Rankin McKenzie is excited and proud to be working with these amazing companies. Please join us in welcoming our newest clients and learn more about who they are and what they do:

Touchbase Global Partners, Hunter Rowe, MicroElastic Ultrasound Systems, Innovate Biopharmaceuticals, Mati Energy and Redwood Digital Group.

In our Proformative question of the week, Wayne Spivak, president and CFO at SBAConsulting.com, writes:

How important is industry knowledge to the CFO? My thesis is that all businesses are about 90% the same. They all have cash-flow issues, budgeting, products and/or services, ownership (of some type), taxes, and compliance issues.

Yes, depending on the industry, sector or sub-sector there are differences (about 5%-8%), but CFOs as smart, energetic individuals can solve those issues by either a) learning them or b) using subject matter experts (which they will need regardless, since one can’t be a CFO and a SME on all subjects).

The last 2%-5% is company culture.

So, how important is industry knowledge to the CFO?

Answering the question, one consultant says while many skills are transferable across industries, the 90% level Wayne refers to above is likely lower.

“There are many new-age industries emerging — high tech, data-driven service companies, a move to subscription revenue models, etc., that have nuances that not everyone has encountered in their careers,” says the consultant. “So in some cases I can see that the 90% level of commonality could be as low as 50% to 60%.”

Indeed, other respondents seem to think that industry knowledge is an imperative.

One European finance executive writes: “You don’t have to have it to begin with and you can certainly make improvements to a company’s bottom-line from a purely financial perspective; however, if you want to provide strategic business support to the CEO you better show you understand the industry.”

Agreeing, another finance executive says, “You cannot make the best decisions on numbers alone.”

But is industry knowledge really the expertise that the CFO needs to be a strategic partner to the CEO? A CFO responding to the post questions the premise:

“There is a propensity to conflate industry and business model,” he writes. [In my opinion], what is important is to understand the business model. Industry knowledge is much more constraining for the company and business models are easier to change or refine.”

He then provides an example: “In the SaaS world … where subscription models/contracts vary widely, [a CFO’s] revenue recognition knowledge from a different company may be useless to the new company.”

To see the responses to the question in depth or to add your own perspective to the conversation, go to the discussion on the Proformative website (registration required).

Original article can be found at http://ww2.cfo.com/strategy/2017/07/cfo-important-industry-knowledge/

“We are so happy to that Mike has joined the Rankin McKenzie team”, says Director of Business Development and Partner, Beth Mullaney.   Please read more about Mike and his experience – Mike Florio. 

Rankin McKenzie is excited to be working with these amazing companies. Please join us in welcoming our newest clients and learn more about who they are and what they do:

Ramey Kemp & Associates, NC State Bar, Scott Farms, BiospatialElement Genomics, Opex Technologies, Anexio, Aqueti Incorporated and 3 Birds Marketing.

“We are so happy to have Betty on the Rankin McKenzie team”, says co-founder John Autrey.   Please read more about Betty and her experience – Betty Larose.

Congratulations!

Congratulations to Majestic Marble & Glass!  We are so proud of the company for its growth and commitment to providing stellar products and services.   We are equally proud of Rankin McKenzie co-founder and CFO, Robert McKenzie, as he has worked with Majestic for the past five years and is a big factor in its success.

Read the full article here – A Brief History of Majestic Marble & Glass Co.

Rankin McKenzie is excited to be working with these amazing companies.  Please join us in welcoming our newest clients and learn more about who they are and what they do:

 Moon & LolaPediatric Possibilities,  Think Optimal, Progressive Element, United Drug Supply and Codeasite.

It is always nice to get recognition and we couldn’t be more proud of the work Alex provides. to her clients.  We are thrilled that she is providing value to CFOH   –  Click here to read quote from The Children’s Flight of Hope Executive Director, Stacy Barfield.

 

Please welcome Rankin McKenzie’s newest team member – Anna Hunter.    “We are thrilled that Anna has joined the RM Team”, says co-founder Robert McKenzie. Please read more about her background on the Rankin McKenzie partners page.

Anna Hunter

Many founders and CEOs of startups don’t spend a lot of time thinking about CFOs. When it comes to finance for a startup, founders focus on more pressing needs: What’s my burn rate? How long is my runway? How does our annual recurring revenue (ARR) look? How much more money do we need?

As an entrepreneur who has sold two companies over the past decade, I can speak from experience that it isn’t until a startup reaches some success — systematic product launches, lucrative partnerships, international expansion and reliable revenue growth — until they inevitably begin to ask The CFO Question.

Do the Old Rules Still Apply?

So when is the right time to bring on a CFO? Until recently, this was a relatively easy question to answer. Hiring a CFO doesn’t make much sense for most startups until they achieve “meaningful revenue”; annual revenues hit about $100 million or more; until the founders and board started planning seriously for an IPO; or other significant liquidity event. The old rules suggest it wasn’t the right time until you were 12 to 18 months away from an expected IPO roadshow, that you started looking for a finance chief.

But the old rules for when to hire a CFO don’t apply like they used to. One reason is that the job of the CFO and finance organization has changed. If you haven’t noticed, it is much more difficult in today’s climate. It seems like everyday we’re reading about CFOs getting fired or removed from their positions; case in point Walgreens and the City of Detroit. Reliant on traditional methods, the “bean counters” of the company are struggling to adapt into today’s world.

Nowadays, businesses are looking for their finance departments to do more than track and report results, close the books every quarter, and establish guardrails for spending. Today’s finance executives are expected to recognize that planning involves data, decisions and people – not just spreadsheets and budget mandates. They’re now expected to work across the organization to model the business for growth, develop potential responses to likely scenarios (good and bad), align new initiatives with monetization, and deploy resources and investments where they’d drive new revenue. As an example, look no further than Twitter CFO Anthony Noto, who took the helm over this past Summer but is now announcing strategic product news for the burgeoning company.

The CFO’s role is changing because modern companies like Twitter are competing in an increasingly data-driven, real-time environment. This imposes new pressures on finance to be more collaborative, to move its core financial planning and analysis (FP&A) process beyond the rarefied, highly trained domain of finance – which I call The Office of the Few – and bring it to the front-line managers whose activities and decisions directly impact revenues and expenses. That calls for much more than counting beans or simply new technology. It requires a change in process.

New Rules for a New World

These shifts suggest a change in hiring strategies for companies looking to bring on a finance guru. When it comes to hiring a CFO, don’t wait too long – and don’t hire too high.

Don’t wait too long. If you’ve held off on hiring that finance guru until the moment you have an IPO or other milestone in your sights, you’ve waited too long. You’ve missed at least a year’s worth of strategic planning that likely will benefit your business for years to come. You’ve missed crucial months that could have been spent identifying where you should place your biggest bets, your most valuable resources, and your most significant investments. You’ve let decisive opportunities pass by to structure your organization so it can scale as you bring on new customers, partners, business units and distribution channels. Wait too long, and you’ll make your new CFO’s job even harder once he or she comes on board.

Don’t hire too high. Startups too often set a trap for themselves by thinking only a CFO-level individual has what it takes to create a well-run finance organization. (They’re also not anxious to pay CFO salaries, which averaged over $200,000 in 2013.) But these days, you can bring strong finance talent aboard – a controller, perhaps, vice president or even director of finance – to lay the important groundwork needed to establish a high-performance environment. You need someone who understands the very unique relationship between data, decisions and people.

Even a mid-level finance pro can move an organization’s planning, budgeting and forecasting processes beyond Excel spreadsheets so managers have the data and analytics needed to understand those “what-if” scenarios and utilize predictive analytics and forecasting – the kinds of things that historically were stuck in The Office of the Few. Armed with the right technology, the right person can help shepherd their organization through the process of integrating data from internal sources like Salesforce.com, NetSuite or Marketo with external customer sentiment information from Facebook or LinkedIn, and even pull in supply-chain updates or weather forecasts to get a real-time picture of the factors that really drive the business.

Every day, I see companies achieve this without an IPO (or CFO) in sight. They trust in the person who understands the connectivity of data and individuals — someone who aims to make everyone in the organization play a little Moneyball. And when it finally comes time to bring on that CFO, you can bet he or she will have plenty of thanks for the team who enabled them to inherit a finely tuned machine, not the spreadsheet-driven mess they’re used to seeing, and that likely factored into their decision to leave their previous company and join your startup.


TechCruch
 , Posted by Christian Gheorghe is the founder and CEO of Tidemark, maker of modern cloud-first business planning and enterprise analytics 
solutions. Previously he was formerly SVP and CTO at SAP.