CFO stands for Chief Financial Officer, who acts as a professional advisor to the company’s owner or their Chief Executive Officer (CEO). CFOs are suitable professionals with experience handling the finance department and navigating businesses toward growth. Since they have extensive knowledge of finance, budgeting, market trends, and business strategies, they tend to be expensive. If you are a startup or have just established your business and cannot afford to hire a full-time CFO for your business needs, you can opt for a retainer basis. This means you can work with them on a part-time basis to fulfill all the required needs.
So if you want growth, sustainability, stability, and success in your business, hire a fractional CFO who has about 10 or more years of experience. You can also consult a CPA in Richardson, TX to help you. But how does a CFO turn around your business finances? Let’s dive deep into this subject.
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What’s a CFO?
A Chief Financial Officer is the highest-ranking professional in the finance department who usually heads and controls the entire team with their guidance, knowledge, and insights. They are primarily responsible for managing the fiscal health of the company. A CFO builds top-notch accounting and finance teams, keeps expenses and revenue in balance, oversees financial analysis and planning, makes mergers and acquisitions happen, crafts budgets, and analyzes economic data and reports. Their roles and responsibilities are not limited to monetary and accounting activities, as they guide CEOs and boards of directors in making important business decisions for the future wealth of the company.
A CFO helps direct useful technologies in a business or for substantial operations and makes recommendations on everything, for instance, supply chains, vendors, marketing, and the number of staffed members. They are called talented visionaries who can look beyond the present business days and help you strategize toward industry leadership.
How Does a CFO Help Businesses?
Short-term & Long-term Planning: Without set goals and plans, you and your business can incur additional expenses, costing your business money and time. That’s why it’s advised to plan regarding investment, integrated systems, and other vital activities of a company. A CFO is knowledgeable and guides you using your company’s history of finances and performance to plan accordingly, whether for short or long durations.
Proper Financial Foundation: If your loans, assets, investments, funding allocation, returns, and revenue are not distributed and managed accordingly, your finances will be in chaos. Your hired CFO will guide and provide insights on how you can effectively manage all the liquidity and liabilities of a company. This alone will make your financial foundation rigid and strong.
Manage Growth & Funding: Every business and startup wants to grow at a speedy pace, but without an established rooted system, maintained records, and compliant rules, you are likely to face financial discrepancies in the near future. A CFO, as known, is a financial expert; they know what should be done or followed for business growth. For instance, if you want to grow another branch in a state or local area, a CFO will help you strategize your finances and operations sensibly for profitability. They can help you merge with and take over another successful organization, checking all the crucial financial aspects and factors. Moreover, they can guide you with loans and investments.
Provide Audit Support: An audit can put a business in the spotlight; a CFO can assist you through this process. They can head the audit and be directly answerable for all the questions the auditor may ask. Having an expert on your side helps the audit go smoothly without any issues. A CFO is a well-versed, valuable asset to your company, directing it toward growth.