Financial Clean-Ups That Provide CEOs Direction

Running your own company – from designing a strategy to executing your plan – can be exhilarating. It’s why we do it. But let’s face it, keeping up with finances can feel like a burden, especially if you’ve fallen behind in tracking.

I deal with clients who face this problem all the time. CEOs have a ton on their plate and can easily lose sight of critical financial details. Once that occurs, getting back on track can be overwhelming, and in some cases, it can lead to poor decision-making and major setbacks.

In many cases, CEOs can’t get the funding they need or lines of credit.

One of the best, most direct ways of staying on top of financial management is to institute simple, routine habits with a financial clean-up. This process is painless, and with regular maintenance, it makes financial management a force multiplier.

What Is Financial Clean-Up? Financial Clean-up and Habits is a series of checkpoints instituted routinely that enable the CEO to stay on top of their balance sheet and financial capital. These checkpoints include cash flow analysis, bill and loan repayment reconciliation, and personnel expenses, among others. The key to success in this arena is to institute the Financial Clean-Up process on a regular basis and to face financial stressors head-on making corrections at the moment.

Getting Started. The process begins by organizing all transitions as a fresh list of cash going in and out—and to where—will get you moving. Next, identify outliers and expenses that you can offset or remove altogether. With all this information, you can create a cash-basis or accrual-basis report for everything from the moment you spend or earn. This includes the follow-up and if dues are paid yet. Once you’ve gotten into this routine, the clean-up process becomes second nature allowing CEOs to use financial analysis to break waves.

Accrual-Based Approach Drives Big Picture Results. I talk with CEOs almost every day who stick to cash-basis accounting because it’s what they know best. The process is simpler on a surface level, and business owners just have to look at bank statements. But at the end of the day, this approach can be shortsighted.

An accrual-based perspective allows you to take stock of the big-picture indicators like what your income will look like annually, comparing that to the state of the market and ever-changing variables. Ultimately, taking this long-term business approach will keep you healthy for a long time.

Get Comfortable With The Process. One of the most rewarding aspects of leading a Growth CFO business is getting to know so many companies and so many people. The Foresight CFO team has helped countless CEOs gain control of their finances and get to know their own companies better.

Like people, each business is unique, even within the same arena. Research and read around to learn more about what YOU need. Even if you need a role dedicated to solving some of these big-button issues, your path is up to navigating the specific obstacles to your business growth.

Originally posted on Forbes.com