Why and how can you make your figures more reliable? Spoiler alert: it could save your business from going under.

What you will learn today:

• The importance of obtaining reliable figures in order to make the right decisions
• The key stages in producing financial data, the team behind these tasks, and the new automation paradigms that should not be overlooked: accounting x administration x finance x tech.

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More and more entrepreneurs are choosing to use an external part-time CFO before recruiting a full-time candidate. This solution provides access to a high-level resource to structure the finance function at the operational and strategic levels. The problem is that CFOs are expected to manage everything from pre-accounting to strategic advice, which is technically possible but financially absurd.

Imagine a surgical operation: the medical team, from the secretaries who manage appointments to the anesthetist who prepares the patient, to the surgeon and nurses, works in perfect coordination. Everyone focuses on their own area of expertise to ensure the success of the operation. Now imagine paying the surgeon to manage his own medical secretarial work and billing for his time as if it were open-heart surgery. Needless to say, the social security deficit would turn into a veritable abyss! In the same way, a CFO cannot manage everything alone. In order for them to focus on the company's strategy, they need a team to take care of administrative and operational tasks. Because a company, just like an operation, needs a specialized team to achieve its goals.

The idea seems simple enough: obtain a figure that reflects the reality of the business. But is that really the case? Let's take a look.

The challenges of financial management: Obtaining reliable figures

1. Reliability of figuresEntrepreneurs need reliable figures to run their companies. If the data is incorrect, making informed decisions becomes impossible. Figures are the raw material of performance. In most startups and SMEs, entrepreneurs monitor their activity using dashboards (sales, orders, etc.) and check their bank balances daily. But if the information is inaccurate, problems can lurk, especially during cash flow tensions.

2. Availability of information The immediate availability of data is crucial. In times of tight cash flow, a lack of accuracy can become a real trap. If the company relies solely on the figures provided by the accountant, it may find itself too late to react effectively. The two essential factors for maximizing the impact of financial data are therefore: Reliability x Availability

The path of financial and accounting data

Accounting data comes from various internal and external sources:

• Purchases & Expenses: Supplier invoices, expense reports, bank payments.
• Sales & Revenue: Customer invoices, subscriptions, contracts.
• Cash flow: Cash flow and bank statements.
• Salaries & Social Security Contributions: Pay slips, URSSAF (social security contributions), contributions.
• Exceptional items: Subsidies, depreciation, provisions, loans.

This is where the administrative assistant comes in.

Role of the administrative assistant

The administrative assistant collects supporting documents and ensures that they comply with legal and tax requirements. Here are some points of friction during this collection process:

• High volume of supporting documents: Invoices, receipts, contracts, etc. Document flow becomes increasingly complex as the company grows.
• Multiple sources: Emails, platforms, paper documents, etc. Without a clear process, documents can get lost in the maze of archiving.
• Compliance with accounting and tax deadlines: A missing document may result in adjustments or penalties.

Once collected, the supporting documents are entered into software such as Pennylane to generate accounting data.

Role of the pre-entry operator

The operator ensures that supporting documents are correctly integrated into the accounting system. This process includes:

• Checking supporting documents: Verification of legal information (supplier, date, amount, VAT) and correspondence with bank transactions.
• Integration and categorization: Importing supporting documents, reconciling bank transactions, coding accounting accounts, managing VAT.
• Preparation of accounting entries: Account reconciliation, verification of expense and fixed asset accounts.

Data analysis and auditing

Once the data has been integrated, it is crucial to analyze it to detect inconsistencies. Software such as Pennylane can process data recorded in accounting and bank transactions.

Data consistency checksBank transactions and accounting entries must be consistent. The task is to understand why the accounting differs from the business information and to reconcile the two.

Cash flow and activity-based management Focusingsolelyoncash flow management would mean ignoring crucial factors such as revenue and profitability. For example, invoicing €100k with a 3-month deferred payment directly impacts the company's financial results, but not its cash flow immediately. Automated extractions via Pennylane's APIs allow you to structure this data and produce an analytical report, facilitating the analysis of the company's profitability and performance.

Role of the Tech Team

The tech team is responsible for automating the extraction, transformation, and structuring of financial data from various sources (Pennylane, banks, management tools).

Decision-making: The role of the Finance Manager and CFO

Finance Manager: Checking data consistency The FinanceManager (FM) takes over to verify the completeness and consistencyof the dataonce it is available. They ensure that the data is complete and correct before incorporating it into the decision-making process. Once the financial statements have been produced, they are used to analyze the company's performance:

• Margin and performance analysis: Comparison with the budget
• Cash flow management: Cash flow forecasting, financing requirements management
• Reporting and consolidation: In the case of a group, reporting to the parent company

The CFO: Strategy and decision-making. TheCFO gets involved in the final phase, reviewing the figures produced. They identify ways to optimize financial performance and guide strategic decisions. This is when the final adjustments are made before the figures are considered reliable for decision-making.

Conclusion

The initial idea behind a part-time CFO is to save money so that the budget can be allocated to business or product development. But if they are expected to manage all administrative and operational tasks in addition to their strategic role, it becomes counterproductive. In the end, they become too costly, since 50% of their time is spent on the essential task of producing reliable figures. The next step? Understand the real cost of this mission and how to adjust resources so that every dollar spent brings real value to your business.