Fractional CFO helping Business Leaders to better understand their numbers and optimise financial outcomes
Most businesses without the budget or workload to employ a full-time CFO simply go without altogether. But what are they missing? What does a CFO do? Of course, a CFO may be involved in a broad range of business activities as needs arise, but in my experience the core responsibility of a CFO in a business is to help remove blind spots by providing financial leadership to the Finance Team and the Senior Management Team. Other activities that the CFO may get involved in won’t much matter if the financial storytelling is not up to scratch and the business leaders don’t understand the levers available to improve profit and cash flow. Sadly, that will be the case for most businesses lacking the financial leadership provided by a CFO. Let’s dig into that further to provide a deeper understanding of what you should expect of a quality CFO. 1. Numbers Right – Your monthly financials are accurate and can be trusted and relied upon. A CFO will elevate your bookkeeping into accounting so that your numbers are reflective of business performance. It’s surprising how many businesses don’t know the true score. 2. Presented Right – Key information is extracted from the financials and presented so that the financial story can be simply understood. A CFO will focus on reporting less, but more meaningful numbers, and interpreting those key numbers so that business leaders understand all aspects of the financial performance. Done right, you will have your financial story presented on 1 page, showing profitability, summary balance sheet and net cash flow (more on this 1-page reporting in a future post). You are flying blind if you don’t know your cash flow and why it differs from your profit. The answer lies in the balance sheet movements, and these can be managed to optimise cash flow. 3. Optimise Right – With your numbers being right, and being presented right, business leaders can optimise right. A CFO will provide financial leadership to ensure that business leaders understand the financial story and the levers available to improve profit and cash flow. One of the most powerful things a CFO can do is demonstrate the financial impact of small improvements and engage business leaders in discussions on how these improvements can be achieved. This is where the magic happens. Ultimately, a CFO is all about facilitating strategic financial management and a lack of financial leadership in your business can have enormous consequences to profitability, cash flow and business valuation, not to mention stress levels. Insightful management information and accurate financials shouldn't be something only enjoyed by big business. If you would like to know more or would like to understand options around improving the financial leadership in your business, then please reach out to me to chat further. #businessmanagement #financialmanagement #strategicfinancialmanagement #financialleadership #cashflowmanagement #businessoptimization