Charles F. Sonneborn, B2B CFO®

Mar 11
3

Why did I become a B2B CFO® in the Phoenix market place?

After recently completing a chapter in my career with a community bank, I found it interesting how many of the Bank’s customers knew their businesses (products and services) well, yet did not understand how cash flow worked in severe economic conditions and the necessary steps they needed to take to create a break even cash flow, and then how to exploit opportunities to grow and strengthen it their cash position.

Most of these Customers understood and focused on cutting the “fat” at first, those un-necessary discretionary expenses and did the first step well. Many Customers then found themselves in a position where they had to reduce a significant amount of their workforce, and reduce all overhead expenses as much as possible. They and their staffs had taken on more work themselves, and cut their salaries and remaining employees’ salaries and benefits in order to potentially survive. In essence, go into the “bunker” and wait for things to pass over.

I understand the shock of a severe economic downturn to be paralyzing too many business owners as well, as they do not know what to do once they have made the necessary reductions. Having been through two negative economic cycles in my career and having turned around two companies, the observation I have made is successful companies who survive and flourish after expense control to preserve cash, are those who assertively expand revenue in the sectors that make sense (have good gross profit margins and market penetration) or to exploit new product/service opportunities.

I felt through my experience, background and the understanding of how a company can improve, coupled with many years of strategic planning experience, that I would create a value added role to most any business who was trying to expand their businesses, giving them experience, oversight, guidance, and reporting as a CFO on a part time basis as this is necessary to track performance and cash flow.

Given that the Phoenix metro area is filled with small to mid-tier companies, and that I could positively impact many of those companies, I believe there to be many opportunities to help and assist those companies with their individual needs.

Posted in Uncategorized by Charles Sonneborn. No Comments

Feb 11
18

How to get cash out of your business

How to Get Cash WITHOUT Going to the Bank a/k/a Managing Accounts Receivable by Charlie Sonneborn

Every business needs cash in order to be successful. When times are good, cash (along with many other important metrics) can be forgotten and overlooked. When times are bad, the individual entrepreneur, small business as well as Fortune 100 Companies (yes, even the auto industry) are in critical need of it. The first thought of small and emerging businesses is to rush to their bank and utilize existing lines of credit or request increases. Unfortunately, this is usually the worst time to approach your banker. Many business owners overlook a valuable asset that can generate some very positive cash flow when managed properly. That asset is their ACCOUNTS RECEIVABLE! The management of Accounts Receivable is often neglected until the business is in desperate times. A good A/R program must be instituted when the business first begins to generate Receivables. The components that need to be developed and maintained are:

1. Establish written credit policies and procedures that not only establish your expected days for collection, but detail what actions need to be taken when a customer falls outside these parameters (i.e. Customer goes over credit limit, Customer exceeds payment terms, Customer bounces a check, significant change in Customer’s credit report, etc.).

2. Identify someone in the organization (i.e. Credit Manager) who will be responsible and have accountability for making credit and collection decisions and take subsequent actions for proper and timely notifications to delinquent customers. This person should NOT be someone in the company who also has Sales responsibilities. This would be a conflict of interest.

3. Be sure there is adequate computer software to accurately track the Receivables and print meaningful Aging reports. These reports must be run regularly (typically monthly or even weekly depending on the business cycle). The Credit Manager should note, on the reports, all actions taken for past due accounts. It is also advisable for the Owner or applicable Executive to have regular meetings with the Credit Manager and review the status of open accounts.

4. Have all customers, prior to being sold/serviced, complete a Credit Application that will be reviewed and approved by the person who has accountability for Receivables. This document could become invaluable if legal proceedings need to be taken and provides accuracy in initially establishing the customer’s name, address, etc. The document should also require a personal guarantee from the Customer’s owner. This form should be reviewed by an attorney prior to putting it in use. If your attorney advises it is ok to ask for the owner’s mother’s name, address and phone number as it can be very helpful in your collection activities if needed.

5. Subscribe to a credit reporting service (such as Dunn & Bradstreet) so you can obtain pertinent information about your customers prior to shipping/servicing. A copy of the report should be filed along with the Credit Application. Periodic updates to these reports should also be run and reviewed by the Credit Manager. The frequency of these reviews should be included in the Policy/Procedure Manual described above.
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6. All accounting personnel responsible for billing must understand that every invoice needs to be generated and mailed in a timely fashion with the invoice date being the date product was sold or services delivered. It is also a good idea for the expected due date to be printed on the invoice so there are no misunderstandings by the Customer. A delay in the billing function gives the Customer an excuse to pay late. It will also produce an inaccurate Aging report, thereby providing erroneous information to the Credit Mgr and in many cases, the bank.

7. Print and mail a Statement to each Customer periodically. This will allow the Customer to see how much is owed and how many days outstanding the account is. It will also help to protect the integrity of your Receivables in that the Customer will contact you if they feel the balances are incorrect. This is an important function in developing internal controls for your business.

8. Develop a relationship with a reputable collection agency in your area. Don’t be afraid to use their services once your internal collection methods have been exhausted. The longer you wait to act, the more difficult it becomes to collect. They will typically charge 15% – 30% of their collections, so be sure you have done everything you can before seeking their assistance.

9. Carefully monitor Customers who consistently take unauthorized deductions. This is an indicator that you have a problem with this account or your billing is not being done correctly. Either way, a red flag needs to be waved.

The collection of your Accounts Receivable should never be ignored or lessened on your priority list. Your customers will eventually respect your tenacity in collecting and will respect you for it. Many times, Customers will delay payments to other Vendors or Suppliers, if they are low on cash, to avert receiving a collection call from you. A well-run Company knows the importance of their Accounts Receivable in good times and bad. As a B2B CFO® partner, I understand the importance of developing sound policies and procedures for Accounts Receivable, and recognize the problems that can occur when they’re not being watched. In many companies, the Accounts Receivable is the single most significant asset, and attention to detail may mean the difference between the success and failure of any business. If you believe that your Company would benefit from further discussions regarding your Accounts Receivable policies and procedures, please contact me to set up a meeting.

Posted in Cash Flow by Charles Sonneborn. No Comments

Sep 10
3

B2B CFO®, NAMED IN PRESTIGIOUS INC. 5000 LIST

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

184% Growth Earns B2B CFO Spot in the 2010 List of Fastest
Growing Companies in America

Phoenix, Ariz. August 24, 2010 – B2B CFO, nation’s largest
provider of CFO services to small businesses, has been named to the
prestigious Inc. 5000 list of fastest growing companies in America.

Now in its 29th year, Inc. Magazine’s annual ranking judges US-based
and privately held companies by their revenue growth. This year’s
list was ranked on the percentage in revenue increase from
2006-2009. B2B CFO’s growth earned 84th place in its industry.

“There are approximately 27 million small businesses in the U.S.
today,” said Jerry L. Mills, founder and chief executive officer of
B2B CFO, “It is a huge honor to be among the fastest growing and the
most successful businesses in the country. Our firm has experienced
tremendous growth over the past few years and we are on track to
continue expanding. I am especially grateful to all of the firm’s
dedicated Partners who continue to advocate our services around the
nation.”

In a personalized letter congratulating B2B CFO on this
accomplishment, Jane Berenston, editor-in-chief of Inc. Magazine’s
wrote “Congratulations: your company, B2B CFO, has made the 2010
list of the fastest growing private companies in America. This
achievement puts you in rarefied company, especially if you consider
that over 27 million businesses are registered in the USA. The elite
group you’ve now joined has, over the years, included companies such
as Microsoft, Timberland, Visa, Intuit, Jamba Juice, Oracle, and
Zappos.com. I look forward to congratulating you in person in
Washington, D.C.”

B2B CFO’s growth is reflected in numerous awards this year. The
company was also recently named in ACE Corporate Growth Awards,
which recognized the most successful and fastest growing companies
in Arizona.
In August 2010, B2B CFO has grown to 170 Partners across 39 states,
representing 5,000 years of cumulative experience. Each Partner is a
seasoned financial executive who serves as CFO to growing businesses
on as-needed basis. Approximately 80% of the Partners have a
background that includes senior executive positions at the Big Four,
and all of the Partners have held high level executive finance
positions in various industries in corporate America. Together, B2B
CFO Partners work with more than 500 businesses in the nation with
combined annual sales of more than $3 Billion.

Jerry L. Mills and many of the B2B CFO Partners regularly dedicate
time to educate business owners on financial matters. Mills is a
frequent speaker and contributor and has been featured on many
national media networks including FOX Business, Fortune Small
Business, Smart Money and many others. Mills is also the author of
The Danger Zone – Lost in the Growth Transition, and Avoiding The
Danger Zone – Business Illusions, both business non-fiction books
that help entrepreneurs understand and build a strong financial
strategy.

“We look forward to participating in the Inc. 500|5000 conference in
Washington, DC this fall,” added Mills. “Along with my colleagues, I
look forward to the October 2nd awards ceremony and to meeting the
entrepreneurs that created the other 5000 fastest growing companies
in America.”

About Inc. Magazine

Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc.
is the only major business magazine dedicated exclusively to owners
and managers of growing private companies that delivers real
solutions for todays innovative company builders. Inc. provides
hands-on tools and market-tested strategies for managing people,
finances, sales, marketing, and technology.

Inc. Magazine’s 29th annual Inc. 5000 ranking of the fastest-growing
private companies in the country is available online at
www.inc.com/inc5000/list

About B2B CFO

Headquartered in Phoenix, Ariz., the firm was founded in 1987 by
Jerry L. Mills. B2B CFO is the nation’s largest CFO firm serving
entrepreneurial, growth and mid-market companies with revenue under
$75 million. The firm’s partners have an average of 25 years of
experience and each individual partner is a senior level executive
with a broad range of expertise. Please visit online at
http://www.b2bcfo.com/