Whether your company is experiencing a significant growth spurt or dealing with a downturn in your business cycle, hiring a part-time CFO is an effective tactic to leverage the strategic financial and operational expertise they possess. There are many affordable and flexible options to secure part-time CFO services. Following are four ways to utilize CFO services to stabilize your business.
1. Improve Cash Flow
Generation of internal cash flow is the lifeblood of your company and should be the number one priority of any business regardless of size. Your part-time CFO will identify sustainable drivers of cash flow, increase the efficiency of working capital utilization (payables, receivables, inventory) and develop cash flow forecasts. The cash forecasts will provide a forward view of your business cycle, highlight the positive or negative impact of your operating activities and identify potential shortfalls well in advance so you can proactively develop strategies to maintain a healthy cash flow.
2. Instill Financial and Operational Structure
Experienced CFOs bring both financial and operational expertise to your business. They will perform an internal review of your business structure and activities and will implement strategies to lower costs, manage risk and enhance internal control measures. In addition, they will evaluate pricing strategies, margin contribution and overhead structure to improve profitability. The CFO will identify opportunities throughout the company with respect to the speed and quality of product/service delivery, selection and measurement of meaningful key performance indicators, and refining the infrastructure for operating efficiencies. An assessment of automated systems used to manage the business will be done to ensure timely and accurate information is available for internal decision making and external compliance reporting.
3. Executive Leadership
Your CFO will function as a sounding board for you and your management team, participate as an advisory board member and mentor key associates within your company. All constituencies will benefit from the CFO’s experience previously managing similar financial and operational challenges faced by your company, resulting in a healthier, competitive and profitable enterprise. The CFO will become the quarterback of managing your professional advisors to optimize the value they can add to your business. They will maintain a regular dialogue with your CPA, banker, legal and risk management advisors, keeping them informed of business results and exploring options for these advisors to provide value-added services. Most importantly, they will provide stability and peace of mind for all stakeholders of the business.
4. Strategic Advisor
The CFO will work with you to develop and clearly define the vision for your company and create strategies that result in mapping out a plan to execute the initiatives in order to achieve your long-term objectives. Included will be projections reflecting the human and fixed asset requirements, identification of capital requirements, funding sources and debt service, along with long-term balance sheet, income statement and cash flow projections. Your CFO will work collaboratively with your management team so everyone is well-informed about how they will contribute to the achievement of the long-term vision.
What part-time CFO services described above could stabilize your business?