In the last year, our Fractional CFO team has worked with six distributors that came to us on the verge of bankruptcy and you might be surprised to learn that all would likely be considered “successful” with annual sales that averaged over $5 million. All had reached a situation where they were about to run out of cash with payroll and vendor payments in immediate jeopardy. Some common warning signs emerged as we worked to help these owners save their business and get back on track.

First, all distributors had financial statements that did not reflect the current reality of their business. They didn’t just have a few errors in the books, but the P&L and Balance Sheet had significant mistakes that rendered the financial statements untrustworthy and useless to the owner. Do you trust your financial statements? Should you?

Often, we see distributors grow sales, reach that next level or two and now they have a much more complicated business with online stores, client-owned and house-owned inventory, in-house decorating, commission sales reps, multiple locations, etc. And frequently, the person in charge of the financials is the same bookkeeper they started with 15 years ago when sales were only $1 million and business was simple. Has your business outgrown your bookkeeper?

Bookkeepers are great at the transactional parts of your operations – invoicing, A/R, A/P, even payroll and sales tax remittances with proper training. But they typically don’t have accounting degrees, nor do they understand debits and credits let alone financial statements.

Controllers are charged with making sure the numbers are accurate – getting the expenses into the right G/L accounts and making sure bank accounts, credit cards and all G/L accounts are reconciled monthly which at least provides accurate financial statements.

And CFO’s provide oversight of the finance department and provide strategic insights into what the financial statements are telling us – budgets, cash flow forecasts, margin analysis, EBITDA vs Net Income, inventory turns, capital requirements for growth strategies, etc. And in most mid-sized distributors, it is common for the head of the finance team to act like both the Controller and CFO while progressive distributors are moving their bookkeeping teams offshore to keep costs down.

And let’s clarify the commonly mistaken role of your CPA. Most distributor owners don’t think they have any financial issues because their CPA would tell them if there was a problem. But that is typically false and if you read your CPA’s engagement letter, it clearly states that all they are doing is filing your taxes based purely on the information you provide. No review, no audits. They do not really understand our industry or your business and almost certainly do not know your ERP system that feeds your general ledger. Don’t be lulled into a false sense of security.

Second, almost all struggling distributors were way behind when it came to closing month ends. Owners need timely information to make sound business decisions. Well managed distributors often establish a standard monthly financial review meeting often in the last week of each month. They expect their finance team to close the previous month and provide financial statements prior to this meeting. This provides structure and accountability to your finance team and results in consistent performance that enables the business to make decisions with the relevant financial information. Does your finance team have a deliverable deadline each month?

The combination of inaccurate information and lack of timeliness leaves owners to rely on non-financial KPI’s such as sales to gauge performance. And while sales are often a good indicator, owners frequently underestimate the impact on cash flow of consistently missing your sales targets. Sales oriented owners are optimist and expect the next big new client or large sale to be right around the corner, but while you are waiting for this to happen, you might be bleeding cash and without accurate and timely financial information, reaching a cash flow crisis moment can catch you by surprise.

If you question the numbers in your financial statements and are frequently behind in closing your month ends, it might be time to consider adding some higher-level talent to your finance team. Getting accurate and timely financials and making sure you have someone who really knows accounting and the merch industry can help keep your growing distributorship financially healthy.

And of the six distributors that were on the verge of failing, one failed, one has successfully bounced back and four have made the necessary tough decisions and are trying hard to recover.

The post Is your Finance Team Ready for an Upgrade? first appeared on Promo Consulting, LLC.

For many promotional products distributors, the numbers are the last thing that gets attention. And for sales focused owners, they are often misunderstood and a source of anxiety. You’re not alone if you’re operating reactively. One week it’s a surprise tax bill, the next it’s a client squeezing your margins, and somewhere in between, you’re trying to figure out if you can afford to hire the help you desperately need. This kind of financial chaos isn’t always loud. Oftentimes, it shows up in quiet ways:

• Delays in invoicing causing cash flow issues
• Vendors are getting paid late because you’re behind on collecting receivables
• Pricing that’s based on “what feels right” leading to insufficient margins relative to your ever growing overhead costs
• Disconnected financial reports that don’t paint a complete or accurate picture
• Big decisions are made with crossed fingers instead of clear forecasts

• Cash flow becomes predictable. Trade surprises for a clear understanding of what’s coming in, what’s going out, and when.
• Reporting becomes actionable. You’ll have financial reports and insights that tell you what you need to know, when you need to know it.
• Decisions become data driven. From hiring to pricing to financial planning, you’re able to lead instead of guessing

1. Phase 1: Exploratory Audit and Report – We begin with a deep dive into your ERP and accounting systems, identifying what’s working and what needs attention. Our findings are compiled into a detailed, easy-to-understand report that becomes the foundation for your financial roadmap.
2. Phase 2: Reconciliation and Clean-Up – If the audit reveals issues, we guide your team through a clean-up project to get your books accurate and reliable, often coaching your finance staff to reduce cost while building internal capability.
3. Phase 3: Ongoing Fractional CFO Support – We provide monthly services such as bank reconciliation, month-end journal entries, ongoing reporting, KPI tracking, and financial coaching. This support brings consistency, insight, and accountability to your financials allowing you to lead with confidence.

The post You’re Busy, But Are You In Control first appeared on Promo Consulting, LLC.

• Clarity you can act on. Not just month-end reports but meaningful insights like margins by client, project, or product category that help you make smarter, faster decisions.
• Cash flow confidence. Know what’s coming in, what’s going out, and what’s around the corner. We help you plan, not just react.
• Operational alignment. A fractional CFO helps align your team around measurable financial goals and ensures your back office runs as smoothly as your client-facing work.
• Scalable growth. Whether you’re hiring, upgrading systems, or thinking about an acquisition, we bring financial modeling and strategic support to guide your next move.
• Exit-ready operations. Even if you’re years away from a sale or succession, a fractional CFO ensures you build value, not just revenue.

The post Why a Fractional CFO Might Be the Missing Piece for Your Business first appeared on Promo Consulting, LLC.