Writing
Notes on financial management, reporting, audit and tax — longer answers to questions that come up in practice.
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Why do profitable companies run out of cash?
The income statement describes how the period went; the bank account shows when that performance turned into money. The gap between the two is where growing companies most often go wrong.
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Why a budget is not a spreadsheet exercise
A budget built from numbers falls silent when actuals diverge. A budget built from assumptions explains what changed, and why.
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Is the CFO’s job to prepare reports, or to build the decision system?
Reports are the most visible output of the finance function. Its real value lies in the structure that determines with what information, in what order and with what discipline management decides.
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What don’t financial statements tell us?
Financial statements describe a company’s economic position in a standard language. Knowing the limits of that language is the first condition for reading it well.
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How will AI change audit?
From samples to full populations, from checklists to judgement: what technology changes in audit may be less the speed of the work than its centre of gravity.
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Tax belongs at the start of a decision, not the end
Financing, pricing and structuring decisions are often made first, and their tax consequences calculated afterwards. Yet tax is a variable that can change the decision itself.
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What is a fractional CFO, and which companies need one?
A fractional CFO gives a company CFO-level financial management without a full-time hire. The value of the model is not the hours spent but the system that stays in the company afterwards.
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8 signs your company needs a CFO
The need for a CFO rarely shows up as a missing job title. It shows up as unanswered questions. When several of these signs appear together, the finance function needs to move from record-keeping to decision support.
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How do you build the finance function in a growing company?
A finance function does not mature on its own as a company grows. Recording, control, reporting and planning have to be built in the right order; otherwise every new report inherits the errors of the last.
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Why should the monthly close be fast and regular?
The monthly close is the clock of financial management. If numbers are not reliably available in the first week of the month, the report, the budget comparison and the decisions built on them are all delayed.
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What is a 13-week cash flow forecast, and how do you build one?
A 13-week cash flow shows the next quarter’s collections and payments week by week. Its value lies not in getting the forecast right but in comparing it with actuals every week and updating it.
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How do you manage working capital? The receivables, inventory and payables cycle
Working capital is where profit waits before it becomes cash. A few days’ change in receivable, inventory or payable periods can create a serious cash need in a growing company.
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What are the early-warning signs of a cash squeeze?
A cash crisis often looks sudden, but its signs are in the data weeks or even months earlier. A company that tracks them regularly sees the squeeze early enough to manage it.
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What is debt restructuring, and when does it come up?
Debt restructuring is renegotiating the maturity, interest, collateral or amount of existing debt to match a company’s real capacity to pay. Its success depends on the quality of the financial analysis done before the negotiation.
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How do you measure debt service capacity? DSCR and net debt/EBITDA
How much debt a company can carry depends less on the amount on its balance sheet than on how quickly, and how comfortably, the cash its business generates can repay it.
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Restructuring or liquidation? How do you compare them?
For a company in difficulty, the real question is whether carrying on or selling the assets to repay debt leaves more value for creditors and shareholders. It can only be answered by comparing both scenarios on the same assumptions.
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How do you prepare the financial plan for a concordat application?
A concordat is a financial commitment as much as a legal process. The plan’s credibility depends on a complete debt inventory, a cash projection that supports the payment schedule and a clear comparison with bankruptcy.
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How do you prepare an operational turnaround plan?
A turnaround plan is the roadmap a company follows to fix deteriorating profitability and cash generation for good. A good plan starts with diagnosis, focuses on a small number of measurable actions and is tracked weekly.
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Why does a five-year business plan need three linked statements?
A business plan built only on the income statement shows profit but hides how much cash and financing that profit requires. A model in which the income statement, balance sheet and cash flow are linked tests the plan’s consistency by itself.
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What is a rolling forecast, and does it replace the annual budget?
A rolling forecast brings actuals into the model every month and re-forecasts the remaining period with up-to-date information. It does not replace the budget; it makes visible the gap between what the budget says and where the company is actually heading.
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How do you carry out scenario and sensitivity analysis?
A plan built on a single number prepares for a future that will not happen. Scenario and sensitivity analysis show how dependent the plan is on each assumption and where the company will struggle if things go wrong.
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Which KPIs belong in a management report?
A good management report does not show a lot; it shows the right things, with the same definitions every month, in a comparable way. Choosing indicators starts with the decisions the company has to make.
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What are the differences between TFRS and BOBİ FRS?
TFRS and BOBİ FRS are the two main frameworks for preparing financial statements in Turkey. Which applies depends on the type of company, and the difference between them is not just the number of notes but how some transactions are measured and presented.
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How do you convert statutory books to TFRS?
Producing TFRS-compliant statements from books kept under tax law should not be a project rebuilt from scratch every year. Once adjustments are classified and documented, the conversion becomes repeatable, auditable and fast.
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What is deferred tax, and how is it calculated?
Deferred tax reflects in today’s financial statements how timing differences between accounting profit and taxable income will affect future tax payments. It is not a tax payment but a matching mechanism.
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What can e-ledger data reveal?
Turkey’s e-ledger contains all of a company’s accounting entries in a standard, machine-readable format. Examined with the right questions, it reveals inconsistencies and unusual transactions that sampling cannot see.
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How do you identify key control points in financial processes?
A process that tries to check every step slows down; a process that checks none notices errors only at month end. The real job is to find the points where an error would be most costly and place the control there.
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What makes a good audit working paper?
An audit working paper records the work done, the evidence obtained and the conclusion reached. A well-designed one is clear, standard and traceable enough for someone who did not do the work to see how the conclusion was reached.
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Why does accounting profit differ from taxable profit?
The profit on the income statement and the profit on which corporate tax is calculated are not the same. Tracking the items that create the gap during the year means the year-end tax bill is no surprise and the cash plan is built correctly.
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How do you calculate the total cost of an employee?
An employee costs the company more than the gross salary on the payslip, and there is a clear gap between that and the net pay the employee receives. Headcount plans and budgets should be built on a calculation that understands all three numbers.