LIFO vs. FIFO: Choosing the Right Inventory Valuation Method

LIFO vs. FIFO: Choosing the Right Inventory Valuation MethodArthur F. Rothberg, Managing Director, CFO Edge, LLC

Choosing the right inventory method – LIFO vs. FIFO – is a critical inventory management decision for manufacturers, wholesalers and retailers.

The significance of choosing Last-In, First-Out (LIFO) accounting or First-In, First-Out (FIFO) accounting is found in how each inventory valuation method impacts inventory value, cost of goods sold, net income and income taxes.

Reviewed in the full PDF…

LIFO vs. FIFO: Choosing the Right Inventory Valuation Method

…are definitions of LIFO and FIFO accounting and dollar-based examples of how they impact cost of goods sold and taxes differently.

A company’s choice of one over the other can also be informed by economic conditions, inventory pricing, accompanying reporting requirements, and the impact of lower net income on borrowing or investor interest.

Bringing both client-side and services-side expertise in weighing the pros and cons of LIFO and FIFO, a CFO services partner collaborates with executives and their teams to discover, select and implement the right inventory valuation method.

Posted in Accounting Systems Design, CFO Services, Inventory Management, Los Angeles | Tagged , , , , , , , , , , , | Leave a comment

What to Know When You’re Transitioning Accounting Duties

What to Know When You’re Transitioning Accounting DutiesThis article is by Mark S. Becker, Partner, CFO Edge, LLC.

Transitioning accounting duties comes into play in scenarios like an acquisition, a merger or outsourcing accounting to a third-party services provider.

Challenges in transitioning accounting duties occur if procedures and policies are not up to date or if both entities do not use the same general ledger system.

Discussed in the full PDF…

What to Know When You’re Transitioning Accounting Duties

…are transitioning downsides that can include delayed timing of a transaction’s close or reduced faith in financial data.

Greater Los Angeles executives who are looking at transitioning accounting duties can benefit from talking with a provider of CFO services who can assist in reaching four desired goals.

Leveraging expertise earned as a former enterprise chief financial officer, a CFO services partner sees transitioning holistically and develops a transition plan that delivers prioritized and properly sequenced transfer tasks that are assigned to the right resources.

Posted in Accounting Systems Design, Acquisition Accounting, CFO Services, Financial Reporting, Los Angeles, Merger & Acquisition Planning | Tagged , , , , , , , , | Leave a comment

The Benefits of Forming a Captive Insurance Company

The Benefits of Forming a Captive Insurance CompanyThis week’s article is by John W. Braine, Partner, CFO Edge, LLC.

Challenges presented by current business insurance offerings can include coverage gaps, exclusions and uncontrolled premium changes.

Companies who form, own and control their captive insurance company establish a licensed insurance company for themselves.

Types of insurance a company’s captive insurance company may provide include health, umbrella and liability insurance.

Reviewed in this week’s PDF…

The Benefits of Forming a Captive Insurance Company

…are descriptions of what a captive insurance company is, business challenges that drive creation, and the benefits of forming a captive insurance company – including tax advantages, lower premiums, and enhanced risk management.

Greater Los Angeles and Southern California executives who are interested in learning more about a captive insurance company can benefit from talking with a provider of outsourced CFO services.

A former enterprise CFO brings both client-side and services-side expertise determining if a company meets required criteria, as well working with you to weigh the advantages and drawbacks of setting up your own captive insurance company.

Posted in Business Insurance Coverage, CFO Services, Corporate Governance, Los Angeles, Risk Management | Tagged , , , , , , , , , | Leave a comment

Does Your Business Have a Buy-Sell Agreement?

Does Your Business Have a Buy-Sell Agreement?This week’s article is by Arthur F. Rothberg, Managing Director, CFO Edge, LLC.

Small and mid-sized business owners without buy-sell agreements increase risks of negative outcomes for their families, partners and employees should they unexpectedly pass away or become disabled.

Negative ramifications include control struggles, unfavorable terms of a sale for your family members and business disruptions impacting revenue and profits.

Reviewed in the full PDF…

Does Your Business Have a Buy-Sell Agreement?

… is how buy-sell agreements are frequently funded by insurance policies and structured to increase surety for an owner’s family, partners and employees.

Greater Los Angeles and Southern California business owners looking at creating or modifying a buy-sell agreement can benefit from talking with a provider of outsourced CFO services.

An on-demand CFO brings expertise on both the client side and the services side helping business leaders structure buy-sell agreements that proactively address the concerns of all parties, as well as reduce potential negative outcomes for them when a buy-sell agreement is not in place.

Posted in Business Valuation, Buy-Sell Agreements, Buying a Business, CFO Services, Contract Negotiation, Exit Planning, Los Angeles, Selling a Business, Succession Planning | Tagged , , , , , , , , , | Leave a comment

The Benefits of Bank Treasury Management Tools

The Benefits of Bank Treasury Management ToolsThis week’s article is by Arthur F. Rothberg, Managing Director, CFO Edge, LLC.

The many benefits of bank treasury management tools are just as compelling as the benefits of accounting and other software programs that small and mid-sized businesses use.

These tools improve cash flow, increase efficiencies and reduce fraud risks, yet bank treasury management tools are often underutilized by small and mid-sized businesses due to the perception that they are available only for banks’ large corporate customers.

Reviewed in this week’s full PDF version…

The Benefits of Bank Treasury Management Tools

…are six effective bank treasury management tools: ACH payments, receivables and payables lockbox services, remote deposit capture, B2B merchant services, positive pay and P-cards.

Greater Los Angeles and Southern California executives who are interested in accelerating cash flow can benefit from talking with a provider of outsourced CFO services.

A former enterprise CFO has deep expertise in analyzing current receivables and payables processes and implementing bank treasury management tools to lower costs, save time, reduce errors and increase external and internal security related to cash flow cycles.

Posted in AR & AP Management, Bank Treasury Management, Cash Flow, CFO Services, Fraud Prevention, Los Angeles, Purchase Cards or P-Cards, Risk Management | Tagged , , , , , , , , , , , , | Leave a comment

BAT & Tax Reform: How You Can Prepare

BAT & Tax Reform: How You Can PrepareThis week’s article is by Mark S. Becker, Partner, CFO Edge, LLC.

Among tax reform ideas floated by the new administration and Republicans in Congress is a border adjustment tax – or BAT – that would incent American companies to manufacture fewer goods overseas and more goods here.

Elements of a BAT include removal of tax deductions for imported goods and making tax-free exports and other sales overseas, moves designed to increase and retain manufacturing jobs in the U.S.

Reviewed in this week’s full PDF…

BAT & Tax Reform: How You Can Prepare

…is while a BAT isn’t at hand, importers and exporters should address “what if’s” related to possible changes in cost, supply chain and tax areas.

Greater Los Angeles and Southern California executives leading firms that derive revenue from imports and exports can benefit from talking with a provider of outsourced CFO services.

A former enterprise CFO brings deep expertise in corporate tax strategy, supply chains and achieving the correct balance between short-term and long-term interests.

A primary goal of working with on-demand CFO is to maximize current tax opportunities while preparing for potential tax changes in ways that will reduce risks and continue to realize advantages.

Posted in Border Adjustment Tax - BAT, Cost Analysis, Financial Regulations, Los Angeles, Outsourced CFO Services, Risk Management, Tax Code, Tax Compliance, Tax Strategy | Tagged , , , , , , , , , | Leave a comment

Building Resilience: The Role of the Finance Department

Building Resilience: The Role of the Finance DepartmentThis week’s article is by John W. Braine, Partner, CFO Edge, LLC.

With cybercrime and other major business disruptions increasing in frequency and scope, an essential strategy is to make building resilience the role of the finance department.

With its view across an organization and expertise in risk management and analytics, the finance department should lead the way in developing “what if” scenarios to assess risk and in preparing action plans to address business disruptions.

Reviewed in this week’s full PDF…

Building Resilience: The Role of the Finance Department

…are five risks of not planning for disruptions, five steps finance teams should take and six benefits of being prepared.

With a proactive and collaborative approach in planning for disruptions, the finance department will help minimize risks, as well as reveal potential organizational weaknesses that must be addressed.

Executives leading businesses in Greater Los Angeles and Southern California who are interested in knowing what their risk factors are – and what should be done about them – can benefit from talking with a provider of outsourced CFO services.

An on-demand CFO brings both client-side and services-side expertise in assessing and prioritizing risks, in developing proactive corrective actions to mitigate risks now, and in preparing loss-recovery plans should a disruption occur.

Posted in Accounting & Finance Departments, CFO Services, Data Security, Disaster Recovery Planning, Financial Leadership, Financial Strategy, Los Angeles, Risk Management | Tagged , , , , , , , , , , , | Leave a comment

How to Build a Strong Relationship with Your Banker

How to Build a Strong Relationship with Your BankerThis week’s article is by Arthur F. Rothberg, Managing Director, CFO Edge, LLC.

Understanding how to build a strong relationship with your banker is as critical as cultivating positive relationships with your CPA and attorney.

Indeed, the phrase, “triad of advisors,” is frequently used to refer to these three professionals and their roles as key resources for business owners.

Reviewed in this week’s PDF…

How to Build a Strong Relationship with Your Banker

Connecting now – not just when a loan is needed – recognizes your banker as a powerful go-to resource for input on challenges and goals.

Ongoing communication along with sharing important developments positions your banker as a partner who will work with you to develop solutions in areas of your business that go beyond loans.

Greater Los Angeles and Southern California executives interested in ways to enhance their banker relationships can benefit from talking with a provider of outsourced CFO services.

A professional CFO brings deep expertise in building and maintaining mutually beneficial relationships with business bankers – from identifying the right bank to preparing GAAP-compliant financials that give bankers the comprehensive and accurate financial views they need to work best with you.

Posted in Banking Relationships, Business Loans, CFO Services, Financial Communication, Financing, Financing Presentations, Generally Accepted Accounting Principles (GAAP), Los Angeles | Tagged , , , , , , , , , , , , , , , | Leave a comment

How to Structure Your Business Capital

How to Structure Your Business CapitalThis week’s article is by Arthur F. Rothberg, Managing Director, CFO Edge, LLC.

Given the different types of business capital – such as loans, equity and retained earnings – and their benefits and drawbacks, a critical factor in every company’s success is a comprehensive understanding of how to structure business capital.

Included in this week’s capital structure review…

How to Structure Your Business Capital

…are looks at six types of debt, investor equity and organic growth driven by retained earnings, as well as examples of pros and cons of each capital type.

The right capital structure is grounded in carefully weighing decision factors related to capital costs, ownership stakes, control and agreement terms.

Also discussed is the importance of maintaining accurate, timely and credible financial reports and statements – regardless of capital structure.

Greater Los Angeles and Southern California executives who are deliberating a capital-raising initiative or restructuring their capital can benefit from talking with a provider of outsourced CFO services.

An on-demand enterprise CFO brings both client-side and services-side expertise in determining which type of capital is most advantageous, as well as in developing financial reports, statements and presentations that provide the exact information bankers and investors need to make funding decisions.

Posted in Business Loans, Capital Structure, CFO Services, Debt Financing, Equity Financing, Financing, Financing Presentations, Investor Presentations, Los Angeles, SBA Loans | Tagged , , , , , , , , , , , , , , , | Leave a comment

How to Build & Maintain Strong Investor Relationships

How to Build & Maintain Strong Investor RelationshipsThis week’s article is by Mark S. Becker, Partner, CFO Edge, LLC.

Given the significant roles played by investors in small and mid-sized businesses, it is critical to know how to build and maintain strong investor relationships.

Reviewed in this week’s PDF…

How to Build & Maintain Strong Investor Relationships

…are proactive steps executives with investor communities can take to prevent four addressable challenges from devolving into four negative outcomes.

These negative outcomes can include multiple investor-generated requests that can distract the management team or even investors withholding funding.

Executives in Greater Los Angeles and Southern California looking at ways to improve their investor relationships can benefit from talking with a provider of outsourced CFO services.

Working in an on-demand capacity, an experienced enterprise CFO applies expertise in capital raising and its accompanying requirement to build and maintain strong investor relationships.

A professional CFO can act as a liaison with investors to make sure they receive needed, accurate and timely financial information.

A CFO partner can also provide financial guidance to the management team and leverage his or her professional network in ways that can lead to additional funding.

Posted in CFO Services, Equity Financing, Financing Presentations, Initial Public Offering (IPO), Investor Presentations, Investor Relationships, Los Angeles | Tagged , , , , , , , , , , , | Leave a comment