The Frustrated CFO

Marketplace Fairness (???) Act, or Lets Stomp on Small Businesses Again

Believe it or not, but the Battle for (or against, if you will) the Internet Sales Tax has been going on for 20 years now. 

First, there were no online sales taxes at all.  Back in the early 90s, members of various legislative bodies thought that the World Wide Web was something that Al Gore invented and, therefore, didn't pay much attention to it, especially the Republicans.  Meanwhile, the online vendors (the term e-tailer didn't gain wide acceptance until 2000) and their customers justifiably acted like pioneers in the brave new world:  as far as they were concerned, they operated in the environment with no physical attributes, and no brick-and-mortar regulations were applicable to them. 

It didn't take too long, however, for the states to catch on and get all itchy on account of the missing revenues.  The first most obvious targets were those conventional retailers, who quickly added shopping carts to their websites: Godiva, Staples, Best Buy, Bloomingdale's, etc.  With them it was easy to enforce the guiding principle of sales taxation - the physical presence rule.  They have multiple locations practically in all states - collecting and remitting sales taxes are routine tasks for them.  A bit of code-writing and, voila, if your shipping address is in the state where the seller has a store, an office, or a warehouse, the tax will be applied.  

I was in the avant garde of the e-commerce consumers.  I bought my first book on Amazon in 1995.  I recall it was a new addition of Joy of Cooking: 1150 pages - too bulky to drag it with me from B&N.  A desire to own a one-of-a-kind Victorian coral bracelet sold by an antique dealer in Amsterdam trampled my inherent mistrust and led me to the conclusion of my first eBay purchase in 1996.  I had to fax my credit card info to the seller - we were still two years away from the inception of PayPal. And that same year I booked a room at Montreal's Ritz Carlton through Expedia.  I consider myself an Internet veteran.  Today, 90% of my consumer experience is managed online.  And I am not alone: in 2012 Internet sales amounted $226 billion.

And all these years, I've been kind of on the fence about this whole Internet taxation issue. On one hand, I LOVED not paying sales taxes for the items I bought from my home.  Plus, no state or city resources were utilized: I didn't use any public transportation, roads, or street parking; I didn't walk into any buildings; nor did I use any City utilities. The cost of my connectivity is taxed via my cable and power providers, while delivery services collect sales taxes from the shippers. I still remember how disappointed I was when Amazon opened a distribution center in NYC to facilitate same-day deliveries and started taxing my purchases.

On the other hand, the economist in me is fully aware of the importance of sales taxes for the state and municipal budgets. And, while I strongly believe that 70% of government employees are redundant and the rest are lazy, I do want all bridges to be repaired on time. Unlike other people, I understand that it's a capital-intensive process and money has to come from somewhere.  I knew only too well that Bluefly, with offices and employees in NYC, should've been taxing my purchases (they didn't) way before the CEO decided to launch a brick-and-mortar outlet.

I am a stickler for the rules that create common platforms for everyone involved: generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), international commercial terms (Incoterms), etc. Speaking the same language prevents misunderstanding. If we cannot avoid paying, collecting, and remitting sales taxes, let's at least stick to the simple rules of physical presence already in place. Even though, the interpretation of what constitutes "physical presence" in the Internet environment could be debatable. I kept pondering, for example, whether, besides the conventional criteria like leased or owned commercial property, payroll, and inventory, the location of web servers and interface workstations should be considered as well.

Yet, one thing has always been clear to me: If you don't have any type of presence in a state and don't use any of the state's resources in order to generate income, you cannot be made responsible for collecting sales taxes in that state. This is not medieval Europe, I thought: just because the governments want additional revenues, they should not just impose new tax-collecting laws like some Sheriff of Nottingham. This would destroy a lot of small businesses that were able to break out of their local boundaries and find their way into the national and even international markets through the web.

What a fool I was! Who cares about small businesses? Members of the government act according to their allegiances to a few Big Players with their big gains and losses at stake.  On one side, there are Wal-Mart, Target, COSTCO, and Amazon (boy, this alliance alone was unimaginable only a few years ago), who are literally everywhere on the ground and on the web. These "poor" leviathans complain that they are at the "price disadvantage," losing customers to those e-tailers (read: smaller businesses), who don't charge sales taxes. "All" they want is to level the playing field, i.e. for everyone to collect taxes everywhere.

On the other side of the barricade is eBay providing thousands of online shops and craftsmen with the means of offering their products to the world.  It stands to lose tons of fees if the members' business volumes contract.  Nobody represents the unaffiliated e-tailers.

Guess who tips the scales? In the beginning of this month, the Senate approved an Internet tax proposal (perversely named Marketplace Fairness Act), which is not based on e-tailers' physical presence at all and will force shoppers to pay sales taxes on the majority of online purchases. In basic terms: all online sellers will have to collect sales taxes and file returns for all states to which they ship their merchandise. 

The plight of small businesses, including the additional workload related to the new responsibilities, is almost an afterthought in the proposed legislature: the ones with less than $1 million in out-of-state sales will be exempt from sales-tax obligations.  What is this stupidly irrelevant number? Are they low-balling like some cheap hagglers?  Again, common ground, people! According to the Small Business Administration's definition, a retailer is considered "small" if the sales do not exceed $5 million to $21 million, depending on the product!

Why our various government bodies always have to be such opportunists and never think about the future impact of their decisions, I have no fucking clue. The e-customers have only this much disposable income: if they have to spend a portion of it on the Internet sales taxes, they will buy less goods.  Consumer market contraction anyone?  And in the long-run every time a small business is hurt, it affects the entire economy.  But who cares about the long run? The governments are more interested in grabbing whatever they can right now, whether they entitled to it or not.       

Newsflash: GOP Begs Obama for Tax Cuts via Radio? Seriously?

Dear readers!  We interrupt our previously scheduled postings for a series of very special announcements:

Radio waves are the last political resort. 

Apparently all other political channels are either broken or backed up by "more important" problems.  This passed Saturday, frustrated by the House/Senate stalemate, GOP asked Obama to keep Bush tax cuts intact via their radio address.   Is that what's going to work?  What is this the 1920s and everyone is glued to their Radiolas?    

Clearly, the issue that affects not just the monetary policies of this country, but also "minor" sociopolitical concerns such as, for example, the economic principles of true capitalism and definitions of social classes, cannot be successfully discussed in the policy-making branches of our government - the partisanism overpowers the reason.  So, the republicans decide to address the President directly... on the radio.  Moreover, on Saturday.  Don't they know that radio is primarily a weekday medium?  Most listeners tune in either on their way to and from work, or online in their offices.      

On the other hand, who the fuck cares? It's just an empty, check-mark step.  In reality, everyone is resigned to wait until November elections for the resolution anyway, because it's not the fiscal reasoning or survival logic that will dictate the decision.  The only thing that matters for the outcome of the tax-cut issue is which party prevails.  Meanwhile, GOP is trying to impress on their constituents that they are "doing something about it."   Just don't call it "pressing Obama" - that's way too blatant even for politicians.

Proof-positive: politicians are not real people.

Nearly 18 months ago, when President Barack Obama first threw the number $250,000 into the tax-cuts discussions, at least some financial publications, including MSN Money, questioned the suitability of that number as a middle-class ceiling.  Now, overwhelmed by the barrage of bad news, nobody talks about the number itself anymore.   

But I was always interested in understanding how the fuck they came up with that number?  What made "them" (whoever they are)  think that $250,000 salary qualifies someone as "wealthy?"  What kind of perverse minds decided that a small-business CEO, a senior financial executive, an adman, an average doctor, a sales person who spends 300 days a year on the road, don't belong in the middle class?  Are they an upper-crust?  Is it correct to bunch them up together with the private-equity billionaires or public companies' CEOs and make them pay taxes at the same rates? 

Yes, the majority of the general population will never make over $250,000.  But the same majority do not possess talents, perseverance, and drive of people who apply themselves to the best of their abilities and work 16 hours a day in order to make 6, 10, or even 15 times more than an average schmuck, who doesn't really try too hard and spends his workday surfing the Internet for TMZ news and shopping bargains.   

In fact, people who make $100,000 - $750,000 a year are usually the hardest-working sector of the middle class.  Most of them have built their careers or businesses from scratch.  And guess what?  They are not really that reach.  I know CFOs, doctors, lawyers, who make $300-$350K a year and worry that they will not be able to afford $245,000 a head in tuition, room, and board to send their children through a good college.   

And here lies the truth: the reason a random number is picked to determine who belongs to the middle class and who doesn't is because politicians are not real people.  Just like the super-rich, they are far removed from the reality of the every-day life.  Many of them are actually wealthy people.  And even those who are theoretically "middle-class" enjoy a lot of paid perks.  How can you possibly formulate the idea of social classes if most of your meals are paid by lobbyists and their clients?   

Administration doesn't care about the economic recovery of this country.

In principle, I would be very reluctant to agree with any official political statement.  But, whoever is actually behind the text of the GOP radio address got one thing right: small-business owners will be the first to suffer from increased taxes imposed on the earnings above $250,000.  Maybe the plastic people in Washington don't know this, but the majority of privately-held businesses are S-Corporations and transfer their incomes to owners' individual tax returns.

So, let's imagine such small business ran by two single partners, who work very hard to keep their business going, retain their 15 employees, and maybe even create new jobs.  If they are very good at what they do and also lucky, they may overcome all the difficulties of today's economic conditions and make $1,000,000 in net income. Good for them! 

Now comes the tax season.  Even though they left the entire million in the business, they have to split it and report $500K each  on their individual tax returns.  If the proposed tax rates are applied, together they will have to pay $335K to the federal government.  Add to that, state and local taxes - about $150K more, and the hard-earned $1,000,000 is immediately reduced to $515,000.  The $485K is taken away from the struggling business.

So, where is the incentive for the entrepreneurs to go on or go into the business?  What about the "middle-class" employees of these small businesses, those who make under $250K?  What will happened to them, when their employers go out of business squashed by these additional fiscal burdens on top of all other difficulties?  Do you think that the government cares about them, or the "economic recovery" altogether?  Or do they care about having enough money to bail out the next banking giant or a failing automaker?

Newsflash: Even NBC's Economy Watch Finally (Somewhat) Wakes Up

Wow!  Like a fucking parrot I have been repeating the same thing for years now.  But it's okay, I can do it again:

People (not just the economists and market analysts, EVERYONE!), stop applying old concepts to current economic situation!  This was not a recession and we are not experiencing recovery!  This is our new reality.  Get used to it! 

Look at the graph above.  That historical +15.6% gain after severe recessions of the past – it's never going to happen again.  Moreover, even the 1.7% reptilian movement upward, we supposedly experience right now, seems to me miraculous.  And it is definitely not assured - we may start rolling down at any given moment.

The picture is so undeniably obvious, even the politically-controlled outlets, such as NBCNews.com, have no choice but to talk about it.  They are the ones, who published this morning the Credit Suisse's chart above in their Economy Watch blog's post cautiously named "Economy may be permanently stuck in slow-growth mode."  The more appropriate title would be "Economy May Be Permanently Stuck." Period. 

The article is basically a compilation of data and quotes obtained from various resources, including a number of "prominent economists" and the Federal Reserve Chairman Ben Bernake.  The blogger, John Schoen doesn't express his own opinion or adds any commentary.  Nevertheless, the piece as a whole leaves an impression that all cited contributors and the policy-makers are also stuck in a perpetual state of having no clue, of not knowing what to do. 

This doesn't surprise me at all.  These people have been in denial far too long, but they cannot hide from reality anymore.  And now fear seizes their beings, because they start realizing that it's only going to get worse.  It's beyond depressing, it's funereal.

Invariably, one particular tidbit of information puts me into a vile mood, whenever it catches my eye.  In this assortment of bad news Mr. Shoen mentions in passing that 70% of US economic activity comes from consumers.  To me this is a reminder of terrifying fact that our country predominately retails (largely imported goods) and creates services for end users instead of producing industrial products for domestic commercial market or export.  

And it's astonishing that not a single of the quoted "dignitaries," not even for shits and giggles, raises a voice of reason and demands that the politicians stop sticking crutches into the armpits of clay giants and let them fall; that the Feds stop buying long-term bonds with our social security contributions; that the Supreme Justices stop passing laws guaranteeing highest ever compensations for CEOs of health-management companies.  Is Lynn Tilton and I are the only people who understand that only by supporting smaller privately-held DOMESTIC businesses we may be able to revive the economy?  That if "the powers that be" don't start this process right away, the country will become more and more restless? 

Marina's Nightmare

I must've dozed off, or something...  And I dream that I died and went to hell.  There my soul is tortured by things I fear the most...

...I see the country that used to be a beacon of freedom for the oppressed being perverted into a security vault.  I see cameras, metal detectors, x-ray machines, bag searchers everywhere.  There are satellites looking straight at me.  Someone always watches, hears every whisper, reads every word I type on my computer... 

...I see that the notion of merit is dead.  All that matters now is who you know.  Connections and "club" memberships are the hottest commodities... 

...I'm forced to watch people merging into two groups: millions of those who barely manage to eke out a living from whatever professions or trades they forced upon themselves and a small number of comfortable others - nothing in between.  And on the top, there are a handful of secret billionaires who have been quietly buying up the world... 

...Someone murdered the free competition.  Small businesses fall down like slaughter victims.  Banking conglomerates are being bailed out of their greedy fuckups through the ponzi schemes of international borrowing, but the treasury is empty.  In horror, I look at the decaying corpse of the glorious industrialism formerly driven by the production of quality goods - now it's just a feed for the paper-trading worms...   

...I see special interests' money usher through the Supreme Court unconstitutional laws, re-directing average taxpayers' earnings right into the pockets of the paying monopolies...  

...And I see young fools, with no prospects for decent lives and no understanding of underlying reasons for it, burning with desire for a change.  They've been dumbed down to the point that they cannot formulate their purpose or devise an action plan.  They huddle in a tiny space, called Zuccotti Park, near the place they assume to be the source of their distress, simply because they have nothing else to do...

...I stop by a newsstand strewn with tabloids covered by repulsive photographs of insignificant clowns.  I manage to pluck out one "real" magazine.  It excitedly screams into my face that Lena Dunham has received four Emmy nominations for her half-baked mediocrity.  The well-connected and moneyed hipsters, she so skillfully represents, jump up and down like mad rabbits...

...And I see a 5-floor-high advertisement board of Katy Perry in 3-D, but I hear that Fiona Apple's The Wilder Wheel tour is not sold out...

...And I see the Redeemer, the young woman whose words and images have the power to alter people's consciousness.  But nobody can hear her as she is sealed into a cell of fear built by haters... And I know that I contributed to her imprisonment.  She is smashing her body at the see-through walls in exhaustive attempts to break free, and I am not able to help her.  And those who can, refuse to do it...  I feel impotent, paralyzed.  

It hurts so much inside, as if somebody put a grenade where my heart is supposed to be and it's exploding.  I scream in agony.  I claw at my chest, trying to let the pain out.  I whisper to myself, "Wake up, wake up!"

Only, I cannot wake up.  This is not a dream and I am not dead.  This is the hell of my actual existence.  

The Second Quarter Financial Results, or They Always Kill the Messengers

 

© Copyright 2011 E and D CC, Inc.

Believe it or not, but we've already passed the mid-point of 2012.  While the foretold Armageddon is not upon us just yet (most likely due to the inaccuracy of our calendar), the immediate future of many CFOs can be predicted with a confident certainty: the second quarter financial results will be due in a couple of weeks.

Let's face it, this was not an easy fiscal period.  Whether large or small, businesses were affected by the volatility of the international markets, the slowdown of commercial demand, plunges in both commodities' prices and consumer confidence.  Even the bigwigs at Goldman Sachs and JP Morgan, the conjurors of "facts" that prevent trading markets from falling apart, had to admit today that "the recovery slowed in the second quarter" and downgrade their projections.  

What recovery, you clowns?  Anyway, those of us running actual businesses know: the quarter was mostly downsloping, choppy, and unhealthy.  This will translate into smaller revenues, narrower profit margins, and, for many, losses. 

The Frustrated CFO always feels doubly agitated about subpar performance results (obviously, antsy enough to talk about herself in the third person).  On a big-scale, as a small-business crusader, I am worried that with every difficult fiscal quarter the possibility of our economy getting back on the right track, with entrepreneurship reclaiming its rightful status as a backbone of capitalism, becomes less and less real.

And then there is an apprehension of inevitable consequences for all financial chiefs of privately-held companies (myself including), who cannot avoid playing the part of the bad-news heralds. 

Regardless of the nature and the size of a company, the main recipients of its performance results are owners/investors.  For public companies these are millions of faceless institutional and individual stock-market gamblers.  The publication of financial information by these companies is mandated by law and governed by SEC.  

When the picture is bleak, the Boards of Directors, terrified by the possibility of a sell-off and devalue of the stock (first and foremost, their own holdings), frequently spring into action to show the world that they are "doing something about it."  This usually amounts to moving the pawns on the corporate chessboard: we regularly hear about dismissals of CEOs and COOs perceived to be responsible for the failures.  At the same time, unless they are caught together with their auditors cooking the books, the big-time CFOs are rarely publicly flogged. 

Private businesses operate in an entirely different universe.  Here, people responsible for financial reporting, CFOs and Controllers, daily face their owners/investors.  The entire chain of  delivering the message is reduced to a single step.  Here you are with your perfectly accurate, yet unpleasant, reports and there, on the other side of the table, or on the other end of an email link, are the owners/executives. 

And, even though everyone in the room understands that you cannot possibly be singly responsible for the business's poor performance; that it is a result of many contributing factors; that the CEO herself disregarded your loud warnings and fucked up several crucial deals - the bosses invariably follow their first impulse to lash out against somebody.  At that initial moment of disappointment, there is no better a scapegoat than you, the news-bearer.  As if on cue, the bosses turn into cranky babies  and throw pointless tantrums.  The funniest thing that ever happened to me was when the President wanted to see the general ledger details and "check the numbers." 

Eventually, of course, they come down, and become reasonable.  If you've earned their respect and got their ear, they would listen to your analysis and accept your improvements proposals.  The thing is, though, we are human too and no matter how well we hold it together, the hurt of that initial heraldic punishments stays with us.

The Queen's Herald

Ten Reasons Why "CFO Techniques" Is a Must-Read for Small-Business CFOs

Reason #1.

"CFO Techniques" was NOT written from an academic perspective, such as of a typical university professor with a consulting-for-large-business on the side.

On the contrary, it WAS WRITTEN by your fellow CFO, who earned her professional stripes in the small-business trenches. During more than 20 years of this hands-on experience, with the last 18 in CFO and Controller positions, she was fortunate to gain exposure to all facets of financial management and organizational administration. Just like the most of you, she knows only too well what it means to wear many hats at the same time.

Reason #2.

Yet, the author did not loose a constructive touch of a theoretician. In writing the book, she employed her:

• in-depth knowledge of the fundamental principles that govern all areas of corporate accounting and finance,
• methodical approach to all tasks that compile ever-expanding scope of a CFO's responsibilities,
• and ability to dissect the cause and effect relationships of various concepts.

The result is the crystallization of the vast experience into a streamlined functional system, easily adaptable to various types of businesses and industries.

Reason #3.

"CFO Techniques" doesn't try to rehash official regulations, statistical information, bits of hot technology news, results of narrow studies, and such. The book's mission is to spotlight the most important areas of a CFO's or a controller's functionality:

Reason #4.

These professional cornerstones are broken down into crucial components described in bite-size, easily digestible chapters written in a fun and lithe language. The book presents the most complex financial and accounting concepts in comprehensive forms,  which can serve as introductory aids for those who just attained their first controllership appointment and as concise refreshers for seasoned professionals.

Reason #5.

It is an unfortunate truth that millions of small businesses struggle (and frequently fail) to survive not because they are neglected by owners and managers, but because these hard-working people simply have no clue what exactly is wrong with their companies, where are the weakest points, which areas require immediate improvements. Smaller enterprises suffer the most from the lack, even complete absence, of business intelligence and performance analytics. "CFO Techniques" is a part of the author's personal crusade to help small and mid-size businesses by providing them with survival tools (analytical, budgetary, procedural, etc.) that don't require expensive and complicated software.

Reason #6.

One of the most unique and valuable devices offered within the book is the proprietary  chart

INCOTERMS FOR ACCOUNTANTS.

Originally developed by Eclectic & Dynamic Controllership Consulting (E&D CC) specifically for businesses involved in buying and selling goods, it expands the definitions of standard Incoterms to include such accounting notions as title transfer rules and description of applicable source documents, thus accommodating needs of proper revenue, COGS, and inventory recognition.

 

Reason #7.

One of the main underlying themes of the book is the necessity for small-business CFO's and controllers to raise themselves above the bean-counting stereotype and become critical thinkers, indispensable members of the executive management team. "CFO Techniques" emphasizes this pressing demand throughout every section and accentuates the tasks that may facilitate such transformation.

Reason #8.

While shedding new light on the day-to-day routines and spinning conventional accounting and finance tasks as crucial and indispensable cogs in the business machine, the author's functional system gives equal rights to new categories of CFOs responsibilities, such as company-wide Information Technology Management, Risk Control, and Strategic Planning.

Reason #9.

The book takes a holistic approach to multi-faceted positions of CFOs and controllers and supplements specific structural guidelines and practical functional advices with discussions of more general topics applicable to any senior professional operating in private-business environment. Among others, it includes observations and suggestions on how to deal with people on different level of corporate hierarchy and what changes to expect in your future, even if at the moment you feel 100% secure.  

Reason #10.

Even if you don't learn anything new, or if you'll find the book not applicable to your specific professional niche, at the very least you can entertain yourself with the multitude of eclectic cultural references and business insights from the author's personal experience woven through the book's text.

Audit Season Woes

As a corporate controller, CFO, and consultant, I've been on auditees' side of the table for the past 20 years. Yet, I still remember the gratifying excitement of coming to a company as an auditor and testing the depth of my expert knowledge in an unfamiliar territory, quickly absorbing the business's specifics and immediately identifying the scope of testing. Well, Ok, I've been called a "show-off" and "know-it-all" many times, so forget me. Over the years, there were other public accounting professionals (not many, but some), who impressed me with their knowledge and sharpness, but it doesn't happen anymore.

I've been complaining about the decline of the quality of work across all jobs, from customer service representatives on the phone to the cardiologists in fancy hospitals, for years. But somehow I still get very frustrated when I encounter the same trend in my own profession. I cannot even explain why. After all, I am very conscious of the managerial accountants' limitations. The main reason for writing "CFO Techniques" was the desire to fill their knowledge gaps. Just a few weeks ago I wrote about The Unimaginable Abyss of Accounting Ignorance in the small-business environment. So, I should not be surprised when I am faced with the same situation while dealing with financial auditors. Nevertheless, it still gets me.

It's audit season, so in the past couple of weeks I've been helping my client (a young company) to go through their very first independent year-end examination of books and records. It's conducted by a small CPA firm hired before my consulting engagement commenced.

Under my guidance, the client's accountants did what I always advise to do in preparation for an audit (see Chapter 30, What Guarantees Fast and Painless Audit, in "CFO Techniques"), i.e. they loaded the appointed auditor in advance with statements and schedules of data required to make all testing decisions. He definitely had time to prepare well.

The client is an importer of raw materials. So, the revenue/cost recognition and cut-off tests are very important. Accordingly, the auditor gives a list of sales and purchases he wants to test. We provide all supporting documents to verify the propriety and accuracy of each transaction. After a little while the auditor knocks on my door with a bunch of papers in his hands. "How do I know," he asks timidly, "if these invoices have correct dates?"

Inside my head I scream, "Are you fucking kidding me?" But this is not about my frustration, this is about my client. So, I calmly explain that he needs to compare the recording dates with the source documents proving the product's ownership transfer as defined by Incoterms. I go further and demonstrate with one of the selected items: this sales order states CIF (cost, insurance, freight), which means that the customer owns the product as soon as it's loaded on the transport; hence, your source document is the Bill of Lading (BL) attached right here to the Commercial Invoice and the Packing List; the BL's date is the sale's date.

He soon comes back with another file and he is very apologetic, "I am sorry, could you explain this to me again? I never heard of those... terms... before. What did you call them?" I help him out, "Incoterms?"

Will somebody, please, explain to me, since when it's Ok for an auditor, who is responsible to lenders, investors, and other outside users to verify the correctness of books and records, to come to the client without the full knowledge required to perform his tasks? Why is he not even embarrassed to admit that? Why the hell in 2012 it did not occur to him to get his ass onto the world wide web, as soon as he heard the word "Incoterms" from me, and study them?

I guess, that would be too much to ask. Hey, he didn't even know what a "metric ton" was and asked me for the ton-to-pound conversion ratio instead of finding it by himself. He continued coming over, I continued providing him with definitions and rules. At some point he got so comfortable with this teacher-student setup, he even asked my advice on how to "test for prepaid expenses." Seriously? Did he forget that I was their from the client's side, essentially being audited?

And here I have to bring up my book again. There is Chapter 29 in "CFO Techniques" called Choose Your Auditors Wisely... Dear business owners, CEOs, CFOs, and controllers, please, read it if you want to avoid paying $25,000 - $100,000 (average range for small businesses) for low-quality accounting services.

Ten Reasons Why "CFO Techniques" Is a Must-Read for Entrepreneurs

Reason #1.

You are a part of a proud cohort of just a few millions of people who summoned their courage and said, "I will not work for the Man anymore! I will be my own boss!"

While your company is growing, it will need to keep its overhead lean. Meanwhile, you can use "CFO Techniques" as a surrogate for a seasoned executive that will provide you with clear guidelines for financial and administrative management.

Reason #2.

Don't let the title fool you. "CFO Techniques" is not a bean-counting manual. It's written with a view to achieving commercial success and places business considerations ahead of everything else.

Reason #3.

It will arm you with a flexible framework for structuring your business in a logical and sensible way.

Reason #4.

"CFO Techniques" is not an academic textbook either. It manages to shed new light on various aspects of finance and business in a fun and easy language. The book is organized into a bite-sized chapters sprinkled with familiar cultural references and illustrations from the author's professional life.

Reason #5.

Yet, it's packed with practical advice,

instructive suggestions, step-by-step guidelines,

checklists,

and visual examples.

Reason #6.

"CFO Techniques" will provide you with a comprehensive breakdown on acquisition of capital resources necessary to sustain and grow your business.

Reason #7.

An entire section of the book is devoted to assessment, reduction, and transfer of the internal and external risks your company may encounter in a normal course of business and in extraordinary circumstances.

Reason #8.

"CFO Techniques" will show you that one of the most critical determinants of whether your company will fail or prosper is the active attention to its performance. The book rejects the rigidity of the uniform approach to business intelligence and underscores the importance of selecting specific indicators that will have the most significant impact on your decision-making process.

Reason #9.

Anticipating your furture needs, the book describes the fundamental steps of strategic planning and basic techniques for explorting opportunities as well as diminishing external threats.

Reason #10.

And when you are looking to hire a CFO, a valuable member of your executive team, the book may serve you as a benchmark in evaluating the candidates' breadth of expertise and depth of knowledge.

"CFO Techniques" Technical Reviewer's Comment for Small Business CFOs

LinkedIn Groups

• Group: Small Business CFOs
• Discussion: How important is to have a Policy & Procedure for a small business?

"Marina Guzik references her recently published "CFO Techniques" book, and it truly is a terrific reference guide for savvy CFO's, containing valuable information about best practice considerations on a number of critical topics. She has done an outstanding job of writing an easy-to-read one-stop source of valuable tips on identifying and solidifying core business functions, and it was my pleasure to assist with its technical review. A must-read for those wishing to learn more about making their business the strongest it can financially be!"
Posted by Randy KRUG

CNN Breaking News: President Obama Is Elevating SBA to a Cabinet-Level Agency

In my book "CFO Techniques" I praised the U.S. Small Business Administration agency (SBA) for its role in supporting small businesses, particularly with their loan-backing program, and the amazing informational gold mine that is SBA.gov site - literally, the best resource out there. It's no surprise that when CNN's news flash quoted in the title of this post has arrived into my mailbox last week, it immediately caught my eye.

You've got to admire the skills of the public relation specialists in Washington (I wish my publisher's PR department was as masterful, or at least as industrious)! Look at the words selection: "elevate to a cabinet-level." Wow! Sounds like the president is going to take the "lowly peasant" (never mind facilitation of over $30 billion in loans per year and $570-million budget) and magically transport it to Mount Olympus to reside there with gods. And how democratic! The whole agency is being "elevated," as if all of its 2000 employees can be members of the cabinet. Some people may even think that this will empower the small businesses and their interests will become "special" - just like the ones of pharmaceutical giants, auto manufacturers, big oil, and mining conglomerates.

In reality, the only person who immediately benefits from this move is the SBA's Administrator, Karen Mills. She has become a member (already listed on www.whitehouse.gov/administration/) of Obama's cabinet and now will rub shoulders with the likes of Hillary Clinton and Janet Napolitano.

Whether Ms. Mills' accomplishments at SBA (or credits she takes for her subordinates' accomplishments) justify her new status could be a subject of an investigative journalism exercise. If it's White House's conclusion that she is the best candidate for providing the President with the advice on the only opportunity to save this country's economy, i.e. cultivation and support of the small-business environment, then be it.

I am more interested in the actions that will follow this first step in what being hailed as a program for raising "international competitiveness of American companies." You see, SBA is not meant to remain a cabinet-level agency for too long. In fact, it's not meant to stay a government agency at all. The intention is to "merge" SBA, along with the Export-Import Bank (ExIm), the Overseas Private Investment Corporation, the Trade and Development Agency, the Office of the Trade Representative, into the Department of Commerce (already a member of the Cabinet).

Whether they will continue calling this newly formed government Chimera the Department of Commerce or find it a new name (the way it happened with the Homeland Security), it is obvious that the already existing ministry will absorb all those other entities and, as it always happens, with the loss of independence, their functionality will be stunted.

Look, what happened when HMOs started swallowing far more flexible smaller health insurance providers and formed such giants as Aetna, CIGNA, Health Net, and United Health? Did it make anything better for members? Of course not, we all know this: the premiums went up and the coverage got worse.

Do consumers and businesses benefit from the crazy wave of bank mergers we have experienced in the past 25 years? Again, no. The services get worse and the fees get higher (plus, the process contributes to unemployment).

Any type of consolidation cannot be considered an improvement. It's done for a show - to demonstrated that something cardinal is done. The results? Who cares?

In case of SBA, this is really a shame, because they have made already and could've continued making a significant positive impact on the struggling entrepreneurial business sector. Now, their good initiatives will be drowned in public policies, fiscal regulations, national directives, and all that other country-wide crap. Their micro-level approach will be gone forever.

I find it incredibly ironic that the entity dedicated to help small businesses will be remodeled as a part of a large-scale program.