Interim to Fractional Director of Finance
At Alt CFO, we believe change presents opportunities. Below is an example of when Alt CFO not only ‘filled a gap’ but also delivered value well beyond expectations.
Industry: Brewing, Distribution, & Hospitality
Company size: 900+ employees, $220M in revenue
The Gap: The CFO of a large international brewery found himself in a pinch when his Director of Finance resigned at the beginning of the budget season.
The Solution: Alt CFO provided an interim finance professional with over 20 years of experience to manage the budget process and the monthly financial reporting. Four months later, the budget was completed on time and each month’s financial reporting deadlines had been met.
The Value Added: The CFO needed a resource to ‘fill the gap’ but was not aware of an opportunity to fractionalize the position that was previously deemed a full-time position. Alt CFO rebuilt the budget process and templates, along with monthly financial reporting files to accommodate easy integration and updates between the two. The old monthly financial reporting file took over an hour to update. The new version and process took less than a minute. Frequent budget updates and changes to monthly accounting meant that the prior Director of Finance spent countless hours every month merely updating information.
Similar efficiencies were implemented by re-evaluating other processes and systems. Recurring monthly meetings with department leaders to review financial results were eliminated by providing standard reporting and analysis. Accounting questions, which the prior Director of Finance would seek answers to, were redirected to the accounting department. Outside of budget season the monthly workload was reduced by approximately 80% and rather than re-hiring as originally planned the CFO fractionalized the role to Alt CFO saving more than $200k in just 20 months.
Percentage of Completion Revenue Recognition
At Alt CFO, we love solving complex accounting and finance challenges in ways that deliver value beyond expectations. Below is an example of Alt CFO not only solving the original challenge but also providing previously unknown financial insights.
Industry: Event Management
Company size: 60+ employees, $40M in revenue
The Gap: The CEO of an event management company had no effective process for recognizing revenue on a percentage of completion (POC) basis.
The Solution: Alt CFO built a POC model that incorporated all the data and operational inputs needed to accrue revenue on a monthly basis.
The Value Added: While building the POC model, Alt CFO reconfigured the project numbering and naming convention to create consistency across the supporting financial and operational systems; accounting, payroll, expense management, and project management. This streamlined project setup and enabled data to be easily referenced and updated. With the monthly POC data, Alt CFO also built a 3-month cash flow forecast that identified specific project cash inflows, outflows, and underbilling.
Cash to Accrual Revenue Conversion
At Alt CFO, we believe a fresh set of trained eyes can create solutions previously unimagined by those more familiar. This was the case at a rapidly growing outpatient care provider that needed to report revenue on an accrual basis rather than on a cash basis.
Industry: Healthcare
Company size: 50+ employees, $30M in revenue
The Gap: Revenue was recorded on a cash basis, but the CEO desired to know revenue on an accrual basis to increase the visibility and predictability of cash flows. Prior efforts to calculate accrued revenue had failed due to the perceived variability in reimbursement rates of in-network and out-of-network providers.
The Solution: Alt CFO mined operational and financial data and created a referenceable 'payor matrix' that could then be combined with the monthly patient census to accrue revenue. The client had attempted this previously but was unable to properly and efficiently reference the payor matrix.
The Value Added: The client originally thought the 'payor matrix' was the key to accruing revenue. However due to the variability in patient coverage, oftentimes the 'payor matrix' did not accurately predict the amount paid by the insurance company. Upon discovering this, Alt CFO pivoted and instead created a 'patient matrix' which indicated the amount that the insurance company promised to pay at the time the patient was admitted. This new approach increased the accrued revenue accuracy to nearly 100%.