4 Questions to Ask your CFO at End of the Year

A lot can change over a year. Making sure you set aside time to sit down with your CFO and review your company’s past performance, finances, and future goals is crucial before entering a new year. Inside this blog, we’ve compiled our top 4 questions you should be asking during your discussions so that you can get the most out of your time together.

Question 1
How did the business perform versus expectations?

By diving into a discussion around your organization’s performance, you’ll get a comprehensive view of your strengths and where there may be opportunities for improvement in the next year.

Consider reviewing the following metrics to frame your conversation:

Revenue: Did your organization hit its initial goal? If not, where did you end up, and what were some key contributing factors to this? Many outside elements can affect a company’s revenue, including supply chain issues, cost of borrowing, staffing shortages, and inflation.

Profitability: Is your company continuing to grow and turn a profit? By analyzing your profitability, you’ll uncover your organization’s gross, operating, and net profit margins. This will give you a good insight into your business’s current and future effectiveness in generating profits, as well as other key considerations.

To gain a deeper understanding of your organization’s financial picture, you may also want to compare your current status to where you were at the same month last year and note any fluctuations that you find.

Cashflow: Understanding where your cash is going is essential to maintaining a financially stable business. By paying close attention to your cash flow, you’ll continue to gain deeper visibility into your company, performance, and what is happening behind the scenes.

Question 2
Are we getting the best deals from our suppliers?

With the economy changing rapidly, it is important to have ongoing conversations regarding the relationship with your suppliers. As you review this with your CFO, consider opportunities for a supplier review to be done multiple times a year by a current team member. If you have an expense management system, consider looking to your bookkeeper for these reviews, as they will have easy access to a comprehensive list of suppliers and amounts paid to them.

Question 3
How much time is spent on bookkeeping?

Is your current accounts payable method efficient? While it may have been at the beginning of the year; look at where your company is now, its growth, and other factors that have likely shifted over the year. Understanding if there is a more effective way to manage your books will allow you to find time and cash-saving opportunities.

If you still need to implement an automated expense management system, this should be a priority. This software’s goal is not to eliminate your bookkeeping staff but to provide team members with the time to work on other areas that will significantly impact the business, such as cash management or analyzing vendor relationships.

Question 4
How can we set realistic expectations?

As a closing question, consider the upcoming year, what you’ve learned from the past and where you’d like the business to grow. From here, you can discuss how to set realistic expectations and goals that you can push for.

Consider forming your discussion around some of the following points.
• The current economy vs. the predicted economy: What should you be aware of as you enter the next year?
• Volume implications: Can you continue to get the needed supplies in the quantities you’ll need? Do you need to create a backup plan?
• Product/service pricing: Do you need to raise your prices based on the current landscape?
• Cost of financing: Are interest rates predicted to go up? Are there other factors you should be aware of when considering financing?
• Cost increases – Review upcoming cost increases for the new year — COGS, wage increases, and other operating expenses

A few minutes at the end of the year will provide the clarity you need to start the new year in the right mindset. By understanding where your business has been over the last 12 months, you’ll be able to create goals aligned with your organization, where it currently is, and your future growth plans.

Whether you’re looking for a dependable partner to work alongside your company or need additional support on upcoming financial projects, the team at Part Time CFO can assist. We work with businesses across various industries to help make their financials a stress-free, streamlined task. Reach out to us today!