The role of the CFO in a successful turnaround can be more important than at any other time in the corporate life cycle. The CFO’s importance is based on the harsh realities of difficult financial circumstances. Severe external and internal pressures cause this time to be one of test and challenge. Successful turnaround CFOs know that their role is much broader and more creative than a mere hatchet man or super cost cutter. Instead, the organization requires that financial perspective be injected into every area of decision-making and strategy. Financial management tasks differ during the emergency, stabilization, and return-to-growth stages of the turnaround.
Once found mainly in federal contracts, bonding requirements have become more widespread and require significant financial discipline. Unlike a lender, which is concerned about a borrower’s overall financial stability, a bonding company focuses a company’s ability to perform on a specific job(s). The surety wants assurance that a job is on course with project estimates as to time, costs and estimated gross margin. In the short term, a surety will view a contractor’s job status schedule more importantly than the company’s overall financial statement.