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Sunday, 01 June 2014 22:11

West Michigan’s top CFOs discuss best practices

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(left to right) Denise Spaulding, Tom Cripps, Andy Winkel and Dave Staples (left to right) Denise Spaulding, Tom Cripps, Andy Winkel and Dave Staples PHOTO: Katy Batdorff

Despite sharing the same job title, and in many instances, similar functions, the recent winners of the MiBiz CFO of the Year Awards made one thing clear during a panel discussion: No two CFOs are alike.

The winners consisted of executives from a nonprofit aimed at helping children, a rapidly growing craft brewery, a public grocery chain that just went through a mega-merger and a small accounting firm.

A common theme throughout the discussion was the idea that the CFO now acts as much more than just a company’s numbers person. The modern CFO must have a grasp of finance and accounting, but must also be deeply involved in their respective firm’s operations, as well setting policies and processes.

“It definitely is a balancing act,” said Andy Winkel, CFO of Grand Rapids-based Founders Brewing Co. of his job of controlling finance and cost in a company with a philosophy of creativity and experimentation. “There seems to be some thought that the two are mutually exclusive. You can’t have processes and be creative at the same time. But we’ve learned … that is a very important part of the business.”

Winkel was the winner in the middle-market category. He was joined in the panel discussion by small business winner Tom Cripps of Hungerford Nichols CPAs + Advisors, Denise Spaulding of D.A. Blodgett - St. John’s who won the nonprofit category and corporation winner Dave Staples of SpartanNash Co.

The winners and four finalists were celebrated at a best practices and networking event held May 28 at the Goei Center in Grand Rapids. During a panel discussion, each CFO spoke at length about best practices they have put in place that have helped lead their respective companies to a position of financial strength. Here are some highlights from a panel discussion moderated by MiBiz Editor and Publisher Brian Edwards.

What are the two or three business metrics you pay attention to every day and why?

Spaulding: At D.A. Blodgett - St. Johns, we are all about children and families, so … part of my job as director of finance and CFO is to make sure that we have strong financials to support those children and families. So the things I look at on a day-to-day basis are our support programming and also our receivables. Are our contracts paying on time?

Winkel: Sell-rate is a big one we look at. That gives us insight into not only what products are moving and where they are moving, but it helps us forecast into the future. Then we can forecast some growth and how much capacity we will need in order to keep up with that growth. The other one: EBITDA. (earnings before interest, taxes, depreciation, amortization). It’s something that helps us keep track of how profitable we are and kind of benchmarks us against others in the industry.

How did Spartan assess risk in the large-scale merger with NashFinch Co.?

Staples: The deal we were doing was for stockholders, so the trading relationship between the two stocks is very important. … Speed is incredibly important, and when you’re on the NashFinch side of the deal, certainty of closure was very important. So speed and certainty were the two driving concepts behind this transaction. Going to the public markets would have been a very expensive avenue if what you’re going for is certainty of closure. Bridge financing and the fees you would pay for that probably would have cost us $10-20 million more. So speed and certainty were why we chose the (model we did). … We really had to get our banks to put their thinking caps on. We got them to structure this deal in a way that we got full value for our real estate. I think we broke a lot of new ground with this transaction. … There was no market risk involved in this.

What keeps you up at night?

Spaulding: For me, it is that something bad may happen to a child. So I need to be sure that we are supporting these kids. We are always working very hard to provide safety advocacy so that doesn’t happen.

Cripps: The West Michigan market is very saturated with accounting firms. I would say that our firm is high quality and we try to keep delivering that high quality product. With the fee pressures that we face on a daily basis, it’s not easy. So I would say that delivering a high quality product that is innovative for our clients. Those are two things that don’t keep me up all night but are definitely concerns.

Winkel: Ours would be trying to forecast future growth and future demand. We are in 32 states right now, and international (markets) as well. We have a pretty good idea of what those growth rates are. But as we expand into markets that are unfamiliar to us and to our beer, (the challenge is) trying to gauge what the interest level will be. Every time that we go into a new market, we always think we are being conservative and that we will have enough capacity, but lo and behold, that market loves the beer and they want more of it. … That planning for the future is always on our mind.

Read 5608 times Last modified on Tuesday, 10 June 2014 07:43

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