Accountability in FinancesChia-Li Chien
Chia-Li Chien | Apr. 12, 2013
My good friend Sam Ilardo is a valuable member of our Value Growth Strategies team. After six years in public accounting focusing on tax strategies with Arthur Andersen, Sam naturally migrated to the client side as a Tax Director. This position gave him the opportunity to be more involved with corporate treasury—the finance and strategic investment planning for the business. His focus was not as controller, but as someone involved in finance growth for the purpose of obtaining additional capital.
After twenty-five years, Sam made the decision to “give up the 9-5” and now enjoys providing advice to and mentoring companies as an independent finance consultant.
Do you need a Sam?
What is the story your numbers tell? Can you, or someone on your team communicate your numbers in a meaningful way? Can you put those numbers in historical sequence, comparables or performance relative to your competition? Or does being faced with getting that story together make you want to bury your head in the sand? (By the way, burying your head in the sand is NEVER beneficial to your business.)
You should know, when asked, not only your business value, but its inherent, transient and future value as well.
It’s likely that no one on your management team has come up through finance. A finance expert can help your team understand what is important to banks when it comes to obtaining capital and/or making investments, and what they need to do to make it happen as key employees.
Could you also need a person with a professional background and expertise similar to Sam’s to line up your management team’s KPI’s with your financial objectives? Could an outside finance consultant communicate more effectively than you why those objectives are important?
Sam related an opportunity he had to attend a three-week session at Harvard Business School on the definition of value. During that time, he took an intense, in-depth look at how to determine future value from what the business is making today. “Without having some kind of financial measurement of value, ”Sam says, “ it’s hard to understand whether or not you are on the right path.
In the past 15 years, Sam has stepped into enormous $3.5-$80B companies and led them in financial strategies that enabled them to:
• Take the company from public to private during a major industrial, global and economic shift.
• Focus on long-term objectives through acquisition as well as selling off low-performing or non-strategic divisions.
• Arrange sell/lease back situations to free-up capital for better investments.
• Change their business model.
• Hire a treasury team for credit collection and other finance team needs.
• Assist in acquisition integration.
Numbers tell all.
Sam reminded me of these easy-to-understand principles when it comes to capital:
- Most companies need capital to grow.
- For every $1 increase in sales, the company will need 25¢ in capital.
- This means a shift from burning up cash to generating cash.
- This is necessary for survival, growth, staying ahead of the completion and building business value.
Do you have someone who can come in, or who is already a part of your team to help you execute this simple principle? If you do, the team at Value Growth Institute can show you how to better utilize this in-house know-how. If not, we can help you figure out whether the decision to bring in an outside finance expert, such as Sam, is the right decision for your unique industry and market situation.
If you want to improve or don’t like the story your numbers tell, just call or contact us to find out more and for a brief evaluation and assessment. Let’s change your numbers story together.