The Not-for-profit sector (NFP)is facing a tidal wave of trouble. Heavy cuts to Government funding, due to poor economic performance and changing funding culture, will force the NFP sector to adapt to new business models to compensate. On top of that, many NFP organisations are Industry Associations, meaning their secondary sources of funding are corporate or individual industry members. This second source of income is also at risk.
The economy is slow, and individuals are trying to save money in light of low wage growth. At the same time, businesses performance is stagnant, meaning their event sponsorships decrease significantly.
Boards of directors are well aware of this economic shift, pressuring executives and staff to find a way to survive. However, there is no easy solution. At Tailored Accounts, we strongly believe that your Chief Financial Officer (CFO)is central to saving your organisation from shut-down.
The CFO & his accounting team act as score keepers. At Tailored Accounts, our CFOs can produce a weekly financial analysis to help the Board of Executives know the effectiveness of their business plan. Our CFO should be able to use financial KPIs (key performance indicators) to measure outcomes regularly and ensure your team is on track, whilst devising alternative plans in case of difficulty.
You could use many other KPIs to measure your business survivor plan; however, when it comes to finances, numbers don’t lie. A good CFO will accurately measure and explain the precautions needed so an organisation can survive given their time and budget constraints.
At Tailored Account, experienced CFOs can help your organisation predict and prepare for future outcomes. We are equipped with data analysis and mining skills to outline probable scenarios and give relevant advice. For instance, based on an analysis of the last five years, our CFOs might know NFPs will face a cash flow shortage in July, caused by
- National events coming up in August requiring investment a month before
- BAS, Super, Tax, Salary and other payables due July
- Board & Executive meeting in August meaning travel reimbursements
Our CFO could then advise the Board to proactively prepare for cash shortage that month, increasing their options.
So, if you are running a NFP organisation at risk of funding reduction, ring Tailored Accounts for a quick consultation. Our industry experienced CFO will be able to assist in turning the ship around before it becoming too late!