About Colin Wright

Colin Wright is the founder and CEO of The Virtual CFO Group Australia, a founding member of the Association of Virtual CFOs, and a member of CPA Australia. Colin authors the Virtual CFO blog to assist business owners and advisors with commentary, examples, and experiences.
18 06, 2020

Three Way Forecasting – managing your cash reserves

By |2020-06-18T12:04:03+10:0018 June 2020|

What is three-way forecasting and how is it performed? Colin Wright explains how understanding the future cash position of the business requires quality planning processes. This is achieved through the three-way forecast. As the name suggests, there are three components to this planning process. The profit & loss forecast determines expected cash flows from operational activities The balance sheet forecast determines expected cash flows based on the balance sheet movements of the business The cashflow forecast is determined from the profit & loss and balance sheet forecasts How well this process will forecast the cash position throughout the forecast [...]

6 04, 2020

Setting up your ‘Cash War Room’ to plan your crisis survival strategy

By |2020-06-18T11:19:41+10:006 April 2020|

Cash is the lifeblood of the business. Colin Wright explains how the business can manage liquidity through the 'Cash War Room' concept, and who should be involved in 'Cash War Room' activities. The Government has set up a War Cabinet to plan Australia’s response to the current pandemic crisis. Similarly, your business needs to set up a Cash War Room to plan your response to the unfolding crisis so that you can survive this period. The immediate risk to ongoing business is one of liquidity. Therefore, there are two key issues that all businesses need to focus on. Ensure [...]

3 04, 2020

Three phases of successfully negotiating the current pandemic

By |2020-04-06T22:17:49+10:003 April 2020|

This article explains how a business can use scenario planning and modelling to make it through the pandemic period successfully and become a stronger business on the other side. We face one of the biggest challenges to business since the Second World War. We all expect that the extreme disruption we're all dealing with could last for six months or even more. It's a fact that many businesses will not survive this period. There will be a mix of luck and natural selection that will determine which businesses survive and thrive. The luck element refers to the fact that [...]

14 03, 2020

More encompassing virtual CFO services with new ‘Executive’ package

By |2020-04-07T14:50:23+10:0014 March 2020|

Some companies need more than the usual level of assistance from a virtual CFO. This is why The Virtual CFO Group Australia has developed a specialised service offering. Colin Wright explains the 'Executive Virtual CFO' package - what it means, and when it's most needed. Our virtual CFO offering continues to develop in response to client needs. We have recently introduced our Executive Virtual CFO package as a result of these requests. The Standard Virtual CFO offering is targeted as a support package where the virtual CFO provides the planning framework for business performance targets. Along with the forecasting, [...]

26 11, 2018

Good business decisions are supported by accurate financial reports!

By |2020-04-04T00:49:59+10:0026 November 2018|

Accurate financial reports are essential for making key business decisions. How do you know if your financial reports are accurate? This article discusses the critical areas of business performance and how to ensure your metrics are meaningful. No doubt you rely on your financial reports for many of your key business decisions. Of course, there will be a range of metrics that you rely on to understand how the business is performing, but it is the financial reports that are your final arbiter of your business’s performance. Some of the critical performance areas you will want to know in [...]

20 11, 2018

The 3 BIGGEST REASONS why your monthly reports are MISLEADING you!

By |2020-04-04T00:43:43+10:0020 November 2018|

When a business relies on financial reporting for vital decision-making, it can be extremely concerning to learn that these financial reports are incorrect. Here are the three most common reasons for misleading financial reports. Our virtual CFOs have worked with numerous small and medium sized businesses over many years. Without exception the first few months tend to always the same. When we review their financial reports at the end of each month, it’s very common to find that their financial results are inconsistent. So we ask a range of questions about how their business is handling a number of [...]

7 08, 2018

The 8 BIGGEST MISTAKES made by small business owners – are YOU making any RIGHT NOW?

By |2020-03-24T11:44:17+10:007 August 2018|

When a small business is growing, visibility is key to managing profitability and ensuring that growth is sustainable. Too many small business owners start losing track of the true picture of performance once the size and complexity of the business increases - typically by the time turnover has reached $1M+. Is your business making any of these 8 BIGGEST MISTAKES RIGHT NOW? If your profits vary significantly from one month to the next and you are not clear why, you have little clarity on how you are actually performing If your accounts are not structured correctly you [...]

26 04, 2018

What margin should we target?

By |2020-03-26T07:10:40+10:0026 April 2018|

Over the years I have been asked this question on many occasions. The enquirer is looking for a number but the number depends on many factors. So the answer is to explore a range of principles that apply to these factors. Let’s look at this for both from the “gross profit margin” and the “net profit margin” perspectives. Gross profit margin The first issue to explore is how vertically integrated the business is. From procurement through production/delivery through to sales & marketing. What activities is the business responsible for and how complex are these activities? The growth phase the business [...]

19 04, 2018

Gross profit explained without numbers

By |2019-06-24T01:43:16+10:0019 April 2018|

How front of mind is the meaning of gross profit for most business managers. If asked to describe what gross profit is, they would invariably say it is sales revenue minus cost of sales. Of course that is correct, but what does it truly represent? For me, it represents a measure of customer value created by the business in the reporting period. Another way of describing this is that it is a measure of wealth created by the business. As such, it is the most important measure for the business to focus on. Why do businesses exist? In the [...]

5 04, 2018

Don’t assume when making assumptions

By |2019-06-24T01:56:51+10:005 April 2018|

Planning is one of the key drivers of success in business. We all know that a proactive management approach is critical for achieving successful outcomes. A key element of your business plan is the financial plan, or forecast. This is used for budgeting purposes. For a budget to be a valuable performance management tool it must be based on the drivers of financial performance. It must be constructed from the ground up. For example, your revenue forecast must include: The volume of sales in each products/services category Where will they be sold (markets) What channels will they be sold [...]