Providing Outsourced CFO Services (OCS) Presenter: Christian Wielage

Providing Outsourced CFO Services (OCS) Presenter: Christian Wielage

Introduction: About Version 1 of PlanGuru was developed in 1999 to help accountants build simple financial projections for their clients. 16 years later, PlanGuru is used by thousands of accountants, business advisors, businesses and non-profits on projects ranging from SBA loan projections to 100-department operating budgets. At PlanGuru we go beyond simply teaching our software: Our job extends into teaching Budgeting/Forecasting and performance review concepts. We teach/train accountants, bookkeepers and other business advisors to provide Outsourced CFO services (OCS). Partnering Organizations: We also make it our mission to connect organizations that can work well together as customers or as partners.

Agenda Understanding the Marketplace Talking to your Clients Client Presentation Introduction to PlanGuru

The US Budgeting Crisis Very few small businesses have a meaningful budgeting, forecasting and performance review process. Without relevant experience they: Struggle with the technical aspects of preparing this work More frequently they fail to see the value and do not try Very few accounting firms/ bookkeepers generate revenue from providing these services to their clients Cannot reconcile the cost of delivering these services with what the client is willing to pay. This can change! Huge untapped-reservoir of opportunity for these services

What are OCS? 1) Budget / PR / Forecast Organizations construct their budget at the beginning of the year and perform ongoing performance review. Rolling cash forecast process. Performance Review w/ Budget vs. Actual Comparison Rolling Forecast 2) Strategic Planning Defines the vision for the future, provides the budget with high level targets. Assess risks and opportunities, yielding better strategic decisions and contingency plans. Sensitivity/Scenario Analysis Break-even Business Valuation 3) External Estimate When organizations need to demonstrate their estimated financial future to: Lenders Investors Business Partners Board of Directors 4) Big Decision Analysis Many organizations make large investments, acquisitions, or bid on large contracts. These decisions need to be evaluated in an organized and effective way. Quickly build intelligent financial projections

1)The Time Tested Process for Better Decisions Build a Budget at the beginning of the year Do Monthly Performance Review Re-forecast the future on a rolling basis w/ cash-flow Benefits of Budgeting: The budget sets the direction for the business, make big decisions Budget setting discussions unlock ways to improve performance Targets (with incentives) can drive improved sales or better expense/cost control Performance Review: Measure financial results in a comprehensive way with reports, charts, scorecards Hold team accountable for results, reward good performance Compare results to budget, questions past decisions Rolling Forecast: Tactical decisions should revolve around the forecast, understand their implications Constantly understand cash position, make moves before it is too late Have more confidence and stability, less stress

The Repeating Cycle of Success Strategic Planning Process: Typically performed in the middle of the fiscal year. Sets the direction for future Dec Jan Feb Budgeting Process: In accordance with the high level parameters set in the strategic plan Performance Review: Continuously reviewing performance generally and against budgeted/ forecasted targets Nov Oct Sept Mar April May Rolling Forecast: Accurate and tactical view of where the business is headed Aug June July

Ways to offer OCS Mid-Large Engagements Situations with multiple departments, locations, subsidiaries, cost centers, etc. Multiple decision makers involved in the budget setting process. Spend weeks or months in the budget setting process Each month, taking the time to prepare the monthly review may take a full week. Culminating in 1 or more big monthly meetings. Small Business Standard Review Spend between 1 to 4 days to choose projection methods and set assumptions for the budget at the beginning of the year. Spend between 1 to8 hours on preparing the monthly review and formulating pre-meeting conclusions and questions. 1-3 hour review with client. Light Review Less than one day building the budget at the beginning of the year. Spend between 20 mins to 2 hours on preparing the monthly review and formulating pre-meeting conclusions and questions. Meetings are 30 mins to 2 hours. Maybe you simply prepare the analysis turn it over to the client, and don t hold a regular meeting. Teaching, Training & Support For your clients that have in-house employees capable of managing this process you may just want to provide implementation and training process. The PG team can help. Flexibility None of these are cut and dry. For example, a company without cash concerns may only do a rolling forecast every quarter, less maintenance.

Be your client s Outsourced Finance Department THINK SMALL: It is your smaller business clients that serve as the best marketplace for this service. The complexity of their business does not warrant a true CFO, but the core exercises that a CFO does are still needed. Smaller means easier. Huge market, millions of small businesses are not doing any budgeting and performance review. The smaller they get, the more that exist. See tremendous benefit because they are so deficient. 2.4 MM 1,000,000 800,000 600,000 400,000 200,000 0 US Firms by Rev There is opportunity in the Large Small Business area. Get a huge leg up in the client acquisition process. Pitching a low-cost Outsource CFO service will be a key differentiator when businesses are interviewing multiple CPA firms. Keep your clients, while they pay more. The accounting industry is changing rapidly, firms that do not respond will not succeed.

Presentation for Clients Help your clients understand all the benefits of hiring you to be their outsourced CFO Juxtapose the new you versus the delinquent small business masses Show them concrete examples alongside this PowerPoint

[INSERT FIRM ICON/LOGO] Budget, Forecast & Plan for More Profit [INSERT NAME OF Advisor] [INSERT NAME OF FIRM] Prepared for: [INSERT NAME OF CLIENT]

[INSERT YOUR FIRM S HEADER] Budget, Forecast & Plan for More Profit Flying blind: Simply reviewing historical financial statements is not enough! Taking the time to build budgets, do performance review and re-forecast the future drives better decisions. All important decisions should be made in the context of a budgeting/forecasting meeting weighting out the pros and cons in a systematic way with real data Successful Large Organizations make important decisions in the context of a budgeting, forecasting and planning process. Many large companies have hundreds or thousands of people directly involved in providing management with the projections. Accounting Department > Finance Department > Decisions Makers Operate like the Big Companies: We can help your team implement these time tested methods by providing our technical expertise and experience.

[INSERT YOUR FIRM S HEADER] The Time Tested Process for Better Decisions 1) Operating Budget/Forecast Organizations construct their budget at the beginning of the year and perform ongoing performance review. Rolling cash forecast process. Performance Review w/ Budget vs. Actual Comparison Rolling Forecast 2) Strategic Planning Defines the vision for the future, provides the budget with high level targets. Assess risks and opportunities, yielding better strategic decisions and contingency plans. Sensitivity/Scenario Analysis Break-even Business Valuation 3) External Estimate When organizations need to demonstrate their estimated financial future to: Lenders Investors Business Partners Board of Directors 4) Big Decision Analysis Many organizations make large investments, acquisitions, or bid on large contracts. These decisions need to be evaluated in an organized and effective way. Quickly build intelligent financial projections

[INSERT YOUR FIRM S HEADER] The Time Tested Process for Better Decisions Build a Budget at the beginning of the year Do Monthly Performance Review Re-forecast the future on a rolling basis w/ cash-flow Benefits of Budgeting: The budget sets the direction for the business, make big decisions Budget setting discussions unlock ways to improve performance Targets (with incentives) for can drive improved sales or better expense/cost control Performance Review: Measure financial results in a comprehensive way with reports, charts, scorecards Hold team accountable for results, reward good performance Compare results to budget, questions past decisions Rolling Cash Forecast: Tactical decisions should revolve around the forecast, understand their implications Constantly understand cash position, make moves before it is too late Have more confidence and stability, less stress

[INSERT YOUR FIRM S HEADER] The Repeating Cycle of Success Strategic Planning Process: Typically performed in the middle of the fiscal year. Sets the direction for future Dec Jan Feb Budgeting Process: In accordance with the high level parameters set in the strategic plan Performance Review: Continuously reviewing performance generally and against budgeted/ forecasted targets Nov Oct Sept Mar April May Rolling Forecast: Accurate and tactical view of where the business is headed Aug June July

[INSERT YOUR FIRM S HEADER] Budget, Forecast & Plan for More Profit We will be your Outsourced Finance Department At ABC Accounting we are experts in building budgets and plans, let us do the heavy lifting for you. This will enable you to exclusively focus your time on the value adding discussions and thoughts, not complicated model-building. Because we are so much more proficient than the other firms, we can deliver this service at a price-point that our competition simply cannot achieve. We will facilitate and optimize the performance review process to focus on what is most important. Drive the necessary discussions, ask the important questions. Simply show up to the meeting and we will have the analysis ready for discussion. Our experience with a diverse group of clients gives us a unique and insightful perspective that an exclusively in-house team would not have. Share best practices in respect to optimizing your budget and financial review process. Develop actionable conclusions like specific cost/expense saving recommendations.

[INSERT YOUR FIRM S HEADER] On-Going Analysis Good cop, bad cop We will act as your bad cop and ensure continuous budgeting accountability among your employees. Be ready on a dime We will be able to walk into a meeting and be ready to have a discussion on the present and future of your budgeting plans at any time. A common language When you budget and use ratio analysis and business drivers, decisions can be made using a common language backed up by real numbers and analytics.

[INSERT YOUR FIRM S HEADER] Not About Getting it Right A common objection: we cannot predict the future The correct response: that doesn t matter Budgeting is about creating a direction to work towards. In the forecasting process we set a baseline. As we see that certain assumptions will not pan out, we can calculate the variance and apply that to the baseline. With this we will always have a good idea of where we stand. Managing to a Targeted Profit People make different decisions in order to hit their targets. The little things add up. Example: There is a trade event coming, they can spend $2,000 at the printer they always use or they shop it around and save $800.

[INSERT YOUR FIRM S HEADER] Strategic Planning A Long-Term Strategic Plan Serves 3 Vital Roles 1.) It sets the direction for the future that the operating budget is aligned to achieve. 2.) It is a framework for a what-if exercise. In an age when technology can change an industry overnight, a business must identify their largest long-term risks/opportunities and understand their estimated impact. With this info, make tactical adjustments, long-term shifts and contingency plans. Sensitivity analysis, scenario analysis, ratios, breakeven or business valuation 3.) It serves as a personal financial review for the business owners; they can look at their business in the same way they look at their stocks and bonds (when can they retire, should they sell?). Personal Cash Flow Analysis or business valuation

[INSERT YOUR FIRM S HEADER] It is the process, not the end-product, that adds value. The Magic Report: Everyone is looking for a tool that will instantly produce information that will yield better decisions, unfortunately that is a fantasy. Regular Budget/Performance Review: There is only one place to start for any business that is serious about making better decisions: - Starting the year with a line-by-line budget setting process - Monthly Performance Reviews w/ Budget vs Actual comparisons - Monthly Rolling Forecasts Cultivating a Better Decision Making Process: Yes, of course, this will take some time, but as time goes on your business will start making better decisions.

[INSERT YOUR FIRM S HEADER] It is the process, not the end-product, that adds value. Line-by-line budget setting exercise Systemically discuss all parts of the business to identify room for improvement, this will spark conversations and ideas that would never be discussed otherwise. An IT revolution has opened up huge cost savings possibilities. We work with a number of different companies and see a wide variety of cost/expense reducing solutions. Make targeted adjustments to businesses to reach the goals set in the budget. Challenging decision makers to go on the record stimulates a deeper understanding of the business. A series of tangible goals/targets give employees something to shoot for. Push the team to go above and beyond with financial incentives that make sense for the business.

[INSERT YOUR FIRM S HEADER] It is the process, not the end-product, that adds value. Monthly Performance Reviews w/ Budget vs. Actual comparisons Comparing what happened to what we thought was going to happen can enable your team to reshape their understanding of the mechanics of the business. When key decision makers are forced to go on the record, they have a greater sense of personal responsibility to figure out how to make their number or figure out what is truly wrong so that improvements can be made. Team becomes Proactive not Reactive Making more targeted adjustments to the business to reach the goals set in the budget and consider strategic changes when necessary.

[INSERT YOUR FIRM S HEADER] It is the process, not the end-product, that adds value. Monthly Rolling Forecast Actual results replace the budget for past months and the remaining periods are re-forecasted. Information cultivated in the performance review will help set targets. What assumptions were right? What assumptions were wrong? Revise Forecasting Methods to become better over time. Provide management team with an accurate rolling cash forecast. Enable you to be ready for any expected cash shortfalls. What is REALLY going to happen? Centerpiece of the tactical decision making process

Providing Outsourced CFO Services (OCS) Contact Info: Christian Wielage christian@planguru.com 888-822-6300 Ext 709 Daniel Wiese dwiese@planguru.com 888-822-6300 Ext 715 Sales sales@planguru.com 888-822-6300 Option 1