CFO Training? Educated CFOs Pay Their WayWritten By: Gary Bartecki
Article Date: 01-03-2005
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
CFOs would welcome the opportunity to discuss industry-specific issues.
I was thinking about how much training and materials are available for department managers and CEOs through annual conventions, seminars and self-study. But there's very little directed towards one of the dealership's key players - the CFO. Many CFOs are also CPAs and take it upon themselves to obtain at least 40 hours of CPE credits each year. It's a shame that many of these CPE units are not industry specific. CPAs or not, I believe dealer CFOs would welcome the opportunity to meet and discuss industry-specific issues if such programs were available.
In the dealer arena CFOs face financial issues daily, many of which affect the profit of the dealership. It is surely in the CEO's best interest to take a personal interest in training CFOs. That being the case, the question is, "What should the training program cover?"
The auto industry has an annual convention for accountants that work in the auto industry. CFOs also attend it. Consequently, auto industry CFOs have the ability to meet and discuss industry problems and stay current on tax and accounting issues. There may be similar programs available for industrial and construction-related industries, but if there are I'm not aware of them.
Let's face it, equipment dealers have unique accounting and tax applications that are somewhat complex, and there is no formal training environment available for accountants or financial people entering the industry. Just learning the rental game is a lifetime achievement. In the end, accounting and financial personnel, whether they work for a dealership, bank or vendor, have to figure out the dealer game through experience.
Wouldn't it be great if we had a Dealer U for financial training? Wouldn't it be nice if everyone clearly understood industry standards? It would certainly be great if the IRS understood the business and how it works: It would make everyone's life easier and simplify financial communication.
We really need three levels of training: one for CFOs coming from another dealer business; one for CFOs with- out any dealer experience; and one for any manager, manufacturer rep, or banker entering the industry.
CFOs coming from another dealer type, i.e. the auto industry, need to learn how this industry works, how rental works, how each department works, how to prepare financial presentations, what the unique tax considerations are, and so on.
CFOs lacking dealer experience require even more training. They need to know how each department works, how to handle inter-departmental transactions and rental transactions, the unique tax and accounting issues, insurance, systems, employee benefits and financial standards associated with dealers.
The last category is for any new employee hired to work in the dealership or in a dealer support capacity. This program should provide a basic understanding of how a dealership makes money.
And, what if CFOs had their own annual meeting to discuss mutual problems. How about CFO 20 groups or an annual CFO Forum geared to financial subjects. Believe me, subject matter would not be lacking. Any of these education formats would work, and if supplemented with web casts, would be very beneficial.
AED is discussing such a program. An annual CFO Forum is on tap for 2005. Test runs for CFO training (Level 2) are also being planned. Web casts related to tax issues have already taken place. The only question that remains is whether dealerships will invest the time and dollars to have CFOs attend and participate in these meetings.
CFO training is a great investment. What better way to help CEOs make decisions. Think about it, how many times have CEOs returned from seminars or conventions with profit-enhancing ideas they were not able to implement because they could not correctly explain the program.
Difficult industry-specific tax laws - federal, as well as local, new complex accounting rules, the need for better profit and cash flow planning, the need to educate the banking community, and the need to take back control of daily business operations require a CFO that is current on industry and tax issues. To try and operate your business with something less is not prudent.
One caveat: You need the proper horsepower in your accounting department to begin with. The proper systems to provide information are also a must. Without proper manpower and systems, the best financial talent is going to have trouble evaluating new programs and won't have the time to implement new ideas.
CEOs - this is your responsibility. Find out what you have and make a change, if necessary. Your business and industry requires the best you can afford.
Educated CFOs pay their way. CFO training produces a positive ROI. Believe it.
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