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Why CFOs of private companies can't sleep at night:
Top issues and how they handle them.

By Sharon Green

It’s good to be a CFO, and CFOs of private companies don’t have all those nasty compliance distractions. Sure you have to issue those periodic financial reports but that’s what all those underling bean counters are for. Everyone knows a CFO’s real job is to sit in the vault and count the piles of money, right?

Not so fast there, all you would-be Scrooges.

Robert Half Management Services conducted a survey * to determine the business concerns of 1,300 CFOs of private companies with over 20 employees. (See Figure 1)

Figure 1: CFOs were asked... "Which of the following are your biggest concerns as CFO?"

Hang on to your crutch Tiny Tim, it seems that the increasing cost of healthcare insurance topped the list.  Rising healthcare costs coupled with an aging workforce make this an issue that just won’t go away.

CFOs cited reducing costs in other areas of the company, increasing employee payments or co-payments and increasing costs to customers as ways of dealing with insurance price increases. (See Figure 2)

Figure 2: CFOs were asked... "Which of the following strategies is your company using to adapt to the rising cost of healthcare and insurance?"

Another strategy is incentivizing employees to stay healthy. Those incentives included a percentage reduction in health insurance premiums, cash deposits to a health savings account or gift certificates.

Managing cash flow followed hot on the heels of healthcare insurance costs as an area of concern. Collecting accounts receivable and past due accounts are challenging CFOs as is the problem of controlling costs in a time of rising costs.

Looks like those piles of money in the vault might not be as big as we thought. Still want that cushy CFO job? Keep reading.

Meeting hiring goals to recruit, train and retain skilled accounting and financial professionals is also challenging CFOs. Seems there just aren’t enough Bob Cratchits to go around. Trends suggest that this will become a bigger problem in the future as fewer skilled workers enter the workforce and baby boomers retire. Firms are increasing salaries and performance bonuses, expanding healthcare coverage, enhancing retirement plans and offering more flexible schedules in order to attract and retain talent.(See Figure 3) Nowadays it’s even standard practice to give employees Christmas as a paid day off. Scrooge must be rolling over in his grave.

Figure 3: CFOs were asked... "In your opinion, which one of the following is the most important consideration for job candidates today when evaluating employment offers?"

Internal control over operations also gets the CFOs of private companies hot and bothered. Although not required to comply with Sarbanes-Oxley reforms, changes in the public sector have prompted many private firms to voluntarily update accounting procedures and audit functions and to restructure executive compensation plans. CFOs report that these voluntary changes result in greater operational efficiencies and stronger internal control. This makes it easier to receive bank financing, qualify for government contracts and attract business from public companies and, hopefully, avoid any nasty repercussions from the Ghost of Regulations Yet to Come.

About 20 percent of the CFOs surveyed cited financial statement preparation and dealing with auditors as a top concern. While not legally required to release audited financials many private companies find audits provide confidence about their accounting methods and operations; and help keep Scrooge and Marley honest.

Now that CFO job sounds more like haunted nights than rolling around in piles of money. Add in the increasing pace of business and globalization and it looks like continued sleepless nights for CFOs; or it could just be an undigested bit of beef or a fragment of an underdone potato.

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* Top Five Issues for CFOs of Private Companies – Robert Half Management Resources