The average chief financial officer (CFO) in the US makes around $400,000 a year. However, having a c-suite level financial officer is invaluable for any business.
But, of course, hiring a full-time CFO is not financially feasible for small and medium-sized businesses. Fortunately, you can hire Propel CFO to provide fractional CFO services to maximize your business growth potential while saving money.
This article will begin by explaining CFO services, then discuss the benefits of using them for your business. Keep reading to learn more.
What Are Fractional CFO Services?
As a small business, you may not think you need a fractional CFO. But the reality is, you need CFO services now more than ever before. It is easier for a small company or startup with less capital to make financial mistakes than an established company with consistent cash flow and processes in place.
The truth is most small to midsized businesses don’t have someone who is financially savvy enough to monitor the company’s finances. There is a lot more to running a business than tracking spending and revenue.
Bookkeeping services are essential to any business, but the role of a CFO encompasses much more than this. A fractional CFO service offers several fractional CFO services that will analyze your business finances and help you reach all your long-term goals.
Business Strategy
CFO services will assist you with many aspects of creating a sound business strategy. Having a financial plan, both short and long-term, is one of the most crucial parts.
Usually, the CFO would analyze your finances to know precisely what you need to reach your goals. Then, they would create a financial and operational guide to meet these goals.
To create this guide, you need a strong understanding of your company’s capabilities, competitors, and industry. This understanding is not possible without extensive data and analysis.
The financial strategy also includes account and reporting systems. Internal accounting controls and regular financial reporting help keep the business on track. This way, you will be able to tackle economic challenges as they arise.
When an unexpected event happens, you can use the financial plan to re-strategize and make necessary changes. Additionally, if you currently don’t have strong accounting and reporting systems, CFO services can build them for you based on your company’s needs.
Cash Flow Management
Cash flow is more than increasing revenue. Of course, increasing revenue is ideal, but tracking a company’s spending is as important. CFO services will scrutinize your company’s expenses to see where you can make changes. Cost-cutting and budgeting are easy ways to increase cash flow.
Cost-cutting can include renegotiating vendor or client contracts and ensuring your pricing is in line with industry standards. CFO services may also analyze the supply chain management to see further where you can save money.
Furthermore, CFO services will assist you in raising capital. Raising capital is arguably the most stressful part of running a business. However, using a CFO service means you have access to their network of financiers.
To secure investors and funding, you need to have financial statements and reports for due diligence. This is something you will already have, thanks to the CFO service.
In addition, you need to understand the structure of your company’s capital. Knowing how much equity and debt you have is essential. To be successful, you need to ensure the capital is structured for what is best for your company.
Capital structure is not the same for every company.
Finally, it would help if you had the confidence, professionalism, and terminology to pitch the company to potential investors. Yet again, this is all handled by the CFO service company.
Raising capital is a great way to increase cash flow, but you’ll need solid financial expertise to succeed in doing so.
Risk and Tax Management
There is always going to be some risk when you run a business. But, especially when you want to scale your business, you will need to assess and take risks.
However, analyzing the risks before deciding can be the difference between a successful or an unsuccessful company.
Using detailed financial reports and industry data, you can take more considerable risks and be confident that they will pay off. You no longer have to make blind decisions and fear losing.
Of course, tax management is also essential to a growing business. Without tax compliance, you will face many challenges, which are not necessary.
Tax codes change frequently, and as you grow, your tax responsibilities will also change. CFO services will offer business tax preparation and planning. They may also provide tax services for your employees when they file their taxes.
This is especially useful for your employees when you also take advantage of CFO bookkeeping services. Your CFO service company will have all the data they need to ensure your company and everyone it is responsible for comply with the law.
Why Use Fractional CFO Services
First and foremost, you can get the expertise of a CFO without having to spend the money for a full-time CFO. Therefore, fractional CFO services are cost-effective but also reduce stress and save time.
You shouldn’t need to worry about the complexities of finances on top of running your company.
Second, you can see that using a fractional CFO service gives you access to several finance services that you may otherwise not have access to. These services will only help your business grow and be a leader in your industry.
With so much competition, you need to stand out by using data and analysis to further your goals. However, it can be almost impossible for you to do so independently without the financial knowledge and expertise needed.
Hire Your Fractional CFO Today
By now, it’s clear that using Fractional CFO services will be beneficial for your company. You can maximize your business goals and achieve the highest levels of success with their assistance.
If you’re ready to collaborate with a Fractional CFO service, contact us at Propel CFO today to get started. We offer a free consultation for those interested.