Companies seeking capital need to plan and shop wisely. Not doing your homework or making the wrong choice may leave you empty handed, burdened with unnecessary costs or shackled with the wrong capital structure for years to come.

In Part 1 of this series on Treasury, Capital Planning, we wrote about capital planning for your business. The planning process will identify how much outside capital you expect to need in the coming years. The financial position, risk profile and objectives of the company will determine if that capital is in the form of debt or equity. This week we explain debt financing options and when you should consider them. Debt financing allows you to maintain ownership and control of your business while being less expensive than equity. In many countries interest payments on debt are deductible for tax purposes. 1

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CFOs and Business Leaders often focus on the incredible things AI (Artificial Intelligence) and Analytics can do—transforming decision-making, optimizing operations, and uncovering hidden insights. These advancements hold tremendous promise for finance and business leaders looking to enhance business performance including improved revenues, reduced costs, and mitigated risks. However, during a recent conversation with a group of CFOs, a senior CFO posed a critical question to me: WHERE CAN AI GO WRONG IN THE CFO FUNCTION? This inquiry sparked a discussion that led me to identify three key areas where Analytics (including AI) can present significant challenges for finance leaders in an organization.

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Capital is the lifeblood of any business. Paying for talent, equipment, marketing, inventory and other critical activities all require cash. Having a plan for securing capital well before the need arises is a key responsibility of a CFO. Without a funding strategy you may miss out on fleeting opportunities. Worse yet, even profitable, growing businesses fail because they run out of cash.

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Do you assess the market and business impact of your innovations?

Have they provided significant organic growth?

Have they contributed to both your top and bottom-line?

If your company’s performance gains from new product or service innovations are merely incremental you are likely approaching innovation from a problem-solving perspective:

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In Do You Know What the Income Trap Is? Joe Connors introduced us to a malady inflicting many business leaders, The Income Trap.

It’s a trap that occurs when a business spends too much time on the income statement at the expense of prudently managing the company’s financial reserves on the balance sheet. By comparing examples of companies like Enron and Amazon, and personal anecdotes, Joe illustrates how focusing solely on income can lead to financial instability.

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