Many things set Fortune 500 and established corporations apart from struggling firms. And just so you know, this is not just about the ability to make sales or generate revenue.

Many startups and even struggling firms make sales but they are not living the corporate dream. One of the major reasons for this is the lack of expert financial guidance. Many of them do not have a Chief Financial Officer to steer the course of business as it concerns finances.

This is very essential and is why every business needs to make the most of a chief financial officer. If you are interested in knowing what these professionals do, you can visit: https://www.investopedia.com/

This article will shed light on the role of a CFO, especially for small businesses. This is very important as these businesses are usually the ones that miss out on the benefits of engaging these experts. You are advised to keep reading especially if you run, own, or work in a small firm.

How a Chief Financial Officer’s Role will Benefit Small Businesses

 By making the most of capable CFO’s, small businesses are likely to benefit in the following ways:

Analytics

In simpler terms, this is about due reporting. Many businesses are unable to make informed decisions not because they are not willing to take the right actions. More often than not, the problem is that they do not have a good picture of where the company stands. This is especially as it concerns finances.

Well, this problem will be resolved if/when a CFO is brought on board. The practice of giving periodic financial reports of the company’s state will help. A CFO will ensure that the reports are presented promptly. This is so that important actions will be taken when the need arises.

Transparency and Accountability

The hope is that business grows in leaps and bounds. But as this happens, several changes need to be made to adapt to the new normal.

Some practices worked in the early stages but they would not work as the business grows. For instance, the bookkeepers are often given more than just bookkeeping roles to handle at the initial business stages.

At this stage, this does not seem like a problem as there is little to be done. However, the structure has to change as growth sets in. By and large, there is a need for transparency and accountability of the highest order.

This is so that financial loopholes will be avoided and checks & balances created at the very least. This is a possibility when a Chief Financial Officer is brought on board to help out.

Proper Financial Management

If your business will thrive or even survive in the long run; bills have to be paid, invoices filed, payments received, salaries paid, payments processed – promptly. All these have to do with a business having a healthy and well-managed financial structure.

Fortunately, a good CFO can help you achieve these financial goals. For more on how this financial expert can help achieve this, you can click here.

Speaking of financial management, working with a good CFO also helps you to make decisions out of foresight. This is about planning for the future. This helps especially when it is time for business scaling. It would be possible because previous financial data will be studied and analyzed to make future decisions.

Sourcing for Capital 

There is nothing wrong with sourcing for capital to grow a business. You should even know that many of the large and well-established corporations do this. However, it is difficult for many small businesses to raise the needed capital because of an unclear financial picture.

With a capable CFO, your financial information will be clearly outlined. This includes the growth experienced and how your business is creditworthy enough to get the needed capital. In other words, raising capital is easier with a CFO on board.

Various Forms of CFO Services for Small Businesses

As explained earlier, many of the established corporations understand the vital role of these experts. This is why many of them hire them on a full-time basis.

However, the case is somewhat different with small businesses. The cost implication of hiring a full-time CFO is one of the reasons for this.

But even at that, some of these businesses have their ways of enjoying what these experts have to offer. Generally speaking, this is by outsourcing the CFO services as this turns out to be more cost-effective. Some of the ways these small businesses make use of CFO services include:

Consultancy System

This expert can go as far as acting as the CFO on an interim basis. However, s/he is involved with a clear mission to help the company.

This might be to see them through a phase of transition financially and even managerially. The professional helps by offering due reports needed to make informed decisions.Another role this consultant plays is setting up procedures to help the business. In such cases, having an expert consultant can significantly enhance the efficiency and effectiveness of these processes.

Virtual Professionals

As the tag “virtual” implies, these professionals are not stationed physically in the business’s location. However, they make the most of digital technology to help in several ways possible. It could even be as much as helping daily.

You should know that this option is very cost-effective. It has also proven very effective for many small businesses in need of this service.

Conclusion

Other than the two kinds that you have right above, there are at least 3 others. These are – single source, consortiums, and staffing firms. As you consider engaging one of these organization, choose one that it local to you may be your best move. While they can operate remotely, one that is local can operate both remotely and also be able to make the occasional physical appearance. If therefore you operate your business in a city like Sacramento, you can carry out a search for Sacramento CFO services to see local options you can choose from.

What Chief Financial Officers bring to the table will benefit even small businesses in lots of ways. We have shed light on this here and hope that you make the most of their services when the need arises. However, you also need to identify and work with the capable service providers in this line of work.