The Outside CFO – Key to Financial Management

The Outside CFO – Key to Financial Management

Many entrepreneurs we talk to do not understand the types of service outside CFOs offer. For those of you wondering what an outside CFO can do for your business, we touch on some of the things an outside CFO brings to the table.

Your Financial Eyes and Ears

The CFO is your go to person for understanding and interpreting all accounting and financial matters related to your business. The CFO will help you keep focused on the financial aspects of the business, which is important for success. This free you up to focus on generating revenue and other aspects of your business..

Interpreting the Financial Statements

The CFO analyses and interprets the financial statements and explains them in a language the business owner can understand. There is a mountain of information in the financial statements and the CFO can breakdown this information so business owners can maximize their decision-making and ultimately improve profits and cash flows..

Cash Flow Management

Proper cash flow management is key to business success and survival. Profitable businesses have failed to survive because they ran out of cash. Your CFO will provide cash flow projections with at least a six-month time frame. Your CFO will also advise on ways to manage your existing cash and to find sources of cash in times of need. Having a cash reserve is necessary for businesses to stay afloat when things slow down. This is especially critical for smaller businesses which might not have access to lines of credit or other sources of debt and equity financing..

Identifying Key Performance Indicators

The CFO will help you identify and interpret key performance indicators for your business, and advise on how to utilize these indicators to maximize revenue and profits, and to improve operations.

Strategic Planning

The CFO is a great resource when it comes to planning for your business, helping you to write your strategic plan and to ensure it is properly implemented.

Budgeting and Forecasting

Budgeting and forecasting are essential for companies to understand their current position and to plan for the future. The CFO helps with creating the budget and forecasting the company’s likely future position. The CFO will adjust budgets and forecasts as situations change.

Mergers and Acquisitions

If you’re planning to buy or merge with another company, the CFO can review the transaction and advise you on the merits of the deal to help you make an optimal decision.

Customer Contract Review

Contracts can be complex, and while you probably want your legal team to lead on reviewing contracts, the CFO plays a vital role in assuring that the numbers in the contract will be beneficial to your company in the long run.

In Closing

Utilizing an outside CFO is a cost-effective way to to help you stay on top of the accounting and financial aspects of your business. Too often we see companies that are doing well in growing sales, but have no idea whether they’re making a profit, what’s the status of their cash flows, or whether their growth is sustainable. An outside CFO will help you get a more holistic view of your business, and help make your business more sustainable. Good financial management is essential for business success. If you do not already have a CFO guiding the financial aspects of your business, now is a good time to consider getting one.