What is a consultant CFO & how it can transform your business?
Functions of a CFO
The term CFO stands for Chief Financial Officer, and this management function is essential to the effective functioning of any mid-sized or larger business.
Of the many functions provided to management, the CFO’s role include at least the basics of:
Taking responsibility for the timely and accurate reporting of financial performance, condition, and cash flows of the business.
Making sure that all federal, provincial, and local governing regulations, laws, and taxes due are in compliance.
Assisting management in the development of operating strategies for improving the present, and planning for the future.
Designing and monitoring controls for the performance of business and internal operations of the business.
The Outsourced CFO advantage
Compromising on the quality of your financial operations, reporting, and performance management systems to save cost can never be a smart business choice.
However, if your in-house accountants have capacity constraints i.e., they lack skills, academic knowledge & professional expertise, you would need to engage a suitably qualified CFO to bridge this gap. Given the budgetary constraints of a mid-sized business, this could not always be a feasible option.
Hiring a full-time CFO is an expansive proposition. Besides most mid-size businesses do not have enough scope of work to justify a full-time CFO.
As a result, they either do not hire one, or settle for a lower quality resource which in-turn fails to deliver.
A part-time or consultant CFO is a smart alternative to hiring full-time.
Such an individual is usually a management consultant possessing world-class skills and works on contractual basis for multiple clients.
Engaging and working with a qualified consultant CFO, you can get higher quality financial advice, business planning support, and effective performance reporting by an expert whom your business could not possibly afford to hire full-time.
10 ways a Consultant CFO adds value to a business
Consider these 10 ways a Consultant CFO adds value to a business:
1. Cost savings on salaries, overheads and capital expenditure
On average, CFOs are expensive employees around the world. Paying a suitably experienced, full-time CFO’s salary could be difficult for a mid-sized business.
With an outsourced CFO service, besides massive savings on the monthly payroll cost, you don’t have to pay taxes or health and retirement benefits for your CFO. You would not need to provided the consultant with any work tools (computer, mobile phones etc.) or a motor vehicle. He/She would also not need a dedicated fancy office (which a full-time CFO would normally demand), happily operating out of a client’s meeting room or similar facility.
All this adds up to significant savings without a sacrifice in the quality of work.
2. An independent viewpoint
Consultants are valuable in most areas of business because they bring an experienced yet fresh viewpoint to bear on a company’s difficulties.
This helps solve problems that your in-house staff may be too close to, in order to see solutions.
3. Sound Financial Advice
When you don’t know how to increase profitability or secure your company’s financial condition, you need advice from a financial expert.
An outsourced CFO, being a world-class professional can provide the guidance and advice you seek.
4. Streamline Accounting & Performance Management Systems
Out-of-date processes and antiquated operational methods can greatly hinder the efficiency & effectiveness of any department or function.
A CFO consultant can help you quickly develop and streamline your processes to achieve efficiency in financial operations, enhance effectiveness of your performance management systems, and to generate a clear insight into you operations.
5. Accurate Financial Statements
If you don’t necessarily know the difference between a well-done, accurate financial statement and a sloppy one, or if financial reporting is just not your area of expertise, your business can benefit greatly from someone who really understands how to prepare and review these critical documents.
6. Financial Analysis and Consulting
Outsourced CFO services provide spot-on, high-level financial analysis of your cost and profits to help you plan strategies to deal with the financial problems or concerns you face.
7. Preparation of Financial Information
You need financial documents to show any potential investors or venture capital firms you approach.
With an outsourced CFO service, you’ll get expertly prepared financial information to help you attract investors.
CFO consultants who review your company’s balance sheet will help you find ways to bring your accounts payable & receivable up to date and to free up cash.
9. Fund Capital Improvements
Restructuring or effective cost-cutting strategies will free up capital which you can use to pay off any substantial debts your business may have or to use to advance your business through marketing or other avenues.
10. Set-up a Retirement Plan
If you’re like most people, setting up a complex retirement plan for your employees is a dauntingly impossible task.
For a Consultant CFO, it’s business as usual and a major responsibility removed from your plate.
Take the next step towards developing a truly world-class finance function for your business
Optimize your financial operations, enable effective business planning & analysis, implement sound financial controls and get clear insight into your business performance
For free consultation, contact ACS today!