Things a Part-Time CFO Can Do For Your Company
If you are still a growing company with a yearly revenue that does not scratch the $10-million mark, it is completely understandable that you cannot afford a full-time CFO, whose annual salary may be something close to $150,000. But that does not mean that you can do without a CFO. If you want to continue to grow as an organization, there is a need for you to rely on the services of a CFO. But since you cannot hire a full-time CFO with the revenue your company is making, you might want to consider hiring a part-timer instead.
While part-time CFOs are more affordable, they do still have a lot of benefits to offer to your organization. Here are some of them:
You will understand your business more
It’s going to be a bit odd to say that you, as the entrepreneur or the CEO of your own company, do not fully understand your own business. However, that really isn’t something too uncommon because there are issues and problems that not even the CEO knows. When you are wondering why your company is not as profitable as you might have expected it to be, there certainly are issues that you do not know of and cannot spot. This is where the CFO comes in.
Part-time CFOs can look at your financial statements and study your company’s environment to assess whether or not there are problems and issues plaguing the organization. He has the financial expertise and experience to know how to spot things you might have overlooked as a CEO. So, if you want to know if some issues are hampering your profits, hiring a CFO can help you spot them.
Know how much you need to make to break even
Breakeven points are some of the more important things you need to know if you want to run a successful business. However, it can be pretty hard to track where you are going to break even depending on the financial status of the market and on how your organization is doing well in in relation to its competitors in the industry.
Hiring a part-time CFO can allow you to know your company’s breakeven points based on a formula or a method that only they can effectively and efficiently use. CFOs can also help you track your breakeven points on a periodic basis so that you would know your target sales or revenue to make sure your company is making a profit.
Help improve cash flows
Cash flow management is important to a growing business that does not always have enough cash reserved for certain daily activities. This can lead to poor profits on your part because of how some of your daily operations are hampered by your lack of funding. In some cases, some companies resort to taking out loans from banks only to be later on hampered by interest payments.
In such a case, it might be better for you to go hire a part-time CFO because of how he is an expert in cash flow management. Some CFOs usually try to narrow the gap between your receivables and payables as much as possible to make sure you have enough cash you can use for your operations. Regardless of what techniques and methods part-time CFOs use to improve your cash flows, you can be sure that he will be able to help you get enough available cash so that your daily tasks won’t get hampered by your lack of available funds.
Set up a reliable financial system
Usually, small and growing companies do not have a reliable financial system they can use to track their finances effectively and accurately. This may lead to poor financial assessments and even losses on the part of the company due to how their systems used is not up to par with what the entire organization requires. At times, the system used by the accounting department might even be different from that of the one used by the CEO and all of the other executives.
Hiring a part-time CFO can help remedy this. CFOs can assess your company, look at your finances, and then recommend a reliable financial system you can use to track your finances better. He can also be there on a part-time basis to train your employees and to help implement the system so that your accounting or finance team can do without a CFO whenever they are using the system to help keep an eye on your finances.