Contractors: Don't Ignore Your Chief Financial Officer
It's a frightening truth. Construction company failures are often unpredictable and, in most cases, the accounting people saw it coming. The chief financial officer of a business often plays multiple roles, including steward of the company's assets and strategist in the use of funds and credit. After 30 years researching the causes of construction-business failures and participating in the resolution of hundreds of distressed firms, I came to the conclusion that there was another role played by the CFO: ignored. The problem: When a construction CFO sounds the alarm, no one may be listening. Some CFOs are isolated or considered a necessary but unimportant function of the business. In discussing the issue with contractors, I've been told: "They don't know anything about construction." And a common response from the CFO is: "And you don't know anything about accounting or finance." A construction company has three primary functional areas: get...