In my career as an Orange County based CFO one approach I have taken in managing cash flow is accessibility. This might seem to be a strange aspect of the position and a strange ingredient in cash flow management, but I’ve found it to be very valuable. By accessibility I mean that suppliers to the companies that I’ve work with have direct access to the CFO. How does this make the tasks of being a CFO easier? Some benefits are:
- I’ve found that direct access to the CFO for suppliers will, at times, provide the company with better payment terms.
- Suppliers all knew that if they had a question or concern my door was always open to them.
- If there is a cash flow need for the company, suppliers are more apt to allow a little leeway if they know they can reach out to the CFO directly with questions.
Suppliers need to be viewed as a partner in your business. Many times they are smaller companies and the free flow of information between companies can be invaluable. Even very large suppliers benefit from accessibility to the CFO. The salesperson cab speak to their higher ups about order issues and they can say with confidence that they have spoken to the CFO about the situation. It puts a lot of people at ease.
At one company we were going through a tremendous growth phase where sales tripled from year to year. During that time and for the year before it I had, along with the VP of Operations, gone to lunch with a different supplier almost every day. The result was that the suppliers felt comfortable with our organization. They had access to top level management and we were always honest in our dealings with them. They didn’t always like the answers they received, but they always received a timely answer. We got through the growth period without having to obtain additional outside funding and at the end of the period our suppliers were very happy that they had taken a chance with us by being a little lenient.