As a business owner, you may be unsure if a chief financial officer (CFO) is a good fit for your organization. You’ve probably been doing your own financial work for a while, or maybe a few people in your company are splitting this job. Now you might feel that it’s time to free up valuable energy for other tasks that can help you grow your business. So, what does a CFO do for your company?
A CFO can help support your financial and business goals, enabling a new level of growth and success. For some companies, hiring a full-time chief financial officer is the most cost-effective option to meet their needs.
For many other businesses, however, a smaller commitment makes more sense. Contracting an outsourced CFO is often the perfect next step for companies who need part-time support in this area.
Whether you hire full-time or part-time, delegating financial tasks that you’ve been responsible for can be challenging. Figuring out what you can hand off and how to follow through might be overwhelming at first.
What exactly can a CFO do for your business? What can you push onto their plate? There are a lot of tasks that a chief financial officer can help you accomplish. Your company’s needs will help dictate which roles you hand over to this person.
Here are some of the primary CFO duties that businesses often need help with, especially as they grow.
Expense and income data and their subsequent analysis support you in making business decisions that lead to greater growth and success. Without this critical information, it is impossible to know what is working for your company’s finances and what needs to change.
A CFO can set up systems to monitor and report income, expenses, assets, liabilities, and cash flow. They will also work with your bookkeeper to pull data and ensure everything is in order.
They offer comparisons of past years to the current year to help support decision-making for the organization. With rapid changes in our economy, this accurate and detailed data is crucial for planning and growth.
The chief financial officer is generally responsible for compiling financial data to present to the CEO and other C-suite company executives to use in analysis and strategic planning.
With the budget in hand, they also can facilitate discussions between departments or different areas within your business. For example, production might need a new piece of equipment, while marketing is asking for more money to support the launch of a new product.
How do you balance these requests? Your CFO can help you make strategic decisions based on accurate data about your business’ financials. In many cases, they also help lead these conversations with various stakeholders and department heads.
Entrepreneurs are often, by nature, big thinkers and dreamers. They are ready to take bold action and may leap before they look. While there is a place for this mentality, especially when you first establish your business, there is also a place for caution and strategy.
Every business should consistently examine what is working and what changes they might need to make. A CFO can guide and support your financial goal setting and strategy by working with the data.
Using past and current financial performance as a starting point, you and your CFO can set appropriate goals for your business. They will help you develop your key performance indicators (KPIs) and establish a plan to meet those aspirations.
Some goals that a CFO can help you achieve include:
Making decisions in the now that strategically support your future goals and plans is critical to your long-term success. This level of support is precisely what a CFO can do for your company. They help you align your financials with your goals and objectives and give you a high-level view of your business that guides you in crafting a sound strategy.
Beyond looking at the past and current financials, a CFO can also help you look into the future. It’s almost like having a crystal ball, but with data instead of swirling smoke.
Knowing what to expect for income and expenses is a significant part of your planning and goal-setting. It’s also critical information as you get ready for your tax preparation each year.
For example, is your company likely to have a cash surplus in the coming months? That information will factor into your goal setting and tax strategy. Is there a large piece of equipment that is on its last legs? A CFO will include that information in their recommendations and reports so that you are ready to purchase a new one when needed.
Cash flow issues can be financial life or death for a company. The support of a CFO who regularly analyzes your reports can save you significant money and stress. They may even help save your business.
Growth and scalability often require additional sources of funding in addition to your current revenue. Launching an exciting new product, expanding your business, or bringing on new employees may require the help of investors.
Investors want to understand where their money will go and what purpose it will serve. You are asking them to support your ideas with their money, so you must have current and accurate data to present to them.
A CFO plays an essential role in communicating the plan for this influx of cash. They will have charts and reports for you that point back to a big excel sheet called a financial model, as well. Presenting a concise and straightforward plan with financial data to support your ideas and goals will lead to greater success with investors.
How do you find and connect with potential investors? A chief financial officer can support you in these efforts, too. They may have ideas and connections to help you find people or groups that are the best fit for what you want to do. Your chief financial officer can help you identify your ideal investor, saving you valuable time and effort in finding suitable sources.
These financial tasks are never one-and-done. Instead, they are ongoing jobs that require vigilance and accuracy. Your needs and goals will shift as your company’s financial situation changes. A CFO ensures that you can adjust and grow amid market and industry movement.
Having consistent, up-to-date financial data from an outsourced chief financial officer will support your business as it grows and reaches new heights. Schedule a free consultation today to learn more about how our Fisher Bookkeeping CFO can help your efforts.
Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).