In the spring of 2018, Rebecca Holderread connected Jim Weber, Managing Partner of ITB Partners, to the CEO for a 30-year-old Atlanta area-based not-for-profit. Rebecca is a member of ITB Partners and a fractional CFO. As she had taken a full-time CFO assignment with one of her clients, she was not able to pursue this engagement herself.
When Jim was introduced to the CEO the extent of his understanding was that this not-for-profit needed a new CFO. After a few email exchanges, Jim and the prospective client scheduled a face-to-face meeting, late in the day at the prospect’s offices. The point was to conduct the meeting without alerting the incumbent Director of Finance. Jim said that the meeting consisted of the CEO and two of her board members. The first part of their meeting was an opportunity for Jim to understand the prospective client’s situation.
The prospect is a non-profit organization [501(c)(3)] established in 1988 by the CEO. This company became Georgia’s first licensed therapeutic foster care agency. In addition to placement and care for foster children, the client provides host home care for adults with developmental and physical disabilities, provides behavioral and life skills coaching for foster youth and adults and through a dedicated program, provides support, guidance, and assistance needed by teen mothers & fathers to succeed as adults and parents.
The CEO told Jim that the current Director of Finance refused to provide financial information in a format that enabled the leadership to effectively manage their business. She went on to say that he had failed to provide analysis to facilitate thoughtful decisions. Additionally, whereas the CEO wanted to install a budgeting process, the incumbent had no interest in accommodating her directive. Furthermore, this gentleman had become belligerent and insubordinate toward leadership. The situation had become intolerable, so a change had to be made
Not surprisingly, there were budgeting constraints on the compensation available for a replacement. Based on his understanding of the situation, Jim pitched them on engaging a fractional CFO. He explained the concept to the prospect, ensuring them that they could achieve their objectives without significantly impacting the P&L. The CEO liked that idea and agreed to interview several highly capable fractional CFOs affiliated with ITB Partners. I was the first on the list and met with the CEO. We connected so well that leadership decided not to talk to anyone else. I was hired for the engagement and their Director of Finance was terminated.
CFO Services Engagement:
When I started the engagement, I understood that the client was looking for better team collaboration and alignment with the fractional CFO. The CEO and the new Board of Directors (BOD) expected me to lead the financial position, to provide more timely and insightful financial statements and analytics, budgeting/forecasting, cash flow management, and strategic planning. What I soon learned that the timing of taking on this assignment and the termination of the Director of Finance was problematic. It was tax and reporting season, so I had to scramble.
Focus Areas and Results to Date:
- Fully conformed financial statements to GAAP
- Transitioned accounting package from desktop to the online version to improve efficiency and data security
- Created a new monthly financial statement package meeting both internal & BOD requirements
- Refined and extended forward view of cash forecasting, with a focus on liquidity management
- Provided counsel/analysis to CEO leading to a favorable outcome in renegotiating a material vendor debt
- Developed financial analysis to evaluate the profitability of various programs
- Partnered with the CEO, to develop strategies and related financial plans for key programs
- Developed annual budget for each dept and consolidated agency
- Improved internal controls
- With CEO, developed components of strategy and management template for execution of a first-ever, multi-year capital campaign
- Ongoing training of new full-time CFO
A year and a half later, I’m still working with the client. I provide ongoing support to the CFO with annual audit, regulatory reporting, cash flow forecasting, monthly financial package, and various financial analyses, as needed. I also participate in BOD meetings, as required.
Jim likes to remind us of the importance of the Fractional CFO. I believe the value-added services I provided for this client proves his point. They were able to achieve their goals to improve the management of their business without compromising their financial resources. Today, they are in a far better position to deliver on their mission.
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Jim Weber, Managing Partner
ITB PARTNERS