Winning Financial Practices
- December 10, 2019
- Latest News, Business Planning, Governance, Insight, Private Clubs, Strategic Planning, Strategy, Leadership, Finance
While directors carry ultimate responsibility for the financial resources of a club, it’s the relationship between the board of directors and club manager that can often determine just how well managed the finances actually are.
Bobby Crifasi, General Manager of New Orleans Country Club, reveals the formula which keeps his club on a sound, sustainable financial footing.
A mismanaged and uninformed approach to financial management can seriously damage a club’s ability to make sound business decisions.
And as the buck stops with the board of directors, it is they who must carefully measure the future financial needs of their club, plan for the sources and uses of funds, and ensure the economic sustainability of the club. Doing so is no small challenge and requires:
- A comprehensive capital asset replacement roster
- Maintaining a constant understanding of capital sources and use
- Command of the club’s balance sheet
- Sustaining engaged financial review and audit
As one of several duties, that can be a lot to ask of volunteer board members. This is where top-performing club managers step in. The more they can equip their board of directors with the information they need to fulfill their duties, the greater the guarantee of them making the soundest possible business decisions.
Bobby Crifasi manages New Orleans Country Club (NOCC) with style and grace that belies a savvy financial manager. First educated and trained as a certified public accountant, during his time Bobby has seen the Club through a natural disaster in Hurricane Katrina which led to $5 million in unplanned renovations. On a day-to-day basis, Bobby ensures that the Club remains on solid financial ground by keeping his board fully informed on the Club’s financial facts.
“All of our financial information is sent to the board in advance of the board meeting,” explains Crifasi. “I receive our financial reports by the 10th of each month and that allows a week or so to investigate any variances before the financial information is sent with the board package. If there was anything of significance that I thought the board should know sooner rather than later, I would report on it at the House Committee meeting or email the board directly.”
Keeping the board informed of financial performance metrics is a key for Crifasi and his team, “What we do is provide a lot of financial data comparing this-month to this-month-last-year and year-to-date-this-year to year-to-date-last-year comparatives on a monthly basis. We do good, old-fashioned spreadsheets with all this information monthly.”
Among the keys that are faithfully tracked at NOCC, Crifasi emphasizes the mission-critical factors in the balance sheet and income statements, “On a monthly basis we focus on key balance sheet items like cash, notes payable, and any other balance sheet items that may have changed significantly during the month. In addition, we look at our Statement of Income and Expenses and talk about any variances during the month and the factors that may have caused that. We track initiation fees and dues to ensure we are on budget with those as they represent such a large part of the financial picture.”
On a practical level, NOCC uses a rolling budget process to enable adjustments as conditions require, “We have a rolling budget for the food and beverage operation which is adjusted each month to reflect additions or deletions to the banquet business as well as current forecasts for our restaurant business.”
Given the significant impact of rising labor costs in private clubs, Crifasi adds, “We also look at labor in each department to ensure it is tracking as projected.” GGA observes that labor expenses are typically the largest category of expenses for facility operators, with benchmarks generally ranging from 52-58% of total expenses for public, semi-private, and resort facilities and slightly higher at 55-62% for private member clubs.
Astute financial management starts with the key information boards require to make sound decisions. Crifasi’s meticulous approach and proactive relationship with his board has helped to simplify an area that other managers can often find complex, providing a financial foundation for the long-term success and stability of NOCC.
If you want to follow in the footsteps of this top-performing manager, four-point approach to financial interaction with board members will provide an invaluable process to work from:
- Collect and analyze the key financial information
- Organize the financial details in ready-to-use formats that facilitate comparative analysis
- Back up the data with detailed department analysis
- Be ahead of the information curve