fpa-cfo-judgmentlisted

# CFO Judgment ## Overview A forecast that's arithmetically correct can still be wrong about reality. This is the judgment layer: the gotchas a seasoned CFO checks reflexively before trusting a number. Consult it during **any** analysis - close, briefing, runway, scenario. **Core principle:** Numbers lie by omission. Before reporting a figure, ask what's *not* in it yet. ## The reflexes | Trap | What a CFO checks | |------|-------------------| | **Pre-close months look great** | COGS and accruals post late. A high gross margin in a not-yet-closed month is usually unposted cost, not real profit. Exclude pre-close months from conclusions, or flag them loudly. | | **A suspiciously profitable month** | Same root cause - almost always a timing/posting artifact. Reconcile before celebrating. | | **Data seams** | When two ingestion sources or periods meet (e.g. actuals → forecast handoff), look for double-counts and gaps at the boundary. | | **Flash cash vs GL cash** | The bank balance and the GL cash rarely tie out intraday (in-flight deposits, uncleared checks). Know which one you're quoting. | | **Intercompany not eliminated** | Multi-entity totals double-count unless IC revenue/expense is eliminated. A "profitable" entity may just be billing its sibling. | | **Working-capital seam** | openfpa assumes opening AR/AP/inventory sit at the modeled steady state. If real opening balances differ, the whole gap dumps into month 1 as a one-time cash swing - investigate before reporti