Larry Polizzotto

At Tanner LLC we work with a lot of technology companies and the subject software capitalization is always point of discussion. It is US GAAP, but we understand most investors just consider it a complication in the P&L and its hard to track and implement. The FASB board agreed this week to explore ways to simplify this GAAP, which would be welcomed. Below is a short summary of what they released. The Board decided to pursue targeted improvements to Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. Specifically, the Board decided to: 1. Specify that the costs of software that has unresolved high-risk development issues would be accounted for as research and development (R&D) expenses in accordance with Subtopic 730-10, Research and Development—Overall 2. Clarify the starting capitalization threshold for nonlinear software development, including: a. Remove the requirement for an entity to evaluate the preliminary project stage and application development stage when determining the starting point for capitalization b. Require that an entity consider significant unresolved development uncertainties if it is unclear that it is probable that a project will be completed and the software will be used to perform the function intended. The Board decided not to further pursue a single model for recognition and measurement of software costs, which the Board had discussed previously, and decided not to make targeted improvements for recognition and measurement to Subtopic 985-20, Software—Costs of Software to Be Sold, Leased, or Marketed.

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What to do... Next Steps: Recast the financials Request detailed financials: 3-5 year income, 2 balance sheets, along with general ledgers and bank statements Verify cash flow: Look at bank statements and accounts receivable/payable aging reports to identify any discrepancies.

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Ted Belinky This is an interesting observation, and not entirely new, but certainly gaining traction. CFOs are facing increasing pressure to be more strategic and less operational. Augmentation is a smart way for companies to bridge the gap without a disruptive and costly replacement. However, success hinges on the existing CFO's willingness to embrace change and collaborate. This requires a certain level of self-awareness and humility. It'll be interesting to see how this trend impacts the CFO role long term.

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Meme stocks are forcing companies to rethink investor relations. It's no longer just about the big players; retail investors & online communities are wielding real influence. CFOs need to adapt! Thanks for sharing, Secret CFO!

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When your CFO leaves: relying on an interim CFO for financial stability The departure of a CFO can cause turbulence in a company, and until a new one is hired, it might make sense to bring in an interim CFO. Here is a brief article that discusses this topic. https://lnkd.in/gnpbHrfH

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What are the benefits of having a CFO??? As a CFO I’ve worn many hats to achieve company wide goals, short term and long term. Let’s discuss a a handful of major benefits of having a CFO whether you are a small, medium or large sized firm. 1. Better Financial Planning: With their expertise in finance, CFOS can help develop long-term financial goals and strategies that align with the overall business goals. 2. Improved Decision Making: A CFO provides management with valuable insights on how different decisions could impact the bottom line. This helps them make informed decisions that lead to better results. 3. Efficient Resource Management: A CFO ensures efficient allocation of resources by identifying areas where cost-cutting measures could be implemented without compromising productivity. 4. Compliance with Regulations: CFOS stay up-to-date on tax laws and regulations to ensure compliance while minimizing any legal risks for your business. 5. Increased Investor Confidence: Hiring a full-time CFO shows investors that you take finances seriously, which increases investor confidence in your company’s future potential. In summary, having a skilled and experienced CFO can provide numerous benefits to businesses from better planning to increased investor confidence- all helping drive success over time!

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Great article from Forbes about Fractional and Virtual CFOs (vCFO):   1. Assessing the Need for a Fractional or Virtual CFO: This involves evaluating financial performance, considering strategic scaling plans, assessing operational efficiency, and addressing compliance and risk management concerns. 2. Benefits of a Fractional CFO: These include cost-effectiveness, experienced advisory role, and flexible engagement options tailored to the business's current needs. 3. Finding the Right Fit: Tips are provided for selecting the best fractional CFO, including looking for industry experience, checking qualifications, and evaluating communication skills.   If you’re looking for a vCFO, let me know.   https://lnkd.in/g2dUaRHE

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Many investors want to know when profitability will occur. I heard this AGAIN!!!!! What company at a few million in revenue will EVER be close to profitability if investor capital has been taken in which then requires a high return profile????? Investors, have you seen the level of revenue that a brand needs to achieve in order to get acquired? Brands are not getting acquired at $10M Brands are not getting acquired at $20M Brands are not getting acquired at $30M There needs to be enough substance on the top line to get scooped up at a 3x revenue multiple. That AINT happening with the mentality of getting to break even too early. Let’s change the narrative everyone, this is making no sense to me!!!!!! #cpgindustry #investors #pleasestop

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Worthwhile read especially for founders with VC investors. Please comment.

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I’m working with 4 brands under $5M in revenue that manufacture their own products. Here are some key things I have seen across the table: At under 50% utilization, manufacturing product margins are below 40%. Fixed costs such as rent and production management are a drag to margins in the early stages. The same amount of line workers are needed whether you do let’s say $300k vs $500k in revenue. If this holds true, margin scales up quite a bit as you reach the max capacity of those workers on a single line / shift. Automation equipment can cut labor significantly if the operation is highly manual to start. A 6-7 figure investment can cut workforce down by 30-50%. Having your own facility also means you can use it as a warehouse and use an internal employee for fulfillment. This cuts down the cost of shipping to a 3rd party 3PL and paying high 3rd party fees. In order to achieve high utilization of the facility in a shorter amount of time, private label should be looked at which can come with solid contribution margin to your bottom line Max Capacity is a real thing. If a facility can do $20M in revenue, ensure there is a plan for your next stage of growth. There are a ton of other comments / variables. Everyone chime in the comments!!!! #cpgindustry #manufacturing #scaling

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BluWave has a deep bench of 800+ interim CFOs that allow us to quickly and expertly connect private equity firms and their portfolio companies to the exact-fit interim CFOs they need.    In one case study example, a PE firm came to us in need of a stopgap interim CFO for their automotive operations portfolio company. Here's the details of how we helped:   The Situation - Needing to make a leadership change in their portfolio company, a PE firm came to us in urgent need of an interim CFO who could focus on the portco's cash flow and working capital optimization while the search for a permanent CFO was underway. Given the protfolio company's industry, the PE firm not only needed an interim CFO with financial acumen, but one with the ability to handle a complex operational landscape and turnaround skills.   How BluWave Helped - Thanks to BluWave's deep network of exact-fit interim CFOs, we quickly connected them with a select few interim CFOs with the exact experience they were looking for.    The Outcome - The client selected their preferred interim CFO from our presented options. Their leadership marked a significant turning point for the automotive manufacturer, helping them tighten cash flow, meet reporting requirements and guide them through a crucial transition period.   When you need an exact-fit, PE-grade interim CFO, contact BluWave and we'll be ready to support.   #interimCFO #interimchieffinancialofficer

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❌ Myth Buster Thursday! ❌ This week's myth: "Fractional CFOs only care about numbers." 🤔 Think a fractional CFO will be a cold, calculating number cruncher? Think again! ✅ Truth: Fractional CFOs are strategic partners who understand that numbers tell a story. They connect financial data to your business goals and vision. 💪 Here's how they go beyond the numbers: Big-picture thinking: They analyse your financials to identify trends, opportunities, and risks, aligning them with your overall business strategy. Communication skills: They explain complex financial information clearly and concisely, helping you make informed decisions. Problem-solving: They proactively identify and address financial challenges, finding solutions that support your business growth. Collaboration: They work closely with your team, building relationships and understanding your unique needs. 🤝 A fractional CFO is more than just a numbers person – they're a valuable asset who can help your business thrive. #fractionalcfo #businessstrategy #financialplanning #mythbuster #wrightcfo

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💼 𝐓𝐚𝐱 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠 𝐯𝐬. 𝐓𝐚𝐱 𝐏𝐫𝐞𝐩𝐚𝐫𝐚𝐭𝐢𝐨𝐧: 𝐖𝐡𝐚𝐭’𝐬 𝐭𝐡𝐞 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞? 💼 Most people think about taxes only when it’s time to prepare them, but did you know that tax planning is just as important, if not more? Here’s why ⬇️ Tax Preparation is what you do at the end of the year to file your returns. Tax Planning, on the other hand, is the proactive strategy you use throughout the year to reduce your tax bill. 𝑩𝒚 𝒑𝒍𝒂𝒏𝒏𝒊𝒏𝒈 𝒂𝒉𝒆𝒂𝒅, 𝒚𝒐𝒖 𝒄𝒂𝒏: 1️⃣ 𝑰𝒅𝒆𝒏𝒕𝒊𝒇𝒚 𝒅𝒆𝒅𝒖𝒄𝒕𝒊𝒐𝒏𝒔 𝒂𝒏𝒅 𝒄𝒓𝒆𝒅𝒊𝒕𝒔 𝒆𝒂𝒓𝒍𝒚. 2️⃣ 𝑴𝒂𝒌𝒆 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒄 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝒅𝒆𝒄𝒊𝒔𝒊𝒐𝒏𝒔. 3️⃣ 𝑴𝒂𝒙𝒊𝒎𝒊𝒛𝒆 𝒚𝒐𝒖𝒓 𝒔𝒂𝒗𝒊𝒏𝒈𝒔. Combining these two is the key to being tax-ready and saving more of your hard-earned money. 🧾 👉 Want to learn how to power up your tax readiness? Hop on our website for more info. https://lnkd.in/gDct67gU #TaxPlanning #TaxPreparation #FinancialSuccess #BusinessGrowth #TaxReadiness

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Executive Edge | Issue Two: Suite Success. Should a case study approach be used to successfully hire C-level talent? ------- If you're a #cfo currently working in private equity, venture capital (or other investor types), or, you're a business seeking to hire transformational finance talent Camino Search specialises in head-hunting & consulting for investor-backed tech businesses. Globally. #fd #saas #pe #privateequity

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Why PE-Backed CFOs Must Drive Team Alignment to Unlock Enterprise Value In the world of private equity-backed companies, every decision is scrutinized through a lens of value creation. The stakes are high, timelines are compressed, and the goal is clear: drive rapid growth and maximize enterprise value. For a CFO, financial strategy is only part of the equation; the true multiplier lies in aligning your team around a unified vision. Not too long ago, I was introduced to the EOS (Entrepreneurial Operating System) methodology. This system emphasizes accountability, data-driven decision-making, and streamlined operations. For this or any methodology to be truly effective, team alignment becomes the critical component to drive long-term value. Here’s why: 1. Focus on Key Priorities When every team member understands the mission and how their role ties into larger goals, distractions give way to strategic focus. With EOS, each team member owns key metrics linked to the company’s KPIs, ensuring that all efforts contribute to a growth-oriented culture and, ultimately, valuation. 2. Predictable Performance PE thrives on predictability, and EOS offers just that. Aligning teams with a structured system provides predictable results, reducing risk in projections and enabling strategic moves backed by data, not gut feel. 3. Accountability Drives Velocity Time is money, and cash is king! With a system focused on accountability, teams can move faster with clear ownership over tasks and a relentless focus on execution. Alignment reduces the need to constantly course-correct, freeing leadership to focus on high-level strategy. 4. Cultural Resilience Through Change In a high-stakes PE-backed environment, change is constant. Aligned teams adapt seamlessly, with EOS creating a shared language to handle shifts. From integrating new tech to pivoting to a new market, alignment helps teams thrive through change. 5. Enhanced Enterprise Value Ultimately, enterprise value is the bottom line. Alignment minimizes inefficiencies, maximizes productivity, and creates a cohesive organization that’s agile, resilient, and focused on value creation. For investors, alignment signals scalability and growth, making the company a more attractive target for acquisition or IPO. In the end, creating enterprise value as a PE-backed CFO isn’t just about hitting numbers; it’s about building a team invested in the mission. When everyone is aligned, the value created isn’t just financial; it’s cultural, strategic, and—most importantly—sustainable. PE-Backed CFOs: What systems have you used to successfully drive alignment and enterprise value in your portfolio firms? #Leadership #PrivateEquity #EnterpriseValue #EOS #TeamAlignment #CFO

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Rate cuts will be disastrous; we're seeing a replay of 2007 right now! We constantly hear different reports about the state of the economy, so I decided to break it down into 11 different indicators from various sources and rate them according to how strong, normal, weak, or relatively weak they are. This chart breaks down various economic indicators and shows you where we are with these indicators so you can understand firmly how the economy is trending. I put this chart together almost as much for myself as you guys. Overall, there was a mixed image of the economy, which I interpreted to mean that things aren't going well and would probably get worse.

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CFOs: Think you're ready for private equity? (Here's what you need to know) Private equity firms don’t just want a numbers person. They want a financial strategist who can thrive in high-stakes environments and drive results. In PE, you’re the bridge between the company and investors. Second only to the CEO, your expertise can make or break the company. Here’s where PE CFOs stand out: ➡️ Cash Management: Master cash flow in highly leveraged environments. ➡️ M&A Experience: Lead acquisitions and prep for eventual exits. ➡️ Working Capital: Keep operations smooth, even under intense pressure. Ready to learn what it takes to succeed in PE? Download this guide: https://lnkd.in/gf7ymH8Y

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How lean is your finance function? Top performers 🚀 (25th percentile) have 45.5 or fewer FTEs per $1B in revenue. Compare that to the median of 78.6 and 102.1 FTEs at the 75th percentile. (ww.cfo.com) With automation 🤖 and digital transformation 🌐 reshaping finance, now might be the perfect time to reevaluate your processes, people 👩‍💻👨‍💻, and profit models 💰. 👉 How many FTEs does your finance team have per SAR 1B in revenue? Please comment! Source accessed on 12.12.2024: https://lnkd.in/d8BaizTc Writer: Perry Wiggins, CPA, MBA      #CFO #Leadership #ICAEW #WBS #ACCAGLOBAL #StanfordGSB #Change #DigitalTransformation #WarwickBusinessSchool #BusinessTransformation #StrategicChange #BusinessGrowth #KSA #BRC #TechnologyWithPurpose #SaudiVision

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We are hearing from more and more of our clients that they are looking for operational CFOs. Regardless of industry, a financial leader that can effectively partner cross-functionally is essential to value creation. Here are some ways you can become a strategic finance and operations leader that can earn a seat at the strategy table. ✔️ Discuss your goals with your CEO & gain their support. First, you’ll need to ensure that your CEO sees the unique perspective that an operational CFO can bring to the business, because not all will. But it’s a two way street - the CEO must be willing and able to empower you, and you must be able to show that you are capable and worthy of such empowerment. The CEO’s support will be key to building credibility. ✔️ Exhibit these capabilities to cross-functional leadership. The CFO is often seen as nothing more than a financial gatekeeper. The one that says “no” to spend and focuses on cutting costs. Telling everyone what they cannot do, rather than what they can. By taking the time to get a broader understanding of business needs, you will better see the long term ROI on spend that may negatively impact the bottom line in the short term. ✔️ Put yourself in uncomfortable situations. Inevitably, another department will blow their budget or miss their KPIs. Rather than making sure they know that you noticed, work with that leader to strategize on how to avoid it in the future. Offering solutions rather than criticisms will build relationships, and cause those leaders to see you as a credible partner. ✔️ Walk the floor. If you are in an industry with a manufacturing or distribution facility, get out into those facilities. A visible CFO is more likely to be seen as an operational partner, and this will also help you see the impact and potential impact of significant capital investments. An ivory tower CFO is seen as an arbiter of no. ✔️ Hire a great Controller. By staying out of the minutia, you can spend your time focusing on the bigger picture. Don’t think of an ambitious Controller as gunning for your job, think of them as a means to evolve yours. When we place Controllers in middle market portfolio companies, we focus on candidates with at least some basic FP&A capabilities as well, so that the CFO can focus on operations, M&A and other big picture strategic tasks. Eventually, you can begin to teach the Controller about those tasks as well to position them to be a CFO. And if you're in need of a game-changing CFO, VP of Finance or Controller, the Artemis Executive Search team has 58 years of combined experience placing finance leadership. We even have candidates that have held dual CFO/COO roles, including one in particular that can start immediately. Follow Tara Borre Follow Artemis Executive Search #privateequity #cfo #finance #financejobs #operations #executivesearch #leadership #management #valuecreation

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