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The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
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Editor's Note: Take a look at our featured best practice, Comprehensive Guide to Financial Statement Analysis (89-slide PowerPoint presentation). This document provides a detailed step-by-step guide on how to analyse financial statements. Designed for anyone who wants to understand how to review financial data and interpret the findings, the document is split into the following sections: Introduction to financial statements 1. Income [read more]
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Every business owner dreams about growing their enterprise and, if possible, expanding faster. Unfortunately, newbie entrepreneurs must deal with many challenges when running business operations, particularly in areas concerned with finances. These tasks include filing taxes, tracking expenses, and creating budgets. As a result of these problems and inconveniences, leaders of small and medium-sized enterprises (SMEs) spend more time on the accounting or financial side of things rather than focusing on profit-generating tasks like product or service development, sales, and business growth strategies.
Companies may need to hire executives to achieve goals faster, such as a chief financial officer (CFO). But since many SMEs may not have the budget for hiring full-time business executives, they may want to consider getting fractional CFO services.
They are financial professionals who work in a part-time or consulting capacity. These financial experts are responsible for helping businesses develop and implement budgets and other financial plans. They also help companies track and report on business results, including analyzing financial statements.
Now that you know the role fractional CFOs play in business organizations, you may be wondering how they can help improve your bottom-line figures. Here are the top ways virtual CFO benefits accelerate business growth:
1. Provide Years Of Experience and High-Level Expertise
Getting the most reliable and experienced professionals is one of the surest ways to upscale your business and fuel growth. Unfortunately, as mentioned earlier, many small businesses don’t have the budget to hire highly experienced business leaders to work full-time. However, with fractional CFOs, you can benefit from their business acumen and proven track record of making decisions and solving problems for a more affordable fee.
Through their part-time engagement, fractional CFOs can offer you the right amount of time to assist your company in every facet of finance, including business planning, operational strategies, and accounting. Once you have ironed out the financial aspects of your company, your enterprise will be in a much better position to focus on growth and expansion.
2. Help Improve Vital Business Processes
A business should work like a well-oiled machine. If there are kinks and bumps in the operations, a company, regardless of size, will find it more challenging to grow and develop. Ensuring that your company has solid financial processes is one of the reasons why SMEs and family-owned enterprises need specialized CFO services.
Fractional CFOs can bring effectiveness, efficiency, and order to current processes and help design new ones to take business processes to the next level. They can even help SMEs with no formal digital records to adapt and maintain a strong management information system, which is a crucial requirement during the audit and inspection seasons. But if your company already has well-organized, documented, and defined processes, then a CFO consultant can work further to streamline your financial systems through automation and new tech. As a result, your company can attain better performance and be in a stronger position for growth.
3. Offer Insight and Assistance on Strategic Planning
Fractional CFOs who have gained financial expertise and diverse backgrounds through years of experience working in different industries can quickly provide insights into the conditions your business is going through. You’ll have an honest assessment of whether your business is on the path to success or still in the process of improvement.
Aside from providing insights into the financial situation of your business, part-time CFO consultants can also help you come up with an air-tight strategic plan for growth. A well-devised plan is crucial in forging your company’s path towards a bigger and brighter future. Furthermore, a good CFO can assist the business in attracting investors or finding ways to boost cash flow and assets to ensure that you’re in the best position to achieve your long-term growth goals.4
4. Build a Better Team
You can also rely on fractional CFOs to help you develop a highly skilled and robust in-house finance team. So, whether you’re in the nascent stages of your business or the process of expansion, you can rely on the services of a part-time chief financial officer to train employees, particularly those handling accounting and financial-related roles. A good CFO can also help identify individuals with leadership potential. With further training, such employees can become key assets to the success of your business.
5. Assist with Succession Planning
Some SMEs end up closing shop after decades of success because they lack clear succession planning. If you want your business to thrive and grow even when you’re in your twilight years, you should consider getting a fractional CFO to help you pass on the torch to your successors.
The key to achieving your growth objectives is to set your business up for success right from the start. By securing the services of a CFO, even in a fractional capacity, you are effectively positioning your enterprise to achieve your expansion and growth vision faster and more efficiently.
You can download in-depth presentations on Financial Analysis and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.
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