Companies offering CFO consulting services have a major responsibility of handling the financial management of their client company. They also need to ensure that it yields a high Return on Investment.
Though extremely important, enterprises with a smaller capital might find it difficult to hire one for their company. Hence, it is beneficial for startups and small businesses to outsource them instead of creating an in-house team.
Roles and Responsibilities of the CFO
The roles and responsibilities of CFO consulting services have drastically evolved in the past few years. Their traditional roles encompassed accounting, documentation of finances and compliance monitoring. However, today’s CFOs devise strategies after monitoring their resources and competitive positioning to steer the organisation in the right direction.
The CFOs are expected to have key skills such as:
- Leader
- Operators
- Catalysts
- Strategy
Services CFOs Offer
Startups have a major advantage over their competitors. As they have a small management team, decision making is rather swift. However, very few leaders will possess the skills needed to take the company in the right direction. Hence, outsourcing CFO consulting services will be advantageous as it can streamline financial strategies and allocate the resources in the right channels. Their expertise lies in:
- Optimising cash flow
- Devising strategies aligned with business goals
- Scalable infrastructure
- Data-driven approach
- Cost-control management
- Funding
- Locating new means of acquiring capital
- Maintaining investor relations
- Identifying lending institutions
- Forecasting
- Reducing the burden of corporate tax
- Revenue Litigation
Traits That CFOs Must Posses
To be a successful CFO, you must have proficiency in management, operations and finance. However, that is not all! You are expected to possess leadership skills and engage in collaborative relationships with other departments to achieve shared goals. Furthermore, they must act as business partners and attempt to solve the financial challenges that the company may be experiencing.
Why is a CFO Necessary for Your Startup?
CFO consulting services are necessary for your startup as they can mitigate the risks that you might be experiencing. They classify them into:
A. Strategic- It is a type of risk that might occur due to a futile business decision. It can affect the company in the long-term and mainly consists of:
- Regulatory changes
- Technological updates
- Pressures from Shareholder
- Merger & Acquisitions
- Shifting Consumers demand
B. Operation- Operational risks may occur due to losses the company may experience. Both internal and external factors may play a role here and encompass:
- Altering geopolitical relations
- Changes in the organisation structure
- Frauds and error
- Failure in the IT department
- Monitoring for compliance
Periodic reviews are created of the identified risks that would act as red flags. The experts will analyse which risks are worth the investment in terms of their repercussions and probability.
How Much Does CFO Services Cost?
CFO services are economical, and any organisation, whether small, startup or mid-size, can outsource them. Moreover, the experts provide a wide array of services that are not limited to the financial sector only. Hence, it is wise to have a CFO to handle the financial responsibilities while managing the other business areas. They will aim to diversify your company’s portfolio by investing in different assets and ensure that these are preserved. That is how they add value to any organisation.
Author’s Bio-
Pallab Sen hones expertise in designing customised roadmaps for business, risk management and compliance monitoring. He believes that businesses can transform into conglomerates with proper financial guidance and execution.
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