Litmus Test for Your Chief Financial Officer

There’s a very easy way to tell if you’ve hired the right person to trust with your company finances. All you need to do is look at the accounts and check the dates when they paid themselves their salary or bonuses. If they paid themselves before anyone else my suggestion would be to start looking for a new Financial controller. Pay extra special attention when funds are tight. That’s test 1.

Test 2 would be to wait and see if they ask your permission to pay themselves only after they’ve paid everyone else. If this is the case then I would fight to keep this person in your organization.

It never fails to amaze me how many Entrepreneurs pick the wrong financial controllers. They are so good at spotting gaps in the market, picking the right product at the right time, seeing opportunities before everyone else, attracting and scouting the right talent. But whe it comes to finding the right person that will look after their lifeblood of the business, they end up getting the wool pulled over their eyes. Go figure?

That’s why I like to keep things simple and expect the person handling my finances to manage them the same way I do. Make sure all the staff, vendors and accounts payable are covered before paying myself. Stay on top of receivables and make sure all invoices are paid in a timely manner. If you’re dealing with customers then kindly give them a reminder letter, e-mail or phone call to pay their bills on time. Keep things moving in “real time” and know that the money you have in your checking, savings and liquid investments is actually where you stand.

If you have the right person in place and you’ve been working together well for 5, 10, 15 or 20 years I would still advise you to look at your bookkeeping including scouring your bank statements and match them to your invoices and receipts every single month. That way you can continue to work together happily ever after. I had a wise Dutch Entrepreneur tell me that, “People don’t always do what you expect only what you inspect.”

Great advice that has served me well over the years and has been known to save many tears.

What money-trust-lessons/wisdom have you learned and would like to share?

Dominic Kotarski – Author of “The Making” and Founder of Sales Success Academy

Dominic Kotarski | International Consultant | Author | Coach | Trainer | Speaker

Dominic Kotarski writes, speaks, inspires, motivates and teaches on the most important aspects of your business including Sales, Coaching, Team building, People Management and Business Development. Get weekly access to his blog & training videos FREE by subscribing below

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