Page 206 - Finanancial Management_2022

LEARNING RESOURCE

was to … report numbers accurately and
MBAexpress: Essence of Entrepreneurship make timely payments to employees and
suppliers.”
This course is designed to help entrepreneurs and finance Many small businesses look profitable
professionals who work with entrepreneurs with starting a on paper but have no cash in the bank due
business, creating a business plan, building a team, and dealing to poor basic accounting discipline. An
with the potential dark side of being an entrepreneur.
effective CFO will ensure cash flows
COURSE smoothly through the business from day
one. The good news is that there are
well-defined best practices and tools
available that even the smallest company
can implement to ensure control of a
Resources business’s finances from day one.
Articles Stage 2: Fuelling growth

“On-demand Career Paths for Current or Aspiring CFOs”, FM magazine, Stage 2 focuses on adding the capabilities
1 April 2019 necessary to enable, not just support,
growth. Here, the CFO’s role is to:
“Effective Financial Projections for a Startup”, Journal of Accountancy,
1 March 2019 Develop a compelling financial story
for investors
Podcast episode Raising capital to fuel growth is often the
“Starting Up: 3 Metrics Entrepreneurial CFOs Need to Watch”, FM magazine, area where a CFO can add the most value.
13 October 2021 CEOs are usually able to articulate what
makes a business special, but investors are
looking for a return on investment, not
just a cool idea. The ability to tell the
financial story that complements a
without effective finance and accounting understanding of and commitment to the business’s vision, strategy, and product
support. Typically, a startup cannot afford goals, objectives, and strategy of the offerings is essential to securing and
to establish a full-service finance business. CFOs often need to deliver bad retaining investors. Entrepreneurial CFOs
organisation replete with accountants, news, hopefully accompanied by sound can readily answer questions such as: How
controllers, planners, and tax specialists advice. They can only do this effectively if much capital is needed? How will it be
from day one. Finance capabilities need to the CFO’s goals and motivations are used? What returns can be expected? How
grow with the business, often starting with aligned with those of the rest of the will financial risks be managed?
part-time bookkeeping and then leadership team.
progressively incorporating additional Melanie Payne, CFO of Syniti, a Build credible forecast capabilities
skills. fast-growing, enterprise data management No business has the luxury of unlimited
The evolution of an entrepreneurial company, described the entrepreneurial resources. Successful management of
finance function has three stages. An CFO in a 2021 interview as requiring both growth is about optimising the allocation
entrepreneurial CFO understands the speed and agility: “The need to move faster of scarce resources, be it money, time,
requirements at each stage and identifies in how we make decisions [and] change talent, or materials. Efficient resource
when the business is transitioning from course quickly.” In the early growth stages allocation is predicated upon being able to
one stage to the next. They will prepare in this may not be a full-time job, but it does develop accurate forecasts, anticipate
advance to ensure that finance is never require discipline, focus, and potential positive and negative variances,
seen as an impediment to growth. Here is commitment. and take corrective action in a timely
a summary of the capabilities an fashion. The CFO must be able to identify
entrepreneurial CFO needs to deliver at Implement foundational finance the right data, select the most appropriate
each stage. processes tools and technologies, and build forecasts
Getting the basics right is job number one. that support timely decision-making.
Stage 1: Opening for business Being able to process basic transactions
Stage 1 is about being ready to support the such as collecting cash from customers, Establish a cost-effective and scalable
business from day one. The CFO needs to: paying suppliers and employees, and control and compliance framework
reconciling accounts in a timely and As a business grows, volume and
Establish a trusted adviser accurate manner is essential from day one. complexity increase. This in turn increases
relationship with the CEO Kunwar Chadha, FCMA, CGMA, described risk and adds new compliance
Trust is the basis for an effective CEO-CFO this succinctly in the December 2019 FM requirements. An entrepreneurial CFO
relationship, requiring a blend of strong magazine article, “What I Learned Being ensures that increased risk and
and relevant financial acumen with an the CFO of a Tech Startup”: “The first task compliance do not impede growth.

10 I FM MAGAZINE I December 2022