What Value Can a CFO Really Bring to My Business?

Does your company need a CFO? Would the expertise of a CFO make a difference in the way your business operates and grows? As small businesses grow into mid-sized businesses, their architecture changes. By adding a CFO (whether internal or outsourced) can have a big impact on your company in the long run. 

The difference is not only in the details but in the financial big picture of your company. Let's take a look at the value an experienced CFO can bring to your business.

 

CFOs Offer Preparation for Timely and Important Decisions

Business owners are often extremely busy with the day-to-day operations of a company and don't have time to stay on top of financial forecasts, capital acquisition, and cost control measures. A CFO can focus on these and other forward-thinking tasks so the company can stay financially nimble and prepared.

In many companies, the CFO produces and provides accurate and timely information on a regular basis so the business owner can make important decisions as economic, industry, regulatory, and social issues arise that could have an impact on the business. The CFO's ability to provide insights and accountability can help a business to take full advantage of opportunities and to avoid pitfalls.

 

CFOs Offer Specific Growth-Oriented Responsibilities

With a CFO on board, a growth-oriented business can focus on initiatives to achieve growth goals. In a small business, a CFO will be very hands-on with controlling growth and communicating financial results to shareholders and decision makers.

While it's true that a CFO has to spend some time looking backward - reporting finances and closing the books - it's extremely valuable to have the forward-looking capabilities that a CFO brings to the table. For instance, a CFO can be involved in the stratey formulation for the business so that your plans and actions align to your goals. Often the CFO will form a board of advice or perhaps will be on your statutory board. They help keep your business on track, moving toward potential and dealing with those big game changers like business buy and sell transactions, succession issues, capital and debt strategies and corporate governance. 

 

CFOs Offer Clarity and Focus for the CEO

The business owner or CEO is generally consumed with generating revenue during periods of growth. During these times, a CFO can step in and handle financial analysis, accounting and budgets, and other important needs such as accounts receivable, legal issues, banking, and real estate.

 

 

 

 When the CEO can put all of these issues into the capable hands of a CFO, the company can achieve balance. With duties divided, the CEO can focus on the big picture and the overall health of the company while the CFO watches and directs the financial systems that propel the company to greater heights.

 

CFOs and Risk Management

A CFO can also help your business to manage risk. Managing risk is more than just having adequate insurance - although this is an important area where a CFO can help. Managing risk is also about protecting your company from regulatory, environmental, and human capital risks.

 The CFO can pinpoint exactly where and how risk could affect the company's business plan. This helps the CEO make decisions about where to allocate resources and how to prioritise goals. CFOs can also develop models for evaluating a company's major investment decisions, thus minimising investment risk.

 

CFOs Can Offer Faster and Better Data

As your company grows and changes, your financial system needs to change, too. An experienced CFO will help you convert to a system that can accommodate bigger numbers, more sources and data points, and more sophisticated capital management systems. This allows you to get information “on time”. Faster. And Better quality.  With a CFO to oversee the development and maintenance of financial procedures and systems, your company will be able to continue to operate and expand at the same time without missing a regulatory beat.

A good CFO service should be able to work with you on a number of levels, so that you get the value you need for your situation. Consider the levels of value in the chart below.

Where are you? And what do you need? From a basic “peace of mind” level to genuine strategic input and innovation, a good CFO service should be able to adjust according to your needs. You may want to check out our complete eGuide “How to Decide if you need a CFO” for an in depth view on the things you know.

If you're not ready to hire a full-time CFO but feel that you need a CFO's expertise, you can outsource a CFO (part time) who can come in and provide effective financial leadership. The value added to your company from a CFO's guidance can be significant  - it can be the difference between stagnation and growth.