Florida CFO Group Blog

Helpful topics from Florida CFO Group's experienced CFOs

What You Need to Know About Cash Forecasting

Florida CFO Group partners Joe Price, Dick Trueblood, and Tom Walker discuss the importance of cash forecasting for small and large organizations.

Tom: Cash flow analysis is very important for a business to be successful. 82% of businesses fail due to poor cash flow management skills. It doesn’t matter how great a business model, how profitable, or how many investors a business has lined up. You will not survive if you don’t manage cash flow.

Joe: Knowing what your cash balance in the company bank account is NOT cash flow management.

Dick: Right. And just because your business is profitable, it doesn’t mean that it has good cash flow.

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How to Make & Keep Your Budget Relevant With Your Strategic Plan

Florida CFO Group partners Dawn Johnson, Mike Meyer, and Dan Polen discuss the importance of aligning strategic plans and annual budgets.

Mike: A lot of companies, and not just start-ups, struggle with planning and especially with aligning their annual budget and strategic plan.

Dawn: Yes, too often each is developed independently of the other without any effort to integrate them.

Dan: When this happens the annual budget is generally based on the previous year’s numbers and not on the strategic goals and objectives of the organization. I work with my clients on developing a strategic plan that creates an overview or picture for how the management team sees the company over the next three years. Then the shorter-term is managed to a one-year budget.

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Are Budgets a Waste of Your Management Team’s Time?

Florida CFO Group partners Betsy Bennett, Mark Brown and Harold Hale discuss the importance of budgeting and if comparing results to budget on an annual basis is an out-of-date practice.

Mark: Just as you do not need a map for your daily commute to the office, if your business is stable and doesn’t change month-to-month, quarter-to-quarter, you probably will not find a need for budgets.

Betsy: Some executives believe that our fast-paced world makes 12 months too long of a planning period.  That the farther we get from the actual planning, the less relevant the budget becomes.

Harold: Yes, but a budget creates a baseline plan for your expected revenues and expenditures and provides you with a map of where your operational capital resources are allocated. Then, when the unexpected happens – good or bad – you are able to respond more quickly.

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