Advantages of Hiring a CFO

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Advantages of Hiring a CFO

06 Sep, 2022
As a business owner, you are faced with many choices. If you’re in start-up mode, you are managing just about everything in your business - from bookkeeping to sales, from marketing to employee management, and more. With such a vast set of activities, the financial health of the business is often overlooked.  Your financial data must be current and accurate so you have the tools you need to make sound business decisions and implement healthy cash flow strategies. And as your business grows to include more customers, vendors, and employees, keeping track of your finances on your own becomes more challenging. Pretty much every business needs some form of a finance lead or a bookkeeper to maintain the financial records. While this could suffice in the early stages of business, you would need an experienced financial professional to review the numbers and map them with your strategic business goals and the company’s intended outcomes, from the financial point of view. CFO brings financial visibility into your business so you can make smarter business decisions and leverage opportunities as they come. Financial visibility means having accurate, timely, relevant, and insightful information which in turn helps in:
  • Better cash flow control
  • Increased operational efficiency
  • Sustainable business growth
While all of the above are crucial for the long-term success of any business, small or mid-sized businesses may not have the financial resources or the business need to hire a CFO on their payroll. Hiring a fractional or virtual CFO can prove beneficial here.  Hiring a CFO has a lot of advantages. Let’s discuss them one by one.
  • Cash Flow Management 
Cash is the lifeblood of every business, especially small businesses, and early-stage startups. Cash flow must be monitored proactively and planned thoroughly to avoid a cash crunch scenario. An experienced fractional CFO can help with an accurate cash flow forecast for working capital - both in the short and long term. A virtual CFO offers cash flow management advisory services and helps limit expenditure ensuring that the business maintains its financial health.
  • Prepare Budget & Financial Forecast
The majority of business owners are busy running their day-to-day operations which may shift the focus away from the financial health of the organization. This in turn impacts the business readiness for long-term objectives and strategies.  The experienced CFO will examine your company's financials in detail while you focus on running your core business operations, identifying pain points, and undertaking course corrections as required.  At CJCPA, we offer business consulting and valuation services and develop data-driven plans that can help your business gain a competitive advantage. 
  • Structure for Sustainable Growth 
For early-stage start-ups agility through ad hoc communication and shared responsibilities seem like the most effective way of work. While this close collaboration between core members would work in the immediate term, it will become counterproductive when the business operations and the team starts to expand. At this point, you will need a better structure to streamline both accountability and responsibilities for smooth business operations.  A CFO can help you understand the pros and cons of different organizational structures for better staff supervision and direction while being cost conscious. CFO services can help build a strong foundation to adapt to business conditions.
  • Reduce Risks
All firms are susceptible to risks like bankruptcy, market downturns, lower profitability, and unpredictability, regardless of their industry and size. Each of these elements has a significant impact on the financial stability of your business. Your CFO will assist in developing plans to manage your business risks comprehensively and proactively. You need to safeguard your firm from the unexpected - ranging from insurance to business succession planning.
  • Boost Your Profit
A professional CFO, such as CJCPA, assists you in setting financial and profit benchmarks using industry norms and averages. CFO can help bring efficiency to business operations by reducing avoidable expenses thereby improving profitability and ensuring sustainable business growth.
  • Expert Eye
It could be difficult for you to take a step back and consider everything objectively at times when you are mired in the day-to-day operations of your business. CFOs serve as a sounding board for financially viable business choices that may have an influence on long-term business growth. A competent CFO has knowledge of and insight into the opportunities and problems faced by diverse industries. They can therefore offer a different perspective and expertise to optimize a business’s operational expenses. Partner With CJCPA  Searching for a CFO that fits your culture and has experience in the relevant industries? Look no further.  At CJCPA, our business plan experts provide assistance to grow your business tracking and managing industry-specific challenges. For more information, schedule a 30 min free consultation call with our professionals. Drop us a line at jas@cjcpa.ca  
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