CFO’s are champions within their businesses. Taking everything in their stride, getting on with their role and ensuring the business is in safe hands financially.
Are CFO’s underrated? Yes.
Are CFO’s underappreciated? Yes.
Should businesses appreciate them more? Absolutely!
One of the critical roles of the CFO and the finance team is to protect the bottom line. Despite the ebbs and flows of a business, meeting the budget and ensuring the bottom line is up to scratch and protected, is paramount.
What is keeping CFO’s up at night?
We meet many CFO’s and there is a common theme in the elements that keeps them up at night, including:
1. Securing finance to adequately run their business.
2. The performance of the business – management of sales revenue and cashflow.
3. Getting paid by their customers.
Point 3 is where we come in! NCI can help CEO’s sleep better at night knowing that if a customer becomes overdue or insolvent, we can ensure you are covered or help take action to get paid either way! Normally returns are 90% of what you are owed and means you are protecting the profits and the security of cashflow to enable you to pay your debts when they fall due.
There is a myth trade credit insurance or protecting your debtors ledger is expensive. However, typically premium rates are as low as 0.05% to 0.6% (depending on a number of factors) against your insurable credit sales. This means, at an average rate of 0.3%, a $75,000 invoice can be insured for as little as $225. A small price to pay for the comfort of knowing if that customer becomes insolvent approximately $67,000 will be coming back your way.
Bad debts do not only impact the immediate cashflow factors, but simply come off your bottom-line profits. At a 10% profit margin, a $75,000 bad debt would require another $750,000 in sales just to recoup that loss!
Imagine knowing the financial performance of your business is secured and protected! The CFO could actually be the hero of your business.