Stop Burning Cash ASAP

CFO TRENDS EPISODE 8

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Read the full episode transcript here. https://meshpayments.com/podcast/episode-8-stop-burning-cash-asap?utm_source=LI+newsletter&utm_campaign=podcast

Avia Yudalevich is a true corporate finance innovator with over 15 years of experience in global, omni-channel retail. Currently the CFO at Intrinsic Brand Inc, a women’s health CPG company, Avia specializes in growing annual net profit at mature Consumer Packaged Goods (CPG) brands. Responsible for both strategic and operational finance, Avia has mastered the art of partnering with business stakeholders to drive rapid growth and expansion.

This week, she joins CFO TRENDS host Chris Ortega to discuss the importance of cash flow and strategies for slowing down cash burn.

KEY TAKEAWAYS:

“Cash Flow Is King” ??

A critical indicator of the health of your company, cash flow determines your runway. Without an accurate view of cash flow, you could be in for some unwanted surprises.?

Burn, Baby, Burn ??

Burn rate is a direct complement to cash flow, measuring how much cash your company spends in a given period. Knowing your “burn” will determine how long you have before you need to get profitable or get a cash infusion, like a new funding round. According to Avia, startups should aim to always have between 12 and 18 months of cash runway in order to operate effectively.

Optimize Before Cutting Costs ??

Companies love to say that they put people first, but it’s hard to believe when mass layoffs are central to many companies’ cost-cutting strategies. While sometimes inevitable, layoffs can often be avoided or postponed by optimizing spend elsewhere in the business. Avia recommends starting by making sure your day-to-day spending is as efficient as possible.

Always (Re)negotiate ??

Even with large vendors (like Salesforce), it’s always worth renegotiating contracts. Especially when it comes to your company’s tech stack, team needs are constantly evolving. For example, Teams and Zoom subscriptions for everyone at a company may have made sense in 2020, but now you may be paying for more subscriptions than you really need. Making sure you renegotiate contracts with your vendors as your company’s needs change will save you a pretty penny - so reevaluate your contracts often.?

Transparency = Results ??

Wayne Gretzsky was right, “You miss 100% of the shots you don't take .” Don’t be afraid to be transparent. Avia suggests sharing your financial situation to the entire company. For example, have your finance team make monthly suggestions based on last month’s trends to sales and marketing. You’ll be surprised how much a little alignment will help you achieve your goals - but you have to help them so they can help you!

Scale Up with Automation ??

A forward thinker, Avia recommends thinking about what you’re doing today and then thinking about how you can do the same thing, but bigger. Can you scale what you’re doing by 10x or 20x? The answer is yes - with automation.

Want to Know More?

For the resources mentioned in this episode or to dive deeper into the topics we covered, check out the links below:?

Cash Flow and Burn Rate:

Cash Excellence (McKinsey)

The Smell of Burning Cash (Yahoo! Finance)

Burn Rate vs. Annual Recurring Revenue: Watch Your Efficiency (Oracle NetSuite)

Negotiations:

How to Negotiate with Powerful Suppliers (Harvard Business Review)

10 Tips for Negotiating Better Deals with Vendors (HubSpot)

Financial Transparency:

Seven Benefits Of Financial Transparency In A Business (Complete Controller)

How Does Financial Transparency Affect Accountants? (University of North Dakota)

And if you still want some more reading, check out How Real-Time Insights Reduce Your Company’s Burn Rate from the Mesh blog .

CFO TRENDS is brought to you by Mesh Payments

Mesh is the fastest-growing spend management platform in the US and uniquely meets the needs of global companies. Finance teams rely on Mesh to power global spend, automate manual accounting tasks, and optimize finance workflows.