How Your Company Could Benefit from a Virtual CFO

As a business owner or entrepreneur concentrating on growing your business, your main focus is likely to be on managing operations, attracting new customers, and recruiting and retaining talent. Often the company’s finances get overlooked. How would you like to have a virtual CFO working in conjunction with you?

What’s a virtual CFO?

A virtual CFO is a seasoned professional with financial expertise who can facilitate business growth, increase bottom line profits and help interpret financial information. But, rather than working full time in your company in the C-suite, the virtual CFO is a valuable outsourced professional with the financial know-how you need, on an as-needed basis that you determine together.

The ideal virtual CFO has integrity, a big-picture vision of your operation, and the ability to translate data into simple terms that you and your management team can understand and take action on.

The benefits of hiring a virtual CFO:

  • Strong knowledge of all things financial – Ability to help you make informed decisions on the right accounting software package or bookkeeping system.  Can also work knowledgeably with your tax preparer.
  • Insight into the drivers of business growth – Aptitude for cash flow, considerations around budgetary accounting, expenses, and tax implications of reporting revenues. This individual will help manage financial planning, accounting records and reporting as well as assist in determining when to take calculated risks.
  • Access to an experienced and skillful number cruncher – Keeps business on track by establishing a corporate budget that formalizes goals, identifies key performance indicators (KPIs) and sets milestones. Also, the individual can help control expenditures and acquire capital for a low cost.
  • Flexibility to accommodate growing businesses – At the ready to provide financial assistance when business needs dictate. Your virtual CFO is a quick phone call or email away, able to provide expert perspective on the financial implications of any business situation.
  • Cost-effective resource – Hire a virtual CFO at a fraction of the commitment it would be to hire an in-house employee. Savings are realized since there is no need for extra office space, computer equipment, payroll taxes, and benefits.

Many startups and mature companies fail, not because the business concept is poor but rather the execution is lacking, particularly from a financial perspective. Most small, mid-sized and large businesses can benefit from an experienced CFO to ensure that they are on the right track and stay that way.

CFO Your Way offers many of Northern New Jersey’s fastest-growing companies an opportunity to get the financial management expertise they require with the flexibility they want. If you need a virtual CFO to ensure that your business enjoys the benefits of having this professional on your team—but not necessarily in your office—contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs.

 

 

What is a CFO?

An organization is like a ship—the chief executive officer (CEO) is the captain and steers the company towards its goals; while the chief financial officer (CFO) is the rudder who works with the CEO to ensure that the company is financially sound in order to meet its business goals.

In essence, the CFO holds the top finance position in a company and is responsible for the financial affairs of an organization. A CFO is different from an accountant or a person who does bookkeeping. This individual is an accessible advisor, trainer and educator, who serves as an expert resource enabling organizations to make smart business decisions.

The CFO is in charge of the accounting department, budgeting, reporting, audits and financial business practices. All of these duties should be performed with integrity and undertaken in compliance with industry standards. Serving in an advisory role, the CFO will help develop and guide the finance strategy of the company based on market trends, projections, forecasts and in consensus with other senior members of the company.

Some organizations rely on the expertise of a CFO to handle the investments of the company as well. The CFO reports to the CEO and may be a part of the board of directors. For publicly held companies that report out to analysts, the CFO is the key driver and accountable to the Securities and Exchange Commission (SEC).

Small, mid-sized and large businesses can all benefit from an experienced CFO who has knowledge of QuickBooks, accounting principles, and key performance indicators, also known as KPIs. Most CFOs have their CPA certification and are highly skilled liaison to an external accounting partner when it comes time to prepare corporate tax returns.

CFO Duties
Treasury–presenting the company’s financial condition. This includes deciding how to invest the company’s money, taking into consideration risk and liquidity as well as the best mix of debt, equity and internal financing.
Controllership—reporting accurate and timely historical financial information about the company.
Economic strategy—forecasting the company’s financial future by identifying and reporting where the company is most efficient and how it can capitalize on this information.

CFO Your Way offers many of Northern New Jersey’s fastest-growing companies an opportunity to get the CFO management expertise that they require with the flexibility they want. Keeping tabs on your company’s cash flow, budget vs. actual income and expenses, forecasting and planning for the company’s future are all vital aspects of what a virtual CFO can bring to your business, whether based in New Jersey or out of state. After all, by offering “virtual” services, CFO Your Way need not work on your premises, especially given the convenience of Cloud computing.

If you need a CFO to help you ensure that your business only has a smooth sailing, contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation.

Things to Consider When Investing in Real Estate

Is Your Real Estate Portfolio Working for You?

Real estate investments can significantly impact your investment portfolio. However, adding real property is not necessarily an easy task. As with any investment, you need to do your homework and stay on top of your holdings to be sure your portfolio will yield you the best possible return.

Here are a few considerations:

  1. 1.  Make sure you know the market you are looking to invest in. You need to have a good sense of how properties in your market are priced. This is important to know when a good deal is approaching, according to U.S. News and World Report. If you buy at market price, you won’t make a great deal of money. You need to buy when a property is underpriced. In addition, make sure you really understand your investments in terms of geography, population trends and the needs of the community. This will help you determine if it is a viable asset, how long to hold onto it, and when to sell while the iron is hot.
  2. 2.  Rental properties can nicely bolster your portfolio. But they are not as simple as they seem. If you are not experienced with owning rental properties, you need to learn about property management, or hire someone to do it for you. In addition, you need to very carefully vet who you are renting to. Nightmare renters can turn your portfolio into a money pit very quickly.
  3. 3.  Consider a wide variety of real estate investments–commercial, warehouse, office, retail, medical, residential. It is also important for you to understand the level of involvement in each type before you take the plunge. Do your research.
  4. 4.  Carefully inspect your properties periodically. Make capital improvements as necessary. This will not only increase the value of your properties when you decide to sell, but also warrant higher rents.
  5. 5.  If you place financing on the assets in your portfolio, you will be in a better position to leverage your portfolio and expand your holdings.
  6. 6.  You can use a 1031 exchange to your advantage. The 1031 exchange allows investors to dispose of property and reinvest the proceeds in a new property in order to defer taxes that would otherwise need to be paid at the time of sale.
  7. 7.  When making financial decisions, examine your portfolio as a whole, not just each individual investment. Consider eliminating any individual asset that may be dragging the portfolio down.

Do you need help with your real estate portfolio? I can help you understand your real estate needs and make educated investment decisions. Contact CFO Your Way at 973-580-9175 to set up a consultation.

Wrapping up 2015 while planning for 2016

With the start of a new year, take the time to get your business’s financial affairs in order. If you haven’t been keeping track of things like payroll, subcontractors, your 401K or other retirement plan and credit card payments you made that may have tax ramifications, now is the time to look into this information.

W-2s

IRS Form W-2, the Wage and Tax Statement, is due to any employee you have paid wages to between January 1 and December 31, 2015. Besides salary, the form must also include tips, bonuses, sick and vacation payments, to name a few, a worker received. Employees must receive this form by January 31. It is important that as an employer, you make sure your payroll service has all the necessary information before processing for the year.

1099s

These forms must be completed and distributed to any subcontractor, independent contractor, or freelancer who has received more than $600 in payments in 2015. Just as is the case with W-2 forms, these must be given to their recipients by January 31, 2016. Any subcontractor who receives this form should have completed a W-9 form when you contracted with them.

SEP Plans

For those who are self-employed, consider a contribution to a SEP plan.  There are higher contribution limits than a traditional 401K, and you have until the date you file your tax return to make a contribution.

Tax Deductions on Credit Cards

Finally, go through your credit card payments for the year. Some of what you paid on them could be eligible as tax deductions, including payments for medical bills, legal fees, and contributions to charities.

While you’re doing this, prepare for the end of 2016 by setting up files and organizing this information now.

If you need help with financial planning for your business, reach out to me at cheryl@cfoyourway.com. Wishing you all the best for 2016!

12 Tips to Improve Your Cash Flow in 2016

“Cash is king” is a hard and fast truth in business. Cash is necessary to pay salaries, buy equipment and supplies, and pay the bills. It’s also important to have cash on hand for emergencies. So how can you improve the cash flow of your business in the upcoming year?
1. Prepare a budget: The best way to keep cash in hand is to not spend it frivolously. Make a budget and stick to it as closely as possible.
2. Anticipate future needs: In the process of preparing the budget, look ahead to see what you may need to repair or replace, or other areas where large cash outlays may become necessary.
3. Put emergency cash into interest-bearing accounts: A money market account with check writing privileges is a good option for keeping emergency cash working for you while it is easily available if you need it in a hurry. Money market accounts are safe because they are FDIC insured, and offer higher interest rates than checking or savings accounts.
4. Require deposits up front on all work: Many businesses ask for half of the total cost of a job before any work is done. This will protect you in the event of unforeseen circumstances, and give you cash to get started.
5. Offer discounts for early payments: You’ll get money faster this way, and encourage your clients to pay on time.
6. Make payment easy for your customers: Offer a variety of electronic methods of payment so that you won’t have to wait for checks to come in the mail.
7. Refinance Fixed Debts: With the low interest rates currently in effect, this can amount to a large savings of money, meaning more cash in your pocket.
8. Accelerate Payments: When possible, try to make extra payments on fixed debts to pay them off quickly. In the short term this may tie up cash, but the long-term savings can be a great boon to your business.
9. Delay Payments to Vendors: Pay your bills to vendors on the latest date possible, keeping your cash available longer. However, do not pay bills late, as this will harm both your credit rating and your relationships with vendors.
10. Barter: If possible, set up a trade situation with vendors, where you give them your product or service in exchange for theirs. Be sure your accountant is aware of this so the necessary adjustments can be made.
11. Repair, Don’t Replace: Do everything possible for as long as possible to repair large equipment rather than replacing it. Repairs almost always cost less than buying new equipment. When you do have to make a replacement, don’t be lured in by shiny new technology. Buy only what you need, and try to buy used rather than new.
12. Set up Bi-Monthly Payroll: You’ll save on administrative costs if you go from 26 pay periods a year to 24. In addition, if you require your employees to take direct deposit, you’ll save on check delivery as well. Move money into your payroll account as close to the end of a pay period as possible, to keep your cash earning interest.
If you need help with cash flow options specific to your business, I can help. Contact me at cheryl@cfoyourway.com for a consultation.