Greetings fellow business owners and welcome to Your Portable CFO Blog!
As a business owner you wear many hats and perform several functions throughout the day. Customer orders, employees, vendors, shipment issues, you name it and you have to deal with it. Often there is little time to handle the other aspects of your business like the following:
- How is my company really doing?
- How do I compare to other firms in my industry?
- I have customers that aren’t paying me, what can I do?
- My company is rapidly growing but I seldom have enough cash in the checking account to pay bills and payroll, why?
- My vendors are threatening to put my company on COD, what are my options?
- Do I need to provide healthcare benefits to my workers?
- I need a bank loan, where do I begin?
- The bank turned me down, I don’t understand why?
- If I can’t get a bank loan what are my options?
- Do I really need an employee manual?
- Should I have a policies and procedures manual?
- What would happen to the company if I become sick or disabled?
- I want to grow my business, how do I do that and what will it take?
- At some point I want to exit the business, how do I do that?
These are just some of the questions and issues owners like yourself are faced with besides the typical problems stated earlier.
So what do you do? A Chief Financial Officer (CFO) would handle the issues above but to hire one would cost between $100,000 to $200,000. Plus, most micro to mid size companies do not need all of the functions they provide. The answer is to outsource this function to an outside firm. By doing this you can get help in the areas your company needs the most in immediately. As your company grows you can expand the level of support.
So, what are the functions of a CFO? They can be broken down into basically the following areas:
- Analytical ( the dreaded number and analysis game)
- Banking (am I with the right bank, commercial loan requests)
- Policies and Procedures (employee and operating)
- Strategy (growth, new business arenas, exit)
Some of you are probably thinking “isn’t that my accountants job?” Accountants primarily focus on the following:
- Gather your company’s financial data and present in a manner that conforms to Generally Accepted Accounting Procedures (GAAP).
- Tax Preparation and planning.
- Audit financial data for accuracy.
A CFO’s primary focus is to:
- gather a company’s financial results and provide owners/CEO’s with an action plan they can understand and implement to make their company more profitable and effective.
Working with a CFO whether on a full or part time basis will give you the sense of control that all aspects of your company’s operations are being covered while you attend to the daily operational requirements of the business. If you are feeling overwhelmed or a sense you are not in control of running your business you might want to consider hiring a part time CFO to help you get that feeling of security and control you currently aren’t experiencing.