by Tobias Angehrn, Founder & Managing Director Tresio AG
Are you a new CFO, Head of Finance or simply a “financial officer” in a medium-sized company? Then this article is for you.
In the following article, we take a look at why the first 90 days in this new role are crucial and how you can maximise your impact in this short period. For the sake of simplicity, we will refer to the job title CFO – even if the official title in many smaller organisations is different, this is still the hat you are wearing now.
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Currently, the checklist is only available in German, but an English version is in the works and will be available soon.
The first 90 days in a new job: why these are crucial
The first three months in a new management position have a significant influence on how your future role will be organised in the new environment.
Your perspective is still fresh
In the first few weeks, you bring with you a very valuable superpower for any company: an outsider’s perspective. You will undoubtedly notice things and processes that you would not notice after some time on the job. Worse still: if you tacitly approve of processes, it is often not so easy to suddenly cut them off after a while in a role. It’s not for nothing that the saying goes: a new broom sweeps clean. Take advantage of this honeymoon period and define future initiatives and priorities in the organisation.
Trial period applies to both sides
The first three months are a probationary period in any job. Management will be watching you more closely than usual during this period. If things don’t work out on an interpersonal or professional level, this is the time to end the engagement early. This applies to both sides. After three months, draw your own personal conclusions and have the courage to resign if your gut feeling tells you to.
Establish your network of contacts now
Last but not least, establish relationships and get to know the organisation. Unfortunately, corporate politics can manifest in companies with headcounts as few as 20 people. This is unfortunately part of the game, and getting an early sense of this and understanding the real balance of power can help you implement future initiatives.
Full focus: Get your job done!
Don’t waste too much energy on this – you primarily want to do your job well as CFO and leave a positive impact on the financial organisation as quickly as possible.
So let’s take a look at the initiatives you can take in the first 90 days.
Day 1-30: Getting to know the new surroundings
How stable is the company?
Use the most recent interim and annual financial statements to get as comprehensive an overview as possible of the company’s financial health:
- First of all, what is the company’s liquidity situation? What will the situation look like in 1 month, 3 months and 6 months? Do the assumptions in the liquidity plan work out? Does such a plan even exist?
- Is the company generating a sustainable positive cash flow? If not, is there a convincing strategy to compensate for the cash burn or to finance it in some other way?
- How is the balance sheet structure organised and how is the company financed? What are the most important assets?
- How profitable is the company and how have sales and the most important costs developed in recent quarters?
Understanding the business model: How is money actually earned here?
Once you have an initial overview, it’s time to delve deeper into the figures and understand the business model:
- What are the revenue-driving factors of the business model?
- How is the company’s cost structure organised?
- What are the financial drivers of the business model?
- How long is the cash conversion cycle, is there a working capital problem?
Build relationships: Get to know the organisation
Utilize the initial period to familiarize yourself with your team, the management, and other key stakeholders. Take the opportunity to connect with individuals beyond your immediate circle and proactively uncover potential future challenges. You’ll be surprised by the insights you can gain from warehouse employees or receptionists
Evaluate the finance team
If you are taking over a team: Get to know them better and gain an overview of their personal and professional qualifications. Who has what strengths and weaknesses and where? It is also important to gain a deeper understanding of personal goals and possible development wishes.
Get a detailed overview of the processes and the tools and resources used. This will also help you to identify initial areas that you can optimise.
Day 31 to 60: Strategic planning and integration
Develop a financial strategy:
What are the company’s goals for the coming years? How can your department contribute to this? Derive the goals for your own department from this. Take into account the market environment and the positioning of the company.
Implement a reporting system:
- If a reporting system has already been set up: are the right key figures being tracked correctly with regard to the company’s objectives? Are the calculations correct? How time-consuming is it to obtain the correct figures and how regularly are they collected?
- If no reporting system exists yet: Start setting one up now.
- Switch to a modern, software-supported reporting system that interacts with the ERP as quickly as possible. This will take the pressure off your department and ensure continuous data quality.
Optimise cash flow management:
- Introduce liquidity planning on a rolling basis. Depending on the organisation of the company, planning for 12 to 18 months makes sense.
- Make sure that you cover both short-term planning on a weekly basis and medium to long-term planning on a monthly basis.
- Automate the daily bank reconciliation and ensure that you are aware of the current company liquidity on a daily basis.
- Plan multiple ‘what-if?’ scenarios; at minimum the best and worst cases.
- If you work in a company with negative cash burn, for example a start-up, focus on the runway and create a downsizing plan for the worst case scenario to ensure that all obligations (especially to employees and social security institutions) can be met.
- The same applies to liquidity and cash flow planning: modern software solutions pay off very quickly compared to Excel-based setups.
Day 61 to 90: Driving growth and increasing value
Financial leadership:
Take a proactive role in strategic decision making by leveraging financial insights to drive business growth.
Key Performance Indicators:
Establish and monitor key performance indicators (KPIs) to track progress and align efforts with strategic goals.
Stakeholder Communication:
Develop a communication plan to keep internal and external stakeholders informed of the company’s financial status and outlook.
Storytelling is playing an increasingly important role in CFOs’ daily lives. Figures are constantly available – the important thing is how you put them into context and what message you convey to your stakeholders based on them. This allows you to create real added value for your stakeholders.
Continuous improvement:
Initiate a culture of continuous improvement in financial processes by utilising technology and best practice to improve efficiency and insight.
Try to maintain the “outsider’s perspective” mentioned at the beginning even after the 90 days. Regularly exchange ideas with peers and try to keep your finger on the technological pulse. Stay curious – we wish you every success in your new role!
Set new impulses in your company – with the latest generation of CFO software that doesn’t strain your budget!
Hand on heart: You will not replace the company’s ERP in the first 90 days. Possibly never.
And you don’t have to. Modern CFO software such as TRESIO has a modular structure and is integrated with the existing infrastructure. This means that you can utilise the full power of modern planning and analytics software – regardless of which software solutions are already in use!
TRESIO supports CFOs with the following tasks:
Liquidity planning: With TRESIO, you can create detailed and dynamic liquidity planning that allows you to precisely forecast and manage your company’s financial future. The software makes it possible to run through various scenarios and thus be prepared for different future developments.
Multibanking: TRESIO offers an integrated multibanking function that makes it possible to monitor and manage all bank accounts and transactions in a single platform. This greatly simplifies cash management and provides a clear overview of the company’s financial situation.
Analytics dashboards: TRESIO’s extensive analytics features allow CFOs to gain in-depth insights into the organisation’s financial data. The dashboards provide a visual representation of financial metrics and trends, facilitating decision-making based on current and historical data.
Integration with existing tools: TRESIO can be seamlessly integrated into the existing software landscape, facilitating data exchange between different systems and creating a consistent database for all financial analyses.
By using TRESIO, CFOs can increase the efficiency of their department, make more informed decisions and thus make a significant contribution to the success of the company. Depending on the set-up, the solution can usually be set up within a few hours.
Get started today and create a free trial account!