Small to mid-size companies gain big company insight with CFO expertise. Whether an organization is going through a growth spurt or growing pains, a part-time CFO can help develop strategic financial support for a variety of organizations.
As a small business owner, you know what it’s like to perform a juggling act. From sales and accounting to technology and marketing, you keep dozens of balls up in the air every day. Focusing on long term growth can be quite difficult while small business owners are faced with multiple tasks at once. More times than not, if the financial reporting task were given to someone who could also provide strategic financial guidance and planning, your business would be on the path to jump ahead of the competition.
CFOs play a vital to any business, but keeping a CFO as a salaried, full-time employee can be very difficult for some organizations. Small business, especially, may not have the financial resources to keep a CFO on staff at all times.
CFOs can help lead the charge when it comes to growing your company. Because your business strategies are deeply woven in with your financial strategies, you need CFO support for any and all of your growth initiatives: from the planning stages through to execution. Here’s what he/she can do:
1. Understand Market Opportunity
Your small business part-time CFO can help you to understand the competitive marketplace. Where are their market opportunities? How can you better leverage these opportunities? The key to success is taking the time to thoroughly understand the market landscape, which means investing in market research to analyze all aspects of the market.
2. Target Weaknesses
At the end of the day, numbers don’t lie. Sometimes it takes an objective eye to target those products that just aren’t producing or other business initiatives that are losing you money. A part-time CFO has the ability to offer you an objective read on your financial health. The expertise of a CFO can help guide you to invest in particular areas to give them the resources they need to thrive or where you need to cut your losses.
3. Budget Planning
Having a solid budget plan is essential to small business success, and without one, small business owners might find their business in the red. Outsourced CFOs can help develop workable budget plans to fit the business’s financial needs. They can help with monitoring spending and make any necessary adjustments accordingly.
CFOs understand financial needs and areas in your business that might require changes to limit financial risks. Business owners may not be aware that they’re spending too much money with a vendor when they can save on that cost by going with a local supplier. These little catches can add up over time and save your business a lot of money.
4. Facilitating Change
When a business is in a transition period, it’s valuable to have a part-time CFO overseeing the numbers to measure and assess long and short term business performance. If the business is in flux and finds itself in a negative cash-flow position, your outsourced CFO can quickly help you determine the key factors and take immediate action to correct.
5. Raising Business Capital
If you need to raise capital, a part-time CFO with the right experience can help you locate and talk to potential funders, develop your pitch deck and marketing materials. A potential new investor needs to have faith in the company through the CFO, and there is only one shot to get this right. A CFO can also help you with the business plan, projections, and tax issues. Finding access to funding is important when it’s time to scale your business, expand operations, launch a new product or service, or invest in a new joint venture.
6. Managing Risk and Fraud
There could be many potential threats to your business such as a cyber attack, fire or flood. Since your business is an asset it needs protection from any of these potential risks that may threaten its ongoing success. By bringing in a part-time CFO they have the knowledge to risk assessment and ensure you are investing wisely, have appropriate insurance and that your data is sensitive, and that your equipment and inventory are completely secure.
7. Operational Improvement and Strategic Planning
Your part-time CFO can help streamline accounting and financial reporting processes, helping owners, board members, investors, and the management team get a clear look at the financial health of the business. Some of the responsibilities of part-time CFO services include:
- short-term and long-term financial planning
- budgeting and forecasting
- risk and compliance
- operational improvements from ERP implementations to BPO implementations to SOX implementations.
8. Accurate Cash Flow Projections
Cash Flow complications are one of the top reasons small businesses fail. It is critical to understand cash flow and where your business is headed for survival. CFOs have the ability to provide accurate cash flow projections that are necessary for a growing business. They also will know how to help your business if you are experiencing a cash flow crisis.
A Helping Hand For As Long As You Need
There are numerous reasons your business might need to hire a part-time CFO including:
– To complete a short-term financial project
– To reassure private funders or bank loan officers that the company is fiscally responsible
– To get a company’s financial department up and running by creating accounting systems or writing company accounting policies
– To assist a business with the required documentation for filing federal or state taxes or for support during an audit
To help prepare for a merger, acquisition, or public offering. The CFO will perform due diligence — documentation of both a company’s financial health and the finances of any proposed partner or buyer.
Finding a qualified and competent virtual CFO nowadays is easy, depending on the skills and experience you need. Virtual CFO’s are not expensive. For the price of a good accountant, you will get the full services of a CFO.
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