From Reactive Participant to Proactive Leader

CFOs are now expected to deliver a finance organization that gets the numbers right (“Reactive Participant”) and to partner with CEOs, Boards and Shareholders in shaping the company’s infrastructure, corporate governance and strategy (“Proactive Leader”).

Reactive Participant

Stewardship

  • Protect assets of business.
  • Analyze historical performance.
  • Perform transaction accounting.
  • Report on costs.
  • Reconcile ad hoc financial systems.
  • Manage an overload of targets, measures and controls.

Operator

  • Optimize back-office structure and payroll processing.
  • Standardize process and data.
  • Leverage technology spend and ERP.
  • Eliminate unnecessary processes.
  • React to compliance, tax and regulatory issues.

Financing and Investor Relations

  • Manage bank relations.
  • Manage working capital and cash.
  • Hedge (e.g., commodities, foreign currencies, interest).

Expanding Role of a Proactive Leader

Enhancer

  • Develop analytical tools and key performance indicators (“KPIs”).
  • Promptly analyze the business & provide highly reliable forecasts (i.e., understanding run rate) and then suggest improvements.
  • “Enable” business managers to respond to events.
  • Anticipate information requests from stakeholders.
  • Optimize treasury, cash and working capital and minimize total cost of capital.
  • Advise and set-up organizational and governance structure between companies including technical/management capabilities (“Talent Management”).
  • Evaluate shared services options.

Strategist

  • Provide input into strategic decision-making, both domestically and internationally.
  • Influence the future direction of the company and align business and finance growth strategy.
  • Maximize investment portfolio (i.e., products, customers and business units) across markets.
  • Develop strategic rationale for:
    • Alliances and joint ventures.
    • Acquisitions as well as candidate screening, negotiation and other support.
  • Identify trapped segment value.
  • Manage financial (e.g., tax, credit ) and business (i.e., markets, length of terms of contracts, fixed cost base, hedging, insurance coverage) risks.

Catalyst

  • Stimulate and drive the timely execution of change in the company.
  • Assist and drive business improvement initiatives (e.g., procurement/supply chain, pricing execution, capital expenditure, financial and operational reporting) including stabilization of financial and operating performance.
  • Align the structure (and incentives) of the organization and manage costs for current and expected requirements of the business.

CFO new role requires them to be transformers, including helping senior management maximize revenues and profits from income streams by defining growth strategy and providing transparent information.

Expanding Role of a Proactive Leader

Farrell Advisory provides proactive leadership and partners with CEO’s, Boards and Shareholders/Business Owners in shaping the company’s corporate governance, reporting, infrastructure and strategy and develops effective leadership to ensure a disciplined operating model and profitable growth.

Building a Proactive Finance Leadership Team which operates Strategically

Farrell Advisory addresses Business Requirements, Operating Procedures, Technology and Organization Design to Provide the Tools to be a Proactive Finance Strategic Leader.

Strategy

  • Define and set medium to long-term strategic objectives (e.g., growth, borrowing capacity, new markets and new lines of production and optimizing resource allocations).
  • Evaluate and mitigate risks.
  • Assess revenue streams (e.g., customer, contract, product, business unit, market and work force) and define performance improvement initiatives.
  • Define tax efficient group structure.

Business Planning & Performance Analytics

Business Planning

  • Define plans and set operating and capital budgets.
  • Forecast performance of business and proactively reallocate resources.
  • Develop 13 week cash flow models.

Performance Analytics

  • Understanding business requirements of readers and define:
    • Financial and operational reports; and
    • Dashboards and key performance indicators.

Performance Reporting Systems Optimization

  • Improve accuracy and speed of consistent reporting of historical results and forecasts.
  • Provide actual versus budgets/forecast variances and analysis.
  • Provide financial and operational (e.g., pipelines, sales force, marketing, customer satisfaction, supply chain) analyses for business unit leaders.

Financial and Business Operations Transformation

  • Design and set-up stable and efficient financial and back-office organization.
  • Eliminate redundant processes.
  • Improve financial and business (e.g., sales pipeline) systems and processes via efficient use of technology and well documented procedures.
  • Manage and authorize work flows efficiently with strong financial and business controls.
  • Align organization and define and implement cost reductions and RIF planning.
  • Review and strategically manage sourcing and suppliers.

Working Capital Management and Treasury

  • Manage and benchmark working capital and cash acceleration.
  • Reengineer order to cash process.
  • Improve inventory management controls and reporting.
  • Maximize asset efficiency (e.g., leased versus capital purchases).

Corporate Governance and Transparency

  • Set, define and author:
    • Organization chart;
    • Roles, responsibilities and service requirements by position and department; and
    • Accounting and authorization manuals.
  • Good corporate governance and proactive boards which clearly understand their roles and responsibilities.
  • Set reporting requirements by position and department so there is transparent reporting.
  • Develop incentive plans align with strategy.

Valuation and Expert Witness Services

Transactions & Restructuring

Transactions and Restructuring

  • Fair Market Value.
  • Fairness Opinions.
  • Solvency Onions.

Accounting

  • Valuations arising from business combinations in accordance with Accounting Standards Codification 805 and 350.
  • Fresh Start Accounting.

Gift & Estate Taxes and Awards

Gifts & Estate Taxes

  • Valuation of private companies for gifts and inheritance purposes.

ESOPs and Incentive Stock Plans

  • Valuation of employee incentive plan stock for tax purposes and setting performance targets.

Damages & Expert Witness

Damages Assessment

  • Establishing and defending the value of a business in the context of potential litigation.
  • Critiquing the analysis of other experts.

Expert Witness

  • Advisory and expert witness support for disputes.
  • Experienced in federal, state and bankruptcy courts.

The value of a company and other business entity is an elusive concept which changes over time. For a publicly-traded corporation, value is typically determined by the market. For a private company, value must be established through careful analyses by experienced experts. A going-concern usually has a value which deviates from the accounting value of its underlying assets. Reasons why you might need a valuation analysis are varied and include transactions, restructuring, gift and estate taxes, financial accounting, damages, ESOPs, incentive stock plans and expert witness testimony.

International Listed Health and Retail Company (Confidential)

Financial Advisor for $50M fund raising

Dawsongroup plc

Group strategic, M&A targeting and Interim CFO roles including carve out of 50% of business and negotiation of M&A contracts

Lynx

Group Interim CFO & Strategic roles and M&A targeting roles

International Tunneling Co. (Confidential)

Identify potential acquisition targets

Government Contractor (Confidential)

Review acquisition strategy and identify potential acquisition targets

Portfolio of PE Firm (Confidential)

Performance improvement of $3.5B government contractor

Vitro

Creditors advisory for $2.4B distressed international glass manufacturer

Consumer Apparel (Confidential)

Advisor (restructuring and refinancing) to CEO and board of distressed $60M athlete wear retailer

Portfolio of PE Firm (Confidential)

Diagnostic review of $150M energy cleaning service company

The Federal Cybersecurity Investment Group

Board advisory role for start-up cybersecurity company

Service Government Contractor (Confidential)

Assessment and implementation of improvements and structuring a company for sale

Equipment Government Contractor (Confidential)

Valuation and assessment of company and structuring for sale purposes

Atrium

Creditors advisor for unsecured creditors of $530M housing parts manufacturer.

LandAmerica

Creditors advisory for SunTrust on LandAmerica with $2.7B of revenue.

Kodak

Debtors restructuring advice for $6.5B company.

Portfolio of PE Firm (Confidential)

Business diagnostic review and projections for multi-site Medicaid dentistry $100M company in default of debt covenants

Disclaimer Note: Certain transactions listed above were effective by principals of Farrell Advisory prior to the date they joined the firm