We are often asked – “what is a CFO?” or “how can a CFO help my business?” A Chief Financial Officer (CFO) is an essential advisor to business owners and senior partners. CFO’s make sure that the business is in optimal financial health and that management is leveraging the company’s financial assets for business growth or profitability.
Lucrum Consulting offers businesses fractional CFO services. Businesses that don’t have a full-time CFO can still benefit from the strategic financial advice of a CFO without having one on the payroll. Lucrum often works with clients to ‘translate’ or implement CPA recommendations, improve banking relationships, optimize insurance coverage with respect to cost, and assist a client’s legal team with prudent business practices. The key in doing all of these tasks is that Lucrum does not serve as a CPA, insurance agent, banker, or lawyer.
A quick snapshot of the CFO’s role demonstrates that a CFO focuses on a company’s financial health as well as the overall industry projections. A CFO is driven by information, looking toward the future, and by business need.
Company focus – A good CFO takes a 360 degree look at the company from a financial perspective. They work closely with the CEO or President to reach financial goals based on the company’s mission. They work with the appropriate management team to develop product/service pricing, client and vendor contracts, and staffing. They are usually responsible for developing and managing relationships with banks and other financial institutions regarding loan consolidation and loan terms.
Information – CFOs use internal financial data and industry data to forecast future revenues, expenses and profits, develop budgets, and manage cash flow based on payables and receivables. The analysis of organized information reveals opportunities and any underlying problems that need addressing for the health of the company.
Future orientation – It takes an active day-to-day role to have a handle on current and future trends for revenues and profitability. CFOs take a ‘what if . . .’ approach to making financial decisions for the company. They consider what each decision will do for profitability and cash flow. For example, if a company wants a new piece of equipment to streamline processes, will it be better to lease or purchase? What are the costs and benefits for the equipment based on various assumptions?
Business need –The CFO considers all aspects of the company to position the business to compete in the market and grow. Staffing plays a critical role in a company’s profitability. Balancing present and future needs are essential because of the financial labor burden of taking on additional people. The CFO looks at staffing from a cost/benefit perspective to determine profitability by department, job function, or individual.
Lucrum Consulting’s clients are busy running their businesses. Having the services of a CFO adds business value in terms of time, management and profitability. To learn more about Lucrum’s part-time CFO services, please contact us.