Philip Campbell's Blog

Financial Forecasting for Serious-Minded Entrepreneurs (and CFOs): Free Webinar

I'm excited to announce a brand new, free webinar on the power of financial forecasting. The webinar will be presented live on October 14, 2014 at Noon Central time, 1:00PM Eastern time.

You will learn how to use financial forecasts and projections to enhance confidence, credibility and trust with everyone interested in (and invested in) the financial success of your company.

Creating the forward looking view of financial performance is a surprisingly effective way for entrepreneurs (and CFOs) to play a more strategic and vital role in the future of your organization.

Here's what happens when you create clarity and insight using financial forecasts:

• You discover the importance of identifying and focusing on the key drivers of financial performance
• You avoid nasty surprises
• You begin to view financial information as an effective decision-making tool
• You begin paying closer attention to the financial statements (because they take on new meaning)
• And not long after that, results start to improve. Profitability and cash flow begin to grow. And that puts a big smile on everyone's face!

There's never been a better time to take your game to the next level and jump into the exciting, rewarding and strategic aspects of helping build a business that wins financially.

And it all starts with becoming really good at financial forecasting. 

Free Webinar: Tuesday October 14, 2014 1:00 P.M. Eastern Time

We'll show you how to create a financial forecast you can trust... and how to avoid the single biggest mistake people make when creating a financial forecast or projection.

This webinar will help you tap into the unique and exciting benefits that financial forecasting can unlock for you, your CEO and your company as a whole.

And it's FREE. Register Now.

See you there!

 

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The A-3 Targets Exercise: Implementing Step 1 of the Monthly Financial Rhythm

Step 1 to driving your profitability and cash flow higher this year begins with the realization that your future should be brighter than your past. Your business should perform better this year than last or you are going to struggle to create a brighter future for yourself and your team.

Defining your goals and targets is the ideal way to kick off a brighter financial future. It is the beginning point of the Monthly Financial Rhythm.

The Monthly Financial Rhythm is the TARGET – MONITOR – ADJUST cycle.

It's about setting operational and financial TARGETS, MONITORING projected and actual financial results, and making ADJUSTMENTS in strategy and execution inside the business when results differ from the target or expectation.

It's a monthly process meant to speed up and improve your decision-making ability. A fast feedback loop makes it possible to quickly identify strategies that need to change when financial results are not in line with expectations.

Setting Financial Goals and Targets

The TARGET portion of the cycle is made up of the key financial and non-financial goals that drive from the vision and strategy of the company. A company in restructuring mode would have different targets than a company trying to scale and grow. The targets can change as well depending on short-term financial goals.

For example, one quarter you might have specific goals related to collecting receivables faster. Another quarter might include a focus on reducing a certain expense category. There will generally be 3 to 5 targets at any time. But the mix of targets or goals will vary during the year.

The A-3 Targets Exercise

I use the A-3 Targets Exercise to identify your financial goals or targets. I have found this to be incredibly effective with entrepreneurs. The A is for setting the annual financial targets. The 3 is for setting the 3 month targets that lead to achieving the annual targets.

The process begins by recognizing that your future should be brighter than your past.

Or at least, that should be your goal. You want to tap into the hope that motivates and inspires you to always work on becoming better at what you do. That includes your business.

The planning exercise begins with asking a version of The Dan Sullivan Question:

"If we were having this discussion one year from today, and you were looking back over that year, what has to have happened in your business for you to feel happy about your progress financially?"

The beauty of this question is it temporarily removes you from the day-to-day issues you are dealing with in your business. It encourages you to define what would make you happy from a financial perspective. It puts you in a place to look back and consider what needs to have happened in the business to make you happy.

It provides you a way to "begin with the end in mind" as Stephen Covey would say.

It stimulates specific questions like:

• What level of profitability would make me happy?
• How much money will be in the bank?
• Has the debt been paid down?
• What's the net worth of the business?
• How much could the business be sold for?

Those are some of the questions that come to mind when you put yourself one year out. It helps you get a sense for what you want to have accomplished, and what would make you happy with your progress financially.

The next question to answer is:

"Specifically, what dangers do you have now that need to be eliminated, what opportunities need to be captured, and what strengths need to be maximized."

Or, you could ask that same question this way:

• What problems exist now that need to be eliminated?
• What tools or capabilities are missing now that need to be implemented?
• What strengths exist now that need to be maximized?

These questions help you identify the HOW of achieving your financial targets. How are you going to deal with the problems in your way? What tools or processes are missing? And which strengths need to be enhanced or used more wisely to help you achieve your financial goals?

Creating the Future

As you go through these questions, you're painting a picture of what financial success should look like for you. What would make you happy as far as what the business needs to accomplish for you as the owner, or for the shareholders of the business.

The end result is you will have 3 to 5 annual goals, or targets, identified. And the same thing for your 3-month financial targets. This is step 1 of the Monthly Financial Rhythm.

These targets will then flow into the MONITOR portion of the Monthly Financial Rhythm.

Now that you have set your financial targets, you need to MONITOR your progress against those targets every month. The tool and process for making that happen is the Monthly Confidence Package.

And the third portion of the cycle is ADJUST. Every month, you need to review targets against actual and forecast results to decide if you need to make changes in the business to achieve your targets.

That's the secret to creating financial success every year in business.

Remember, your future should always be brighter than your past.

 

Controller's Conference Reminder

The 2014 Controller's Conference is going to be a fantastic opportunity to learn and grow. I will be presenting a session on using financial forecasting and projections to enhance your influence and credibility in your organization.

Dwayne Kolly, of the Business Bank of Texas here in Austin, will be presenting a great session on reducing your risk of fraud. Here is the session description:

Reduce Your Risks: Being Prepared for Fraud
Dwayne Kolly, CFO
Business Bank of Texas, N.A.   
Let's face it, if your business account has money in it, there are people who want it. They will figure out whatever way they can to take it away from you. While you're busy 24/7 providing superior customer service or cranking out the world's best widgets, there are folks who have nothing better to do than think up ways to separate you from your hard-earned money. We could be talking about folks who are thousands of miles away, or they may just as likely be inside of your organization.

Here's more information about the conference. It's Wednesday, September 24, 2014. I'd love to see you there.

 

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The Dan Sullivan Question

Sometimes a great question changes everything.

A great question can spark insight.

A great question can provide an exciting new perspective on a specific challenge or opportunity you are facing.

Dan Sullivan, founder of The Strategic Coach, asks this question in his book The Dan Sullivan Question: Ask it and Transform Anyone's Future:

"If we were having this discussion three years from today, and you were looking back over those three years, what has to have happened in your life, both personally and professionally, for you to feel happy with your progress?"

Asking yourself this question has power for a number of reasons.

First, it encourages you to project yourself into your future. You have to imagine yourself in a brighter future and look back to the present. Your mind then gets to paint a picture of what you worked on or accomplished in that space between the present and your future.

We seldom do that kind of imagination exercise without some sort of prodding.

Second, it helps you simplify and see the big picture in your life or your business. It helps you zero in on what really matters. What will really moves the needle for you.

Third, at the core of the question is the belief that your future should be brighter than your past. Or at least, that should be your goal. It taps into the hope that motivates and inspires us to always work on becoming better at what we do.

It's a fantastic focusing tool.

And a very powerful one… especially if you love making things happen in your business.

Take a couple minutes and ask yourself that one question.

 

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The Rearview Mirror is Helpful – But Only When Used Wisely

The rearview mirror in a car is a good analogy for how many people look at financial statements in their business.

The rearview mirror is a very useful feature in helping us drive safely. It helps us see if danger is lurking behind us. In fact, we generally have three rearview mirrors… and only one windshield.

It would be foolish to drive a car without rearview mirrors.

The Small View

But notice that the rearview mirrors are small.

And the windshield is very big.

The windshield even has wipers to make sure we can see through it no matter what the weather is outside.

It's just a fact of life that you need a really good view of what lies ahead in order to get where you are going safely on the road. And the faster you're going, the more important it is to have a clear view through the windshield.

Financial Statements

Generally speaking, financial statements represent the rearview mirrors.

They give us a number of different perspectives on what's already happened. What's interesting though is that business owners tend to think they don't have any financial information until they get their financial statements.

They see financial statements as the starting point for evaluating their financial results.

But that's not reality. That's not how business really works.

Financial performance in a business doesn't start with what happened. It starts with what we are trying to make happen.

The financial statements become valuable when we can see what actually happened and compare that to our financial goals and expectations.

The starting point for smart financial management in business is a reliable forecast or projection.

Read The Benefits of a Reliable Financial Forecast.

And The WHY of financial forecasting.

It will change the way you manage your business forever.

 

Click here to get my blog posts delivered right to your email inbox. I publish one new post each week. (Privacy Policy: I will NEVER rent or sell your email address and you may remove yourself from this list at any time you choose.)

I Will Be Presenting a Financial Forecasting Session for the Austin Chapter of the Texas Society of CPAs

I'm excited to be presenting a session on financial forecasting on September 24, 2014 in Austin, Texas. It's part of the very popular annual Controller's Conference event organized by the Austin Chapter of the Texas Society of CPAs.

I'd love to see you there if you would like to spend a little time here in Austin. J

I'll be presenting mid-morning for 50 minutes. Here is the session description:

Using Financial Forecasts to Enhance Confidence, Credibility and Trust
In this session, you will learn how to use financial forecasts and projections to enhance confidence, credibility and trust with everyone interested in (and invested in) the financial success of your organization. Creating a forward looking view of financial performance is a powerful way for CPAs in industry to play a more strategic and vital role in the future of their organization. Philip will show you how to create a financial forecast you can trust… and how to avoid the single biggest mistake CFOs and Controllers make when creating a financial forecast or projection.

Great Format

I love the way the conference is organized.

• It attracts Controllers and CFOs in industry (although everyone is welcome)
• There are eight different sessions/presenters during the day
• Each session is fast-paced and only lasts 50 minutes

One of the sessions I can't wait to see will be led by Bill Klein of Consero Global. Here is the session description:

The Accounting Department of the Future Has Arrived

Today, accounting professionals are being asked to provide more strategic guidance and insightful financial information, while at the same time making their back office and compliance processes more effective and efficient.  In this session, we will show you how high performance accounting departments are reducing the cost of accounting and delivering fast, accurate and insightful financial information to their leadership team. The intersection of cloud technology and creative outsourcing arrangements is creating exciting opportunities to forever change how accounting departments operate and provide value.  We'll show you exactly what it looks like and how it works.

Consero Global is Changing Accounting and Finance in an Exciting Way

Bill is the Co-Founder and President of Consero Global, an Austin based finance and administration outsourcing firm. Bill started Consero Global back in 2006 with Scott Tynes.  Consero has grown since then to 260 employees worldwide.

They manage all or parts of the financial operations of over 100 companies with combined annual revenues of $1 billion.

Through prior business experience, both Bill and Scott saw the need to help small & mid-sized companies gain more insightful financial information and improve their operational scalability using tools and capabilities that were once only available to larger companies.

Consero has been recognized for their growth by many publications over the years including the Austin Business Journal, Association for Corporate Growth, and Inc. Magazine's 500/5000 Fastest Growing Companies list.

And More…

The 2014 Controller's Conference is going to be a fantastic opportunity to learn and grow.

Here's more information about the conference.

I'd love to see you there.

 

Click here to get my blog posts delivered right to your email inbox. I publish one new post each week. (Privacy Policy: I will NEVER rent or sell your email address and you may remove yourself from this list at any time you choose.)