Budget Improvements
Do you have a budget? If your company is small enough you may not go through the process of creating and updating a budget regularly. This is not a strategy for long-term success or growth, however. Someone with CFO experience can help you create an effective budget process for your company.
Having a budget helps when you need to compare one quarter (or year) to another. It makes it easier to spot variances that may require leadership attention. It is the first step to improving forecasting and models for growth for your company as well.
Budgeting discussions can be challenging because they may feel personal if there has not been a formalized budget in the past. It is often helpful to have an outside voice to moderate this process.
Integrate Strategies
An outsourced CFO can integrate your financial and operational strategies to make sure they’re aligned. They can help you create dashboards that track your most important KPIs. From a business modeling standpoint they can help you create 1-, 3-, and 5-year operating plans with P&Ls, balance sheets, and cash flows. They’ll be able to create sensitivity analysis as well to show you how your plans could be impacted by internal or external factors.
Identify and Mitigate Risk
Do you know what the biggest risks are to your company? This information falls under the purview of a full-time CFO. However, a fractional CFO can give you a strong analysis of the potential risks you face in many areas; from general business risks around markets, the economy, your capital, and your ownership to risks specific to your company, like your credit, liquidity, operations, security, and fraud.
Improve Internal Controls
Having good processes is one key to reducing risk for a company. If your internal controls are not codified and universally followed there is room for improvement—and it doesn’t take a good professional long to help implement these. A Controller or CFO can help analyze your separation of duties and approval processes, determine who should have what level of access to information, and standardize your documentation. These easy wins can go a long way to strengthening your accounting department.
Empower Your People
Your people are likely one of your most precious assets. Turnover is expensive and hiring can be hard. Outside help is a good way to support your staff in a thoughtful way. A CFO working as an extension of your accounting team can mentor your Controller so they can grow and be more valuable to you. On the other side, a professional Controller can help a small accounting department develop best practices and work most efficiently.
If you want to look beyond just your accounting team, human capital consulting can help evaluate whether you have the right tools in place to help all your people be most successful and whether all the work is distributed in the most efficient manner. Oftentimes a big win can come in the form of software solutions that automate processes and free up people to think and act more strategically.
Evaluate Partnership
Are the business relationships you have with your bank, insurers, legal counsel, and other professional services working as well as they can for your company? Evaluating these relationships—especially if they’re longstanding—is difficult if you don’t have much basis for comparison.
As a knowledgeable and independent third party, an outsourced CFO is well-positioned to analyze relationships and make recommendations.
They can give a professional nudge to partners who may need one, without offending them by explaining that the partner will also benefit by upgrading their service to you. If it is necessary to find new partners, someone who has experience as a CFO will have connections that you can tap into.
Be Ready for A Downturn
Economic uncertainty seems to be an ever-present fact of modern life. Is your company ready to ride out (or even take advantage of) such a situation? Here, outside experts can help you with risk-reduction tactics, identifying cost-saving measures, and opportunistic strategy shifts. One thing they’ll do is help you fortify your balance sheet, with a focus on maintaining adequate liquidity. Leveraging expertise in this way now is a good insurance policy against economic unknowns.