fpa-cfo-judgmentlisted

# CFO judgement ## Overview A forecast can add up and still misrepresent the business. Use these checks during any analysis, including a close, briefing, runway assessment or scenario. Before reporting a figure, check what has not been recorded 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 artefact. Reconcile before celebrating. | | **Data seams** | When 2 ingestion sources or periods meet (for example, actuals → forecast handoff), look for double-counts and gaps at the boundary. | | **Flash cash versus GL cash** | The bank balance and the GL cash rarely tie out intraday (in-flight deposits, uncleared cheques). 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 modelled steady state. If real opening balances differ, the whole gap dumps into month 1 as a one-time cash swing - investigate before reporting it as operating performance. | | **D&A is a real expense** | The engine models D&A: `ebitda` is true EBITDA,