Where’s my cash? CFOs manage cash flow with relationships and strategic planning
For many entrepreneurs, the early stages of their business growth can be stressful. Business owners must find new clients, keep an eye on new talent, train new people, and much more. On top of all of this, you keep asking yourself “Where on earth is my cash?” It’s an unfortunate truth that a profitable company can go out of business solely through poor cash management.
A part-time CFO running the cash management side of your business relies on a specific set of processes and standards to support you and your business. Our part-time CFOs advise a nine-week visibility plan to turn your frantic scrambling for cash into a calm and focused approach to your business.
The key benefits of this approach are listed below.
Managing Your Financial Relationships
An outsourced CFO can ensure that a strong relationship is formed with your financial institution, including keeping all accounts up-to-date, communicating with your bank, and discussing further services that would be of help to your company. When it comes to cash flows, they also examine every way to turn accounts receivable into cash as quickly as possible. Further, they work with your suppliers to not only ensure they are happy with the current situation, but also find creative ways to work with them and maximize everyone’s profits while keeping supplies managed.
Strategic Planning So You Can Focus
Everything starts with a meaningful conversation between you and your CFO at the outset of the relationship. This will allow the creation of specialized and tailored reports for your business that are delivered in a timely manner. Most external funding sources, including banks, require a number of reports to be prepared monthly.
An outsourced CFO also assists in either developing or improving your current cash flow plan. They connect your daily decisions to the projected cash flow, allowing you to immediately determine the efficacy of many of your strategic and operations decisions.
Hiring a part-time CFO means that you will have someone in place working at both a strategic and operations level to determine how best to manage your business. No longer will multiple managers undertake projects without someone overseeing the implications across all aspects of the company. This provides a real, and meaningful value added to your company.
Dealing with Problems as they Arise
When cash flow problems emerge, most businesses scramble trying to fix them. They focus on increasing sales, reducing costs, and much more. A CFO can examine the situation and determine the best options for solving the cash flow problem. Increasing sales is sometimes the best choice, but other times that option can exacerbate the problem if margins and collection of accounts receivable are not in line. Meaningful reports and advice on this very issue assist in providing you with the proper choice with how to respond to issues. It ensures your strategy is meaningful and direct.
CFOs Make All the Difference
There are many reasons a CFO can help ensure you are making the best decisions for managing your cash flow. Most growing companies cannot hire a full-time CFO, and that’s where we can provide a part-time, effective solution for your company.