LLC 23 12/17/2020 Thank You!
Editor's Notes
- #23: MY CONTACT INFORMATION. BUT IF YOU WANT A COPY OF THE PRESENTATION SEND CHRISTIAN A CHECK WITH AT LEAST A $10 CONTRIBUTION.