Sydneys virtual CFO sets a trend
David Thomas CA left a corporate career in the city for the surf, to turn around charities and credit unions, and is now striking out on his own as an outsourced CFO.
- Thomas left a multinational company to head up a credit union facing financial difficulty.
- He later joined Lifeline Northern Beaches, helping to make it financial and expand its services.
- Now David runs his own Virtual CFO company called Figure 8 Finance.
By Ben Hurley.
Leaving a job as Asia-Pacific financial controller of a multinational market research firm to head a failing credit union on Sydney’s northern beaches – that’s what you call a career change.
But three years later, having guided Northern Beaches Credit Union into the black and through a merger, chartered accountant and surfing fanatic David Thomas made another career change that was just as challenging. As CFO and then CEO of Lifeline Northern Beaches, he turned around a not-for-profit that was facing financial difficulties.
After a three-decade career managing diverse stakeholders, Thomas is now a year into running his own business – Figure 8 Finance – providing outsourced CFO services.
At the moment it’s a one-man show. Thomas has bigger aspirations after he sets the business foundations.
(Pictured: David Thomas)
The virtual CFO trend is relatively new to Australia but demand for these services appears to be growing. With technology helping to automate a range of functions, financial statements and tax returns are becoming increasingly commoditised, Thomas argues. Businesses want more than a bookkeeper, but small businesses can’t afford the advisory services of a full-time CFO. The virtual CFO fills this niche.
“When you talk about a chartered accountant, they are not just the numbers guy anymore, they are the business guy,” Thomas says. “A chartered accountant now is more of an adviser, telling you where you are right and wrong in budgeting and forecasting.”
The price of virtual CFOs make them more accessible to small and medium businesses, allowing them to focus on what they do best and keep their fixed costs down. Having a trusted advisor as a sounding board can help businesses avoid becoming another statistic. “When people hear about it they spark up,” Thomas says. “There is definitely a market for this type of thing.”
From global corporation to local credit union
The media and advertising industry is his “pet love”, Thomas says, and dealing with creatives who are “scared of numbers” taught him new communication skills. After getting his accounting degree from the University of New South Wales, Thomas took a job in Time Inc and rose to the position of financial controller faster than he could have imagined. About a week after he started, the financial controller who hired him didn’t return from lunch, he says.
“They walked down and said to me: ‘Do you want to do this job? It involves international gap tax analysis and you will be dealing with the New York Stock Exchange.’ I almost fell off my chair.”
After a range of other roles, including serving as APAC financial controller with British market research firm Kantar Millward Brown, Thomas says the travelling got to him and he took a much more local job at the Northern Beaches Credit Union (NBCU). He worked as chief financial officer for almost seven years, and at the same time studied for an MBA at the University of Technology Sydney.
He (David) had an open-door policy and was always happy to listen to new ideas. He really got the place moving along
He stepped into the role of CEO at the credit union in March 2013 at a time of intense business stress. The loyalty of members was wavering and the business was running at a loss. With Thomas at the helm, NBCU created a suite of new products, worked on improving staff culture and engagement and advertising on radio. He embedded the credit union deeper in the community with sponsorships of junior sports such as the local nippers and netball teams, while offering discounted junior accounts.
The business turned profitable within a year, and Thomas’s term saw record loan growth and a significant increase in junior accounts.
Paul Heffernan, senior branch manager at NBCU, still catches up with Thomas every year to watch a Big Bash at the SCG.
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“Dave was fantastic,” Heffernan says. “He had an open-door policy and was always happy to listen to new ideas. He really got the place moving along.”
After three years in the job, Community First Credit Union took the business over. Members got a wider suite of products. But with NBCU having just turned the corner, Thomas found the takeover a “bitter pill to swallow”.
“There’s a push from APRA to rid the financial landscape of the smaller credit unions as they represent a greater risk to the financial system,” Thomas says. “I don’t want to get involved in that debate, but I fought against that.”
A workforce that can leave
As part of his efforts to bring NBCU closer to the community, Thomas convinced the board to make a donation to Lifeline Northern Beaches. He wrote a cheque and followed up three months later to get some information in order to compile a report to the board about what the donation was achieving. Nobody answered, nor did anyone call him back or respond to his emails.
After days of trying he got through, and the person who answered apologised and explained the organisation was suddenly without a CEO and needed people on the board.
“As a fleeting comment I said ‘I’d be interested’,” Thomas says. “A week later I got a call, within two weeks I was on the board, a couple of months later I was Treasurer and after a couple of years I was running the place.”
In his first week he met with the volunteer staff and tried to talk the morale up a little by pointing out how lucky they were to be working so close to the beach. One of the volunteers then started quietly packing up his desk.
“He said: ‘You know Dave, what you are saying makes a lot of sense. I’m going down to the beach.’ He’s a volunteer, what could I do? I remember coming home thinking: ‘I don’t think I can do this job; this is a totally different skillset’.”
David is incredibly energetic and very diplomatic
Cheryl Walmsley, former chair of Lifeline Northern Beaches who still sits on the board, understands the challenges of dealing with volunteers.
“A volunteer can stand up at a moment’s notice and say ‘I’m going home now,” Walmsley says. “They have a commitment that’s unusual, in that they are highly committed but they don’t have to be there. So it’s different from managing employees.”
Walmsley said Thomas ultimately found his feet and did a terrific job in helping to turn the organisation around.
“David is incredibly energetic and very diplomatic,” Walmsley says. “But of course there is his financial side as well; you could say it’s a very safe pair of hands.”
He also had a knack for getting the media spotlight to shine his way. In April 2016, a month after he had taken the helm, he was being interviewed by the Manly Daily on why the charity needed to target under-18s. The suicide risk for youths was increasing as the intense pressure of the HSC combined with the pressure to post the perfect picture on social media, he said.
“Our emblem is an old phone,” he told the paper in an article that was also published in the Daily Telegraph. “We’ve got to get relevant to youth.”
The numbers that count
He fed the media numbers, too, such as the cent-exact cost of answering a Lifeline call – $27.96 – aiming to drum up attendance at the charity’s fundraising events.
Of course, the numbers that matter at a charity are different to those at a private company.
Lifeline Northern Beaches, an organisation of about 700 people, has increased the number of calls it takes per month to around 3,200, from 2,800 before Thomas joined. It also self-funds financial and gambling-related counselling after a losing a grant for this several years ago. Every call could potentially save a life.
But those numbers are on the back of a sharp eye for the bottom line, Thomas says.
“I can’t stand the term ‘not-for-profits’,” he notes. “It infers that a loss is acceptable. I think the term should be FPOs or for-purpose organisations. Whether they like it or not, charities are going to go through a period of consolidation and they have to be financial.
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“We had questions in the past and now we are solid as a rock. Our purpose is not to create a large balance sheet; it’s for a social purpose. But with a big balance sheet, we can provide better crisis support services.”
Having led two organisations through turnarounds and now selling his services as a virtual CFO, what are the finance skills that are most necessary today?
First is good communication skills. Dealing with creatives at media and advertising helps here, he says. They would glaze over when the numbers got too dense.
“If you can communicate with those guys, you are worth money,” Thomas says. “I’ve seen reports 60 pages long. I’m sitting on a board and I’m telling you no-one reads that. You have to make it relevant and communicate it on a level where people want to read it rather than feel they have to read it.”
Clear communication and approachability also helped him deal with the regulator at NBCU. “Don’t be afraid to argue your point, but don’t be an idiot about it,” Thomas says. “I’ve made that mistake a couple of times. Listen to people, work with them, not at them.”
And take risks and be prepared to fail sometimes. Says Thomas: “With good risk management frameworks and a good risk management philosophy, you will win more than you lose.”
Ben Hurley is an Australian business journalist now working from Taipei, Taiwan.