I don’t know if you’re like me, but the reason I love money so much, it because I really sucked at it when I was younger.
I spent more money than I made, had credit card debt, and even had to file bankruptcy at one point. The reason I am so passionate about this topic is because I was such a mess.
But they say your mess becomes your message, so now I’m here to help you.
I want to give you four questions to ask your CFO, Accountant, Finance Manager, or whoever manages your business finances. Congratulations on growing your business to this point!Remember that you want someone who is strategic with a vision. They should understand marketing, human resources, and technology because these become the biggest money-sucks in your business. I don’t want your money to be sucked away.So, how will you make sure you are getting the most out of your financial manager?
I’ve compiled these 5 questions to guide you to help construct the best working relationship with this key hire.
1. What is my cash position?
It doesn’t matter how large your enterprise is, knowing your company’s daily cash position is one of the best exercises you can do with this person. Stress it’s importance and ask it more than once if needed. This will create teamwork and mental clarity around your finances to help you stay ahead.
2. Have them point out some key metrics for you to pay attention to.
Many times we refer to this as your ‘dashboard’. This will allow you to get an overview of your business’ financial health and its pain points. Things to pay attention to are sales, marketing, and ROI. Ask them to give you reports about your business that YOU understand.
3. Have them show you your profit and loss statements.
Remember, this is a new language. You need to make sure you are getting the information that you need. Ask them what the key metric is that you should be paying the most attention to. Track it. Optimize it. Things to consider are revenue, profitability, and productivity. That’s where the juice is.
4. What activity, resources, and sales results are most crucial for your business?
This could be the number of sales calls vs the number of sales that actually come from them. Think about what the highest income-producing activity is that you can do.
5. What does your capital structure look like 5 years from now?
This question is golden because it reflects on where you are today and tells you how much money you need in the future. You’ll be able to find some of this structure in your business plan. It will be a mix of equity and debt, so pay attention to your balance sheet.Remember, you don’t have to know these answers, but they should. This will help you get a beat on what is happening in your business.
We want to get your head out of the sand and your head into your business.