Companies without a Chief Financial Officer are at a competitive disadvantage. It’s not unusual for small to mid-sized firms to have sophisticated operations and complex cost and financial challenges like large companies. This often means that the CEO or the owner of the business needs the expertise of a senior financial executive.
As an owner or CEO of a company, have you ever wondered how to solve the problems you’re facing?
Have you ever spoken with another owner and come to the conclusion that what you really need is the advice of a CFO . . . but knew that you either didn’t need a CFO on a full-time basis or couldn’t afford the cost of a full-time CFO?
Have you given up on finding the advice you need?
You are not alone. And, you are perhaps doing what many owners do . . . you try to figure it out yourself. Jerry Mills, Author of “The Danger Zone” describes this situation when a company’s “Finders” become “Minders”. As a result the Owners/Leaders do the wrong things or spend time and energy “In” the business rather than “On” the business.
ADVANTAGES OF OUTSOURCING CFOs
Better financial information for key decision-making.
It’s a fact: most small to mid-sized businesses either don’t prepare financial statements, or they are not reliable. Another fact: you simply cannot make important business decisions while relying on bad, inaccurate, or incomplete information. If you have found yourself frustrated with the lack of information from your bookkeeper or controller, chances are the information they are giving you is of questionable value. You cannot effectively run a business in that situation.
More time to spend with customers.
To be competitive, you need to spend most of your time with current and prospective customers. Particularly today, you need to be with your customers as much as possible. Just as you are trying to get new customers, your competitors are trying to meet with your customers.
More money from the bank and from vendors.
Bankers and vendors are more sophisticated than ever. With the current financial situation affecting all businesses, they are more skittish about lending to anyone other than the largest and safest companies. And they require timely and accurate financial statements. The financial statements must look professional, follow accepted accounting principles, and highlight the company’s key performance ratios.
Other advantages to having an outsourced CFO include:
A sounding board for the owner in making key decisions
Fewer cash flow surprises
Better trained accounting staff
Fewer surprises relating to tax payments
A theft deterrent
Better documentation and controls
Solutions to company problems
SOME THINGS TO CONSIDER
A CFO is a proactive professional – with 20-plus years of business experience. See that the CFO is supported by a national organization that has the resources to give your CFO the support that may be needed.
The best CFO may not be a CPA -A common misconception is that a CPA can take the place of a CFO. The simple reality is that a CPA cannot do the work a CFO does because each has a different set of skills.
Avoid Signing Contract – If an organization is not confident and competent enough to perform these services based on a hand-shake, consider walking away.
Ask that there be a monthly “ceiling” for the fees to be paid; there should never be any surprise on fees.
Finally, be sure that you are comfortable with the CFO. With a high level of trust between the owner and the CFO, the company will be in a better position to meet the challenges that it faces.
Companies without CFO’s can gain a significant competitive advantage and improve profitability by outsourcing a CFO on an as-needed basis. These days, it’s a wise investment, and can fit within the budget of most companies.