Speaking the Language of Finance on Your Leadership Team with Ben Mills

Mike Goldman (00:04)

All right, I am excited about our show today. We’ve got my friend, Ben Mills on the show. Ben is a seasoned CPA and fractional CFO with decades of expertise in finance, strategic planning and leadership across numerous industries. Throughout his career, he’s led businesses in developing strategies that improve profitability and cashflow. He helps clients interpret financial data in meaningful ways by providing industry benchmarks

and key performance indicators, he empowers leadership teams to make informed decisions. Ben and I know each other for probably about 15 years now. He knows me from way back when I think I was still trying to figure out how to pay the mortgage with the little I was making a coaching back then. But Ben, welcome to the show.

Ben MIlls (00:53)

Thank you. Thank you for having me. Yes, it has been a number of years.

Mike Goldman (00:58)

Absolutely, absolutely. We go from ⁓ breakfast at the Willow and Whisk to ⁓ having you on the podcast. So we’re going to talk about kind of all things finance and CFOs today. that’s something I don’t have a lot of episodes on. So I’m really excited to dig into the financial aspect of leadership teams. But Ben, we’re going to start with the same question I always start with. from all of your…

experience, what do you believe is the one most important characteristic of a great leadership team?

Ben MIlls (01:30)

I think if I were to boil it down to one of characteristics, I think it would start with just being an effective communicator. And that’s in all forms of communication, whether it’s email, verbal. And communication takes a lot of different things. It’s not verbal, me just telling or someone just telling you what to do. It’s being a good listener. It’s being showing empathy. It’s being a good listener, having good questions and dialogue. Because I think that’s where you build trust with your team. I think that’s the way that…

you show that you care about their concerns and that’s where you can get the message across. ultimately, whatever the strategic plan, the values of the company across has been a good communicator.

Mike Goldman (02:05)

And I’m going to want to dive into that a little later in the interview. And I definitely want to talk about communication, specifically communication from leadership team or leadership team member to CFO and CFO back to the leadership team, because sometimes I feel like those folks talk different languages. I definitely want to get there, but I want to start with some more basic questions since there are many

listeners who might be at the point that they have a more tactical finance function. Maybe they’ve got a bookkeeper, maybe they’ve got a controller, but it’s really just making sure the financials close at the end of the month and ready for taxes and that stuff. There’s not a lot of strategy going on. When in kind of the growth cycle of a company,

When does it make sense for a company to start thinking about, we’re in need of a more strategic finance function versus just a tactical one?

Ben MIlls (03:13)

I think it makes sense. it depends on the business and the industry. But I think it starts to make sense, especially if you’re starting to scale your business. You’re looking to grow your business or your industry or your business is going through some difficult challenges because of a changing environment. Your controllers, your bookkeepers are good. They’re going to tell you what you did yesterday. They’re going to tell you historically what you’ve done. But what I think a CFO brings and I have a passion for is

working more on tomorrow, working more on to the future, where you want to go. I have found over the years that many business owners can get so caught up or leadership teams can get so caught up in the day to day fight of just getting through the day and the problems they’re facing today that they don’t spend enough time on where they want to go, why they’re doing what they’re doing, and why did they get in the business in the first place. So I think a lot starts when the business is starting to scale, when they’re starting to grow, their industry is changing.

You need more leadership so you can strategically plan for those changes that are coming along.

Mike Goldman (04:11)

I love that distinction of a bookkeeper, a controller is more about yesterday and a more strategic finance function, a strategic CFO is more about tomorrow. I think that’s a really good distinction. so when it comes to a CFO thinking about tomorrow, like what is the role of a CFO in doing that versus a CEO?

Ben MIlls (04:38)

I think the role of the CFO is doing a lot more of internal stuff, bringing the different departments together and aligning them with where the company is going. Whereas the CEO or the executives and the senior leadership, whether it the board or the CEO, are fundamentally shaping the overall direction. I think a lot of what the CFO does is bring all the different areas of the company together to make sure we’re going in the same direction.

and try to assist the leadership team in aligning all the different operations in one direction.

Mike Goldman (05:10)

And I would imagine in addition to that, making sure that the future plans could all get paid for, that there’s enough, yeah.

Ben MIlls (05:18)

Well, exactly. mean, it

boils down to the money side of it. And I think CFOs often get a misnomer image of what we say no to everything if it costs money. And I don’t think that’s the case. I think what people don’t understand a lot with CFOs is they’re trying to balance all the different areas, the balls that they’re juggling at the same time. And obviously at the end of the day, finances play a big role in that, in anything that you’re doing. But I don’t think it always just comes down to finances.

There’s other things that play into it where you’re going with the company. What’s their strategic plan? And I think we’ll get into it later But I think what a lot of the little different departments or different areas of organization They’re in their silo and they don’t realize the input impacts of all the other different areas of the company where the company’s going and stuff like that that are moving at the same time because they’re often just in their one area Whereas the CFO is sort of has his hands in a lot of different areas juggling everything at one time

Mike Goldman (06:19)

You talk in the bio, I mentioned KPIs and I know you spent a lot of time with your clients on helping them figure out what the right key performance indicators are, but specifically to that finance function, to the CFO for the CEO who’s listening. How should a CEO measure the success of their CFO or of their finance function? Because, and I’ll preface it with,

You know, very often when I work with leadership teams and I go through each function of the business, sales, marketing, finance, HR, and I say, what are the measures of success, which is another way to say key performance indicators, KPIs, for, you know, very often quickly they say, ⁓ for finance, it’s net profit. And it’s like, really? Like, finance is responsible for reporting on net profit. Are they responsible for net profit? So, so.

Ben MIlls (07:01)

Right. Right.

Mike Goldman (07:15)

What do you think? How should a CEO measure the success of their CFO?

Ben MIlls (07:22)

If I was to measure the success of the CFO, I think it would be how well they’re bringing the different departments together and moving the ship forward as a company, keeping it financially strong, but still achieving the goals of where they want to go. So that could be metrics as far as cash flow would tie it into revenue growth, tied into profitability, because it’s a balancing act. We all know we could grow revenue all day long if we just drop all our prices and lose a lot of money.

So it’s finding that balance of achieving their strategic goals of where the company wants to go, but balance with the operational strength, financial strength of the company and bringing the departments together with one common goal. Explaining to all the different departments how they play a role in the success of the company and where the company wants to go and getting them on board with that mission, with the plan of where you’re going.

Mike Goldman (08:18)

What are some examples of specific measures? Like you mentioned cash flow and that’s one that always comes to mind for me for finance. It’s like, well, the CFO is not the person accountable for net profit, but given a net profit, they might be accountable for net cash flow based on that net profit. So is net cash flow the right kind of measure? Am I wrong? And maybe net profit is a measure. what are one or two? Yeah, go ahead.

Ben MIlls (08:44)

I don’t know.

think all the different measurements that you just mentioned, the CFO plays a role in them because I think they help drive them. They’re not necessarily the person that goes out and sells the product. They’re not the person that’s necessarily driving it, but they are the person that’s playing a big hand in a lot of the overhead costs, where money’s expended, where money’s being put.

They also play a big role in what investment you’re going to make and what’s the return on those investments. They also play a big role in your risk management. play a big, so I don’t know if there’s one perfect metric that I’ve ever seen that would say if the CFO does X really this one metric, they’re perfect CFO. I think it can be a little bit more complicated to that. I know that might not be the exact answer is you might say.

If you go to an accounts receivable department, you can have metrics like day sales outstanding. You can look at things specific to accounts receivable. Whereas I think the CFO is much broader. So I think if I were to evaluate it, it would be part of what is the overall strategic plan of the company and is the CFO making steps toward executing that plan in a financially sound way. ⁓

Mike Goldman (09:54)

Got it. And I

think you did mention a few measures that I would use as well. And I think we’re aligned on that, whereas some measure around the management of cost. And no, they’re not responsible for every line item of cost. But I would imagine a strategic CFO, even a great controller to some degree, should have some accountability for managing those costs and trying to hold for.

Ben MIlls (10:05)

Right.

Mike Goldman (10:20)

costs, ROI, cash flow, things like that. Those sound like the right kinds of measures. So let’s move on to communication. I said we get back to that and that was your answer to what’s most important, one most important characteristic of a great leadership team. So I wanna talk about communication going two ways, CFO to team and then team back to

Ben MIlls (10:22)

Right, right.

Mike Goldman (10:47)

CFO and actually want to start with team to CFO is you know, how can leaders better communicate and influence CFOs like you said very often the CFO is looked at as the the person who says no to things and that’s not the way it is that that’s not the way it ought to be but How could leaders do a better job of communicating and influence CFOs? How can they better speak?

financial, if financial is a language to the CFOs.

Ben MIlls (11:17)

Sure, sure.

Well, I think the first thing, and I’ve been in many of these meetings, is the first thing I would tell people is get to know who your CFO is. And what I mean by that is not just a finance guy that can calculate net profit. If you’re a marketing department, if you’re an IT department, if you’re the HR department, get an idea of how well your CFO knows your area as far as does he know a lot about social media? Does he know a lot about marketing?

Does he know a lot about IT and AI and all these things? And then craft how you present things to him with that in mind, that context in mind. I’ve been in meetings where people are coming wanting to spend a lot of marketing dollars in different areas. And honestly, I have no idea what they’re talking about because they’re using anachronisms. They’re using, you know, things that I just, I don’t know the phrases or the methods they’re talking about.

or even in the IT world. So I think it first starts with understanding the CFO and where they come from and how much they understand of your area. And then the next thing I always recommend is tie what you want to do to the plan of the company, the strategic plan of the company. So where is the company going? Are you in a growth stage? Are you looking to break into new markets? Are you looking to change how you go to customers? You’re changing your, and then tailor.

what you want to do to that. And I’m taking this from a marketing perspective. If you’re a marketing department and you’re looking to expand revenue, change your customer base, I think when you go to the CFO, it’s not just say we need to spend more money on social media. know, we need to spend more, explain to the CFO what social media platforms, why you think they’re good, why you think your customers are there or your end users or whoever you’re trying to reach are there and back it up.

and explain it to them. I think it’s a much more powerful thing than just saying we need $500,000 to put ads on Facebook. I think if you explain why Facebook makes sense, or any social media platform, but why it makes sense, I think you’re communicating at a much more equal level that the CFO would understand.

Mike Goldman (13:26)

And Ben, when you say communicating why it makes sense or backing it up, does that equal, you know, come with what you think the ROI is? Like I need to spend $500,000, you know, on, you know, a new CRM package or, or, know, whatever it is. And here, here’s the return on investment. I think I’ll get like, do you come to the CFO with that? Or is it the CFO’s job to help, to help build that along with you?

Ben MIlls (13:55)

I think I would come with that to the best that you can because it would show the CFO that there’s been a lot more thought and thinking into the plan that you’ve developed. I also recognize that marketing’s not a perfect science either, but at least it shows that there’s a lot more thought to it and rationale behind why you’re making the decisions you’re making on what that return would be. It would be the same with IT, if you’re looking to spend more money on software.

That’s one of the biggest challenges CFOs face today. Investing in AI is quite expensive. It’s trying to figure out what the return on that investment is going to be in two years, three years, five years, because they’re managing cashflow today. And it’s a big unknown right now. It’s a wild, wild west with lot of this stuff on where it can go. So it’s a challenge that a lot of CFOs are facing, especially with the technology side. We know we need to go in that direction.

You know, it’s a learning curve for everybody. So it’s a double edged sword. But I would go to them with how does it align with your business plan, their strategic direction of what the company wants to do, and what are the costs and the return on that investment that you’re hoping to see when we make it.

Mike Goldman (15:06)

way back when, you know, late eighties, early nineties, when I first, when I was a management consultant, you know, if you, and I’m going to use software as an example, cause you just used it it’s a good one for, for where I’m about to go is, you know, I worked with, with companies that were spending, you know, tens of millions of dollars on software. And I worked with all fortune 500s back then.

You know, if they had an ROI that said, know, here’s the ROI and we’re going to make our money back in eight years. It was like, okay, let’s go do it. Eight year ROI. That sounds good. These days, you know, my senses, things are very, very different. An eight year ROI is like, you know, go somewhere else. You’re not getting my money for an eight year ROI. you know, I think it’s, it seems to me like today is a much shorter term. Like if we’re not seeing money.

Ben MIlls (15:42)

Right.

Mike Goldman (15:58)

a return on investment this year, you’re not making the investment. But how should we be thinking about length of time before we start seeing a return?

Ben MIlls (16:05)

Well, as you know, everything in the world is sped up. Back in the 80s and 90s, it would be, Mike, I’m going to mail you the documents. If you can look at them in two weeks, let me know what you think. Now it’s, Mike, I emailed it to you at 9:05 It’s 9:10 Have you read them? The world is sped up dramatically across the board on everything that we’re doing. So I think the return is much shorter. I think it’s now a 6 to 12 month, 24 month return that people are looking at.

And everything is just moving a lot faster. And in the technology world, AI today will be old stuff in a month from now. So it’s a constant struggle that everybody is facing. And CFOs in every industry are facing the same challenges. It’s not new.

Mike Goldman (16:48)

So,

yeah, so that’s super helpful in how as a leader we ought to be communicating with, influencing and building a relationship with the CFO. Now let’s go back the other way. You said earlier that sometimes the CFO is viewed as the person that gets to say no all the time. For the CFO that’s listening, or the aspiring CFO that’s listening, what could CFOs

focus on do better in communicating and influencing the rest of the leadership teams. They’re not just looked at as the person who’s going to say no.

Ben MIlls (17:27)

I think what they would start, and I would say this with any leadership position, is the first thing is understanding that communication is a two-way street. And it’s not just me telling people what to do or the CFO telling people what to do. So what I would do with any senior leadership team is initially just start by listening. By listening to the other leaders, the other people on your team. Listening to their concerns, listening to their perspectives. And truly understanding it and the way you can truly show that you’re listening.

is having insightful questions. I think sometimes people think that the CFO has to have all the answers to every question that comes up, and I don’t think they do. And I think a smart CFO was willing to listen and to make changes with new information and willing to adapt. So I think the first thing that you can do is build credibility with your management team by listening to them, by hearing them and letting them voice their concerns and any issues that they are having. It starts with that.

⁓ And you’ll also learn more about the departments and you’ll bring in more awareness. And I think people feel more validated that they’re being listened to and it becomes easier to bring them onto the same page as far as the strategic direction of the company. I have found that leaders that just walk in and bark out orders and demand things, in my experience, aren’t usually that effective. And they’re much better if they listen to what’s going on.

Mike Goldman (18:50)

Related to that, one of the things I’ve found in more small and mid-market companies, and I imagine it exists in the larger ones too, I just don’t spend a lot of time there these days, but the level of financial competence on the leadership team, with the CFO hopefully being the exception to this, but the level of financial competence

is not necessarily there. The understanding of how to read a P &L or the importance of the balance sheet or the cash flow statement. Now, certainly leadership team members don’t need to be CPAs, but the level of competence is one that I find is very often lacking, number one. And number two, lacking in a way that folks are

uncomfortable even asking the questions because they feel like they should know. They feel like they should know exactly how the gross margin is calculated or they feel like they should know more about cash flow or the balance sheet. what is a CFO’s responsibility in making sure that the leadership team members and it probably goes beyond just leadership team, but let’s focus on the leadership team.

Does the CFO have a responsibility to improve the financial competence of the leadership team members?

Ben MIlls (20:21)

In my opinion, from my experience, I think they do, or I think they have a responsibility to do that. I’m not saying you have to bring them to the level where the CEO now is a CPA and take the exam, but I have found that it’s important that the CEO and the senior leadership team understands the parameters in the basic financial statement model. And I’ve spent a lot of time in a lot of different sized companies, sometimes explaining how cash flow works, how gross margin works.

how revenue is good, but if you have to wait 300 days to get paid, you have a problem. And the power of the cash flow. So I think it’s an important role to be an effective CFO, that you’re explaining that to the different leadership members of your team, so they understand it a lot more. And I run across this a lot, especially with a lot of big family-owned businesses, that I find that the owners and the CEO…

They’re very good at what they do, whether it’s a service or the product they deliver, but they don’t have a lot of finance background. And that’s okay because they recognize that they don’t have it. And their first step is to hire a professional that can do that. And I think that’s been a good and effective CEO is when you don’t have strength in a certain area, you bring in professionals in that area to help you. And an analogy I always make is would the CEO build his own website?

what he doesn’t know how to build a website. So what is he doing? How he hires a web designer. Well, if he doesn’t understand the finances, they hire a CFO to help them with their strategic planning part of the business. An effective leader understands what they can do well and they can’t do well. And they look, they fill in the holes with professionals that are good at that.

Mike Goldman (22:00)

Yeah, I could remember years ago, I was introduced that there’s a book and I wish I remember the author’s name. It’s called, ⁓ the accounting game lessons from a lemonade stand. And it’s written like a children’s book, but it teaches, you know, it teaches all about accounting and P and L and balance sheet and different, you know, a different, why, why is it so the two different accounting methods and it’s slipping my mind.

Ben MIlls (22:26)

Right, are cruel and cash.

Mike Goldman (22:27)

Yeah,

cruel and cash. and it teaches it by, you know, kids at a lemonade stand. And I found that so helpful because again, what I found is a lot of members of a leadership team are afraid to ask the question because they think they ought to know it and they don’t and it’s OK. So I think your point’s a good one, you know, that it should be the responsibility to some degree of the CFO.

Ben MIlls (22:44)

Right. Right.

Mike Goldman (22:56)

And I would say as a CFO, be proactive. Don’t wait until you realize, my God, these people have no clue how to read the P &L or they have no idea the importance of managing SG &A and how it impacts cash flow and what a cash conversion cycle is. Don’t wait until they ask the question, be proactive. And I would say, off at that, teach it to me like I’m a 10 year old.

and don’t assume a lot of knowledge.

Ben MIlls (23:26)

No, and I think the better informed or the better you help the leadership team, they’ll better understand your decisions and your role as the CFO when you’re making them, because they’ll have a better idea of scaling the business, of cash flow, of the importance of getting paid quicker, because they’ll have a much better understanding. And being proactive is spot on. Don’t wait till they ask you the question. Sometimes I just go right into it and explain it. And you can read on their faces if you’re an effective communicator that…

They appreciate it, they don’t fully understand it, it’s a helpful conversation. ⁓

Mike Goldman (24:00)

Yeah, and at worst

they say, Ben, I’ve got this, I understand it. The way you calculate gross margin and you go, great, that’s good, but don’t assume that.

Ben MIlls (24:08)

Right, right,

right, right. I mean, I’ve worked with clients in the construction area that they didn’t understand how to price out their jobs that well because they knew their materials were X dollars and they knew they were going to have to pay some labor costs, but they didn’t realize why they would be losing so much money. And I had to walk them through how they have to have a gross profit of a certain percentage to cover their overhead.

And if revenue goes up overhead should not necessarily go up at the same rate and it’s explaining the math to them. It’s key. It’s key for the business. And you can’t assume people understand everything. Just like if an IT person came to me and started speaking about the how AI works and coding. I wouldn’t know that stuff. So CFO shouldn’t always assume everybody’s on the same playing field with.

⁓ KPI’s and how they’re driven and stuff like that ⁓

Mike Goldman (25:05)

The

question of financial competence leads me down the road to something I want to get into because it’s a conversation that happens very often when I start working with a CEO and the leadership team. And that’s the question around financial transparency. There are some organizations, especially more closely held types of organizations, family businesses that

man, I’m lucky if they share revenue with their leadership team, let alone the rest. We share if we’re up 10%, but we’re not gonna share revenue, let alone sharing net profit. Man, if people knew what our net profit was, everyone’s gonna ask for a raise. so what are your thoughts? And of course, there’s no one right answer, I would think, to share everything with everybody versus share nothing because they’re gonna share it with other people.

They don’t understand how to use it anyway. What are your thoughts? What’s your philosophy on the level of financial transparency? What should be shared with the leadership team? And then if you have a thought on what should be shared, cascading down through an organization.

Ben MIlls (26:20)

Well, I’d first say I would agree with your initial concept that I don’t know if there’s a right answer per se, that you have to do it this way. This is the only way to do it. It’s the right answer. So I say this with, you know, every situation can be slightly different. But my opinion is if you have a core leadership team that’s driving your business, your key players, your key people in different areas of the business, I would share financial information with them. I would share with them because that will help them buy into it.

Otherwise, they’re just chasing a black hole of, have no idea what’s going on. Otherwise, they won’t really fully understand the importance of cash flow, of how, they don’t collect the money quicker, how it impacts the rest of the company. It’s harder to get a buy-in of your team if they’re chasing an unknown, if they really don’t know what the overall goal is and where they want to be and how they’re doing.

and how their decisions impact the bottom line. If I have to make decisions on the profitability of a company and I’m a leadership person in a sales role or something and I have no idea how it’s gonna impact the company, how it’s gonna impact our cash, how, it’s hard to get them to move. It’s hard to get their buy in. I was at a client the other day that,

cash flow is tight, customers pay on 200 day terms, 300 day terms. And we’re working to change the mindset that we got to get that down significantly because of how it impacts the company. And it’s about educating them and being a little bit more transparent. So my feeling is, I don’t know if you have to identify every little expense down to the nickels and dimes, but at the very least I would show some of the profitability and show how the company is doing. ⁓

Mike Goldman (28:05)

And

when you say profitability, so, and I’m going to take an extreme, and by extreme, I’ll use the example of a family business. And in a family business, you know, it’s closely held, you’ve got, unless they’re getting ready for sale and they’ve cleaned up their financials, there’s a whole lot of stuff that may be expensed into the business that wouldn’t normally be expensed.

into the business in a regular, in a non-family business. So when you’ve got a family business like that that says, well, I don’t want to share profitability because it’s inaccurate or because, and the thing I hear a lot is because if people knew how much money we were making, they’d want to raise and it’s nobody’s business how much money I’m putting in my pocket.

Ben MIlls (28:32)

Sure. Sure.

Mike Goldman (29:00)

How do you respond to that kind of pushback on it?

Ben MIlls (29:05)

Well, when we say family business, family business takes on a lot of different terms. I’ve seen family businesses that could be two or three family members running the whole business. So where I’ve seen family businesses that could be 70 % family in every role throughout the business between cousins, nieces, nephews. So that plays a role into it. But I have also seen where you can build financial metrics.

that don’t really include the family type expenses or other expenses that you could debate them. They’re more based on the gross profit of the business. So your sales guys are more just focused on the gross profit and what’s the pure gross profit of the business and attaining certain parameters. If you have a fear that people are gonna say, you’ve made a lot of money, I wanna get paid a lot more, I wanna get paid a lot more, I wouldn’t use that as a reason not to share with your…

core leadership team the numbers. Because if they’re key people that are helping you really drive and be successful in the business, you’re probably compensating them accordingly. And you’re probably giving them what they’re looking for. And I think in the long run, you’ll make more money if they’re part of the direction of the company and they have more buy-in. I think in the long run, you’ll do better and the company will be more successful.

But to your original point, I don’t know if there’s a right answer, but I think I have seen where companies will build a metrics, whether it be a contribution margin, whether it be a gross profit margin, there’s a calculation that they’re compensated on or they’re evaluated on. Because yes, you don’t want to get into office expense and you’re focused on the wrong stuff if you go down that road.

Mike Goldman (30:41)

But you want to be able to, to your point, want to be able to give them enough, especially on the leadership team, you want to be able to give them enough that they can think strategically about the business. if the head, go ahead.

Ben MIlls (30:49)

Exactly. they could, yep, exactly.

And they can see where you want to go and they can see their role and how they’re contributing to it. And if they don’t see that, I think it’s very hard to get their buy-in because then they’re just chasing a black hole of, don’t know really how I’m performing. I don’t really know how my decisions are impacting the bottom line. I don’t even know what the bottom line is. I don’t even know if I extend.

terms to a customer if that makes sense because I don’t know what that means on cash flow. I like to tell a lot of people what a lot of CFOs do is help bring financial clarity so you can make better decisions. I’ve had clients that will still sell product to a customer. They might lose money on the sale, but at least they know they’re losing the money, but they’re doing it for other reasons. And it’s more of a business decision, but it’s bringing financial clarity so they have an understanding when they make these business decisions.

And it’s not just your gut. It’s not just, I think I make money here or I think I do well here. It’s bringing financial clarity so they can make more informed decisions.

Mike Goldman (31:56)

Yeah. And to tie kind of the last two things we talked about together with financial clarity comes a responsibility to be financially competent and at least understand those numbers and how you can impact those numbers. And in fact, you know, one of the pushbacks that I always have for the CEOs that say, well, if, you people knew what our profit was, they’re all going to ask for more money.

Ben MIlls (32:09)

Yes.

Mike Goldman (32:23)

Most people in your organization, especially when you go beyond the senior leadership team, most people in the organization have no idea of the difference even between revenue, gross margin, and net profit. They’ve never learned that stuff. They actually believe that if the company is bringing in $30 million in revenue, then the owners are probably putting $20 million in their pocket.

Ben MIlls (32:36)

Right. Right. Right.

If not more. Right.

Mike Goldman (32:49)

Having no idea, if not more, having no idea that

if a company is net profit 10 % and that’s not even really cash flow because they may be investing back in the business, they probably think you’re pocketing more money. In my experiences, when people see what that net profit really is, they say, shit, I thought it was a lot more than that.

Ben MIlls (33:11)

Exactly, exactly. Or it’s a loss. Or it’s, I I was teach, I teach at a university up by me and I was teaching accounting to non accountants. It’s a required course. And I have to explain to the business students, whatever field you go in, whether you start your own coffee shop to whether you become a divisional head for a fortune 500 company, having a basic understanding of an income statement, a balance sheet and a cashflow will help you in your career.

⁓ And while I was teaching that class, I was teaching the same concepts to an owner of a business that runs tens of millions of dollars worth of business. I was teaching the same concepts. And I joked with them after at the end of the semester, I was going to give them the test that I gave the students in my class on cash first accrual and a balance sheet and an income statement. That I was going to give them the test, the same test, but you’re absolutely correct. It starts with financial literacy.

Mike Goldman (33:52)

Yeah

Ben MIlls (34:02)

But I, CFO, I mean, I’ve done it before. I’ll work with people in the accounts receivable department that are in charge of collections. And I walked them through the importance of the cash flow. That if we can take someone that pays in 60 days and reduce it to 45 days, I walked them through on what that means to the company as far as having to borrow the money or find another way to generate the cash to fund those 45 days.

And I try to do it at a level that they would understand in the accounts receivable department. And that’s being transparent to them, but it’s not necessarily giving them all the financial information, but it’s showing them how their piece in the organization plays a role in the success of the overall business and how they can play a role in that. And I think by listening to them, and it’s interesting, the people I was with yesterday, and I go back to being an effective leader is listening.

I was working with people in our accounts receivable department about how we can speed up collections, how we could speed up invoicing. And I said to them, I want to hear from you. You’ve been doing this job for 15 years. What do you think we could do better? I mean, I can walk in there and I can say, do X, Y, and Z, or I can say, what do you think we can do? You’ve been doing this job for a decade now. Where do you see there’s problems? And just listen to them. And maybe you can do some of them, maybe you can’t, but they feel empowered.

And then they start caring more. they, so when you do make changes, they feel they were part of those changes. They were part of the what’s going on. And I believe you’ll have much more of a success of implementing the change with follow through because these, a lot of the changes you’re coming up with are theirs. Are there, they’re telling you that if we did this, we did that and we, it would speed stuff up. You know what I mean? Um, as opposed to me just saying, and I might say the same things, but letting them come up with it on their own.

is so much more powerful than me just saying, do this. Because then it’s just another person barking out orders and they’re just going through the test. Right. And now they also understand how that plays a role in the success of the company overall. And it brings more to what their job is about. ⁓

Mike Goldman (36:02)

Yeah, now they own it and they feel like they’re having impact because they are. So that’s beautiful.

and

they’re much more willing to come up with the next idea and the next idea. So that’s great.

Ben MIlls (36:18)

Yes, yes. And that’s why

I always say it starts with listening.

Mike Goldman (36:23)

Yeah, yeah. Ben, you, you know, when we first got to know each other and for many years you were, you know, senior partner in an accounting firm and you ran, you ran that firm for many years and now, now your role is fractional CFO. Tell me a little bit more about the, the role of a fractional CFO and, and when should a company think about,

What are the situations where a company should be thinking, hey, a fractional CFO might be the right answer here?

Ben MIlls (36:54)

So what I do as a fractional CFO is I help bring financial clarity so business owners can make better decisions. it’s for organizations that either financially can’t afford a full-time CFO or they might not have a full need for a full-time CFO. But they do have a need for financial strategic planning for help on the cashflow modeling, forecasting that they don’t currently have within the organization.

As we mentioned earlier, a lot of companies have good bookkeepers or good controllers, but they’re spending all their time telling you what you did last week, last month, last year. Whereas what I spend more of my time doing is focused on what we’re going to do tomorrow to the future. So companies that I generally would say would be companies that are doing revenue of four to five million and up. But I also work with some startups and startups are very interesting because they can go from zero to

10 million in six months, depending on the industry and what they do. So startups often need a need because I find what a lot of non-business finance people don’t understand is businesses don’t go out of business because they don’t have revenue. Businesses go out of business when they don’t have cash. You can have all the revenue you want, but if the customers aren’t paying you for 180 days or 200 days, you can’t keep the lights on. You can’t pay your staff.

but, ⁓ so what happens with a lot of startups or small businesses, if they do start doing well, they’re not scaling at the proper time and mismanagement of their cashflow plays a big role in why they, they go out of business. so usually I started around the four to $5 million range, typically up to 50, $60 million in revenue. and it’s a different type of scope of work, but it’s basically helping them get their finances under control, getting it more timely.

A lot of business owners might not get their financial information for months after the period’s over. How many people are gonna, that listen to this or they get their financial information for 2025 in November when their accountant says, okay, let’s look at the year-end numbers for estimated taxes or for any tax payments that have been made. And they look at it and they’re, wow, if I had known this in June, I would have made changes.

I would have raised my prices, I would have adjusted here, would have cut, you know, so sometimes it’s getting the information more timely, more accurately so they can make decisions. And that’s what I enjoy doing, I’ve done a lot of that in my career and that’s why I left public accounting and I solely focus on this. So I’m not preparing tax returns, I’m not focused on historical information, it’s more forward looking strategic planning.

Mike Goldman (39:33)

And Ben, is it more kind of coming into a company and working on a project with them for some period of time, or is it more of an ongoing relationship?

Ben MIlls (39:42)

⁓

It’s more

of an ongoing relationship of sitting down with management. I usually do this at the beginning of the engagement of where we’re, where are we going? What do we want to do? What are some of the concerns you have? What are the challenges you have? And then we start tackling them. And sometimes it’s, just being the quarterback, bringing a lot of different departments together. I’ll give you an example. I was working with a large construction company that had bought, purchased years ago, a job costing software. Spent all this money on the software.

All the bells and whistles looks great, but they weren’t using it. Nobody had championed it. No one had populated with the information. The reports aren’t accurate because Mary, Bob, John, they’re not putting their stuff in. So it was never being used. And the owner and management was getting frustrated because they didn’t know if they were making money on jobs. So that was a project I worked on all summer or all winter, I should say. It was just being the quarterback, pulling all the leadership team together.

and getting it implemented so it’s up and running when they get busy in the spring. And now everything goes through that. All their billing, everything goes through that now. And they’re realizing that jobs can’t get missed now because people can’t get dispatched onto a job unless it goes through this system. So billing can’t get missed. Before, jobs could get done and people wouldn’t even know if a bill went out. And now it can’t get missed because everything’s going through this one system.

So it’s a lot of different roles, but typically they’re ongoing roles. And it could be anywhere from a day a month, a couple of days a month, know, various meetings with management, trying to keep them structured and online to the task of where they want to go.

Mike Goldman (41:20)

And Ben, if people are interested, want to find out more about you, more about the services you provide, where should people go?

Ben MIlls (41:29)

So my firm’s name is Cardigan Consulting LLC. You can look at my website, Cardigan Consulting LLC, or you can give me a call. number’s 845-863-6177. And it also can be found on LinkedIn and different social media platforms. And there’s no long-term commitment if you were to engage me. It’s purely a month-to-month engagement. And it could be on a project basis or…

the returns not there or the business is going in different direction, you’re not committed for any length of time. And all I’m trying to do is help business owners achieve their goals and bring financial clarity.

Mike Goldman (42:09)

Beautiful and this will be in the show notes but give us the website one more time.

Ben MIlls (42:14)

⁓ cardiganconsultingllc.com. Yeah.

Mike Goldman (42:17)

Beautiful, beautiful. Ben, this was great. I always say if you want a great company, you need a great leadership team. Ben, thanks for helping us get there today.

Ben MIlls (42:26)

Well, thanks so

much, Mike. I enjoyed being here. And I can’t believe it’s been 15 years, how fast that goes by since I first met you. But it’s great to see how things are going. thanks for having me on.

Mike Goldman (42:30)

I know.

Now thank you.