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/
When is a Proof of Funds Not a Proof of Funds?
Many companies are looking for funding and there are many valid private equity funding sources available today. In my role as CFO I have many clients that are looking for funding and part of my role in this is endeavor is to find valid sources. Sometimes this is easier said than done. The private equity market is barely regulated and there are many people pretending to be private equity sources that don’t actually have any funds, or have very little and are perpetrating fraud upon the unsuspecting company wishing to find funding.
One way that private equity sources, and in some cases borrowers, will make themselves look like credible sources of funds or credit worthy borrowers of funds is to provide a fake proof of funds. If you do a Google search for Proof of Funds a list of links will come up for many companies that are willing to provide a leased proof of funds letter. Here’s the wrinkle: the money that backs up these proofs of funds is held in an account and is real money, and is available for use on proofs of funds, for a fee. The funds are owned by someone else and they are leased for a period of time for use in a proof of funds letter. The fee runs as a percentage of the principal amount of the proof of funds letter provided and length of time required for the valid proof of funds. The funds are never delivered to the person showing the proof of funds and cannot be withdrawn, but the proof of funds verifies that there are funds available.
How much does something like this cost? Well it does depend on amount of the proof of funds and the length of time. A $2 million proof of funds with a 30 day term could cost $25,000 to $30,000 and the proof of funds amounts could range up to or above $5 Billion. These amounts will cost several million per month to lease.
Be very careful when you deal with anyone that is going to provide you a proof of funds and always make sure the proof of funds provided is from a name financial institution. Always contact the financial institution to verify that the funds are actually available for withdrawal and are not just held in an account in the name of the provider for a set period of time.
To me leased proofs of funds are a form of fraud, but I don’t make the laws.
ERP: Are you buying or being sold?
In my experience as a part-time CFO one of the areas where companies utilize my experience is in the selection and implementation of the proper business management system. Another name used for business management system is enterprise resource planning or ERP system.
The process of selecting the correct ERP system by companies is a process that has always intrigued me. The whole process is upside down. Most companies approach the selection process by first contacting several of the name players in the market and expect that approach to provide them with the correct business management system.
By taking this approach they are allowing the ERP vendor with the most personable salesperson to “sell” them the ERP system that will run their business for the next five to ten years. The salesperson really doesn’t know their business or the elements that make their business different from the business next door. They do know they have a warm lead that isn’t doing their homework and could be an easy close. This approach is 100% incorrect and will most likely result in a painful, over budget or failed implementation!
Businesses need to “b
uy” an ERP system. In the buy approach the business takes the time to put together a team from the different disciplines in the business. The team is first tasked with documenting the processes currently in use by the business and identifying processes that are unique to the business and provide it with a competitive edge. The team would then be tasked with finding a solution that will accommodate their unique processes along with the normal business processes. The team would search available resources to find solutions that will fit their needs and provide those ERP vendors that appear to fit with a requirements document that includes the processes that were previously defined. The ERP vendors would be expected to provide a response to the requirements document and those that fair the best would be brought in to perform a day in the life demo, showing the unique required processes to all participants. The demos are graded by the participants and a final selection of two or three would be brought in for a formal quotation and final demo to cover areas not covered completely during the initial demo. From this a system is either selected or the selection process drops back to the point of system selection to look at another group.
Buying an ERP system will take significantly more resources then allowing an ERP vendor to sell you a system, but the results will usually be significantly better and the resulting system will most likely serve the business well for the long run.
The lost art of financial analysis
Early in my career I was a Financial Analyst for a Fortune 500 company. This was before PC’s came into use. One of the major tasks of my monthly routine was to put together the monthly financial package. This package included historical performance charts and graphs on many aspects of the operating unit. I would spend hours making and updating the graphs using tape for the lines on the graphs. I would also spend hours combing over the numbers for the previous month in preparation for the monthly review meeting for presentation to Division management.
After the advent of PC’s I would spend hours each month at another company to prepare the monthly presentation to management to analyze and report the results of the company for the Board of Directors. I had a plotter and would print out an inch thick set of overheads for the presentation. The formats were predetermined and the historical information was tracked over many months or years for products, expenses, assets and liabilities. We knew the business and were able to identify changes in the results and the reasons for each of the changes. After the Board of Directors review they also had a good feeling that their managers understood the business.
At the time we just looked at this as financial analysis. Now the fancy name for this same process is Key Performance Indicators (KPIs).
As I progressed through my career to the position of CFO the experience I gained during the early years stayed with me and at each organization I installed a set of key performance indicators and made sure that the systems in use at the organization were tuned to provide the necessary information to easily obtain this information. I also made sure that there were others in the organization that could put the information together in a reasonable amount of time. Management was always confident that the measurements were accurate and provided an overview of the operations and financial results.
Over time many companies have decided that the need for monthly reviews and analysis is too costly or the company grew from a point where they never did any analysis and survived so don’t understand the need for analysis in today’s world. Most ERP systems today make the collection of information and preparation of analysis related data far easier than in the past, but most companies either don’t have the resources, the understanding of their KPIs or the budget to have someone put these in place.
Very few companies have a Financial Analyst on staff, as they are viewed as a luxury. I would say that not spending the money on a financial analyst could cost a company in lost profits and lack of understanding of their business.
One of the important aspects of having a part time CFO is to properly understand your business through the development of relevant KPI’s and training the internal staff in the collection of the information. This allows a company the opportunity to understand their business while avoiding the cost of a financial analyst.
The Lost Art of Cost Accounting
In my 
career, starting as a staff accountant and progressing through Cost Accounting Manager to Controller and then CFO, one aspect of accounting has been very important in my understanding of business activities and profitability. That area of accounting is Cost Accounting. Cost Accounting is more art than science. It takes an understanding of all aspects of a business and how they relate to product cost and profitability.
In college they offered one class in cost accounting and confused everyone with the explanations of variances and overhead. There is a definite experience level that should be a prerequisite to the cost accounting courses, but that experience is hard to obtain in advance. To most college students cost accounting is just theory and formulas. It’s very difficult to relate it to real world activities.
When I was coming up through the ranks of corporate accounting it was the norm that companies had a cost accountant, or cost accounting department. It was necessary to understand the real bottom line of the business. Now I go into companies and finding a single cost accountant or even someone with an understanding of cost accounting is rare. The phenomenon is more related to budgetary constraints than to business need. Just like every business needs a CFO, every business needs someone with an understanding of cost accounting in order to gauge their pricing and other business decision accuracy. In many cases these requirements can be filled by one person.
Should you trust your employees
Should you trust your employees. The simple answer is yes. The more complex answer is with limits.
Recently an article appeared in the Orange County Register with the headline “Former O.C. woman suspected of defrauding local business of nearly $400,000″. (We’ll ignore the fact that the woman in question was the sister of Motorcycle builder Jesse James.) The unfortunate aspect of this article is that it represents trust gone too far.
In order to have a healthy workplace there needs to be a certain level of trust, but that trust cannot supplant good business practices. In this case good business practice would be to have reduced signature authority over the Companies assets. The owners of this business learned this lesson the hard way and ended up closing their business. Had they had proper separation of authorities (e.g.: the person that prints the checks cannot sign those same checks) they may still be in business and there employee would not have had the opportunity to allegedly steal funds from the company.
As a part time CFO one of the areas that I review is the separation of authorities and will advise on changes that would benefit the organization, but not eliminate the feeling of trust necessary for a healthy organization.
What cloud do you want for your ERP?
There has been a great deal of talk lately about “The Cloud”, but what is the cloud. In loose terms the cloud is any system that is accessed from an offsite location (the user has no hardware requirement.) Using this definition a hosted solution, where you own the software would be cloud based. A system where you don’t own the software and are paying a monthly fee for access would also be considered cloud based, this is typically referred to as SAAS. Which one is better?
It really depends on the software that works best for your company. You should not select a software product because it is cloud based just because it’s cloud based. In order to best serve your business the delivery method of the software should not matter. What matters is whether or not the software provides the features and functionality that will make your business run better.
Looking at the relative costs of SAAS vs. hosted the numbers may surprise you. In a typical hosted environment you pay:
- a fee for user connectivity. This can be a monthly fee based on the number of users you have accessing the system or it can be based on the throughput you generate during a period. The less risky approach is the per user fee. This doesn’t vary from month to month and becomes a fixed fee.
- On top of this you would have the purchase cost of the software. If you take the purchase cost and spread it over three years through a lease you would then have a fixed cost of the hosted solution based on the monthly lease payment. At the end of three years your cost would be reduced as the lease cost goes away.
- Annual maintenance and support would usually be somewhere in the 17% to 20% of the software purchase cost and would be amortized monthly during the life of the software.
There are variations of hosting, but using this type of calculation will give you a good idea of what to expect.
Looking at the SAAS model you would have the monthly fee associated with the modules and users accessing the system. Some are doing it based on named users, where you would pay a fee for reserving the name on the SAAS system, whether the user accessed the system during the period or not. There are no maintenance and support fees or monthly hosting or lease payments. Sounds simple.
When you do the analysis remember that an ERP purchase should be a ten year decision for your company. It’s not something to enter into without a great deal of analysis and research. There are over 1000 ERP systems available in the US market and there is no perfect fit. Some things to consider as you do the cost analysis of hosted vs. SAAS are:
- What is the 10 year cost of each system? Don’t just look at the first three years.
- Remember that no matter what system you select you will have to pay implementation consulting costs. The SAAS and hosting models only provide the framework for the software. They do not provide a panacea eliminating the implementation effort. Just because it’s SAAS or hosted doesn’t mean it implements itself.
- Make sure you select the software because it’s the correct software for you business, not because of the brand or because you like the salesperson. (Once you make the purchase it’s likely that you will never speak to the salesperson again.)
- Get a contract that spells out all of your costs. You may just want to buy a certain module today and then plan on implementing other modules over time. Make sure you know the total cost of implementing the software package, including all modules you plan to implement.
JEOne for SAP Business One
One of the most useful add-ons I’ve seen in a while for SAP Business One is JEOne. It’s a simple utility that is used to import Journal Entries directly into SAP Business One directly from Excel. Makes the month-end process a breeze and eliminates double entering all the information. Check it out at Octave Solutions.
ECommerce solutions for SAP Business One
In my seven years of working as an implementation consultant to SAP Business One I’ve worked with two solutions for ECommerce. They are Magento for SAP Business One and zed ECommerce. They both have their good features and are both adequate in their approach to providing a good solution for an integrated solution for SAP ECommerce. The Magento solution is, of course, based on the Open Source webstore from Magento, while the zed ECommerce product is a complete self-contained ECommerce solution. They are comparably priced. If you have a need for an apparel matrix you probably want to stick with the zed ECommerce solution and if you need an intricate webstore with lots of additional information and data you would probably be better off with Magento for SAP Business One.
There are other ECommerce solutions available for SAP Business One, but these are the ones where I’ve had direct experience.
If you would like to receive additional information or would like to discuss the available alternatives, please leave me a comment and I’ll get in touch with you.
Outsourced Manufacturing with SAP Business One
SAP Business One does a good job with outsourced manufacturing. There is an enhancement to SAP Business One that can make the processing of outsourced manufacturing much easier. The add-on is called Octave Outsource from Octave Solutions. The features of the add-on are:
- Automatically creates a production order upon creation of a purchase order line to purchase the outsourced labor.
- Automatically receives against the production order at the time a receipt is processed against the purchase order.
- Backflushes the components needed to produce the manufactured item.
- Closes the production order when the purchase order has been fully received.
An on-line demo of Octave Outsourced can be viewed here, or you can contact Octave Solutions via email.
Exchange Rate Add-on for SAP Business One
One of the nice things about SAP Business One is the ability to process transactions using multiple currencies. One of the drawbacks is that someone has to enter the correct currency conversion rate each day before any transactions can be completed. Octave Solutions has come up with a solution to this problem. They call it XRates for SAP Business One and it’s really easy to use. You just install the Windows service on your server and it does the rest. Each day, at a predefined time, XRates goes out to the Octave Solutions website and automatically downloads the correct exchange rate effective for that day.
XRates is economically priced and has a small monthly fee. For more information on XRates go to the Octave Solutions website or contact them vial email
The Wall Street Journal featured B2B CFO® as experts in cash flow management. 
