When accounting is working properly, it is time to invest in the Chief Financial Officer (CFO), assuming you want to increase your business growth and start strategizing around your finances.
In today’s business environment, even small and medium-sized enterprises need CFO expertise that once only some large corporations could have afforded.
By outsourcing the financial function of your business through the engagement of a virtual CFO, you gain access to qualified financial professionals with the knowledge and skills that will guide you in achieving your vision and goals. The Virtual CFO provides assistance in business modeling and strategic leadership, and is concerned with advanced financial analyzes and asset valuations.
- Traditional role
▰Forecasting Cash Flows: helping your sstrategic team understand how the decisions you are making today will impact cash flows in the future.
▰Comparison of “budgeted” vs. “actual”: when a plan is in place, you want to know how well it is being implemented.
▰Break-Even Analysis: Your production and sales teams need to know which minimum sales plan should be made to keep the business at zero.
▰Personnel Cost Management: If your business relies heavily on your workforce, you need to know your staff costs, whether your staff is effective, whether your staff is too busy or your firm is inadequately staffed.
▰Reporting on Fixed and Variable Costs: Not all costs are incur in the same way. Some costs are fixed and they exist regardless of the level of your business activities. These costs can be reduced, but not significantly. However, the costs that can be better controlled are the variable costs that increase with business activity. The CFO is an expert in identifying such costs and monitoring them.
▰Planning and Debt Reduction: If debt is a part of your firm’s growth strategy, your CFO will help you optimize your debt liabilities to support you in your goals.
▰Design and development of internal aaccounting systems: the possibility of introducing an online paperless bookkeeping.
- Strategic role
▰Catalyst: CFO promotes changes that will contribute to strategy implementation and give support to the company’s strategic leadership.
▰Formulation of the strategy: assessment of the entry into the new market, risk analysis and synergetic effects of mergers and acquisitions, proposing new types of revenues, changes in the financing model.
▰Manage transaction mergers and acquisitions: from “due diligence” to post-transaction integration, taking into account the risks associated with financial reporting, tax and other risks.
▰Introducing modern ERP systems
▰Calculate EVA: application of Economic Value Added (EVA) as a performance measure in your company in order to improve performance
