MANAGING FINANCE
WHY A CFO?
The responsibilities of the CFO are growing each day as the focus of finance shifts from traditional accounting and reporting to strategy and leadership.
Managing finance, or more precisely, managing business value. We are everything about business finance We base our financial strategies around fundamental building blocks:
- Working Capital
- Cash flow and liquidity
- Financial Risk with wealth preservation/enhancement
- Balance Sheet management
- Funding source management
- Value
Providing superior financial management from analysis to industry benchmarking, from negotiated lending packages to treasury management, and from financial risk assessment to enterprise value planning. That is what we do at a fraction of the cost of a full time CFO.
Business risk is defined as the uncertainty of income and wealth preservation resulting from fluctuation of revenues and the level and management of a firm’s operating expenses and overhead.
preserve wealth/value
Two thirds of company builders rely on outsourcing to handle one of more internal corporate functions – most service being financial. The reason – over 70% of outside providers are more efficient. Those that outsource have revenues 22% higher that those who do not.
improve wealth/value
Risk surrounds almost everything worth having. Prioritizing and quantifying risks should be near the top of any business plan.
Expand wealth/value
Every business needs a CFO. But every business does not need a full time CFO. That’s why we created the CFO System
every business needs a cfo
Yes, every business needs a CFO, a Chief Financial Officer. Why? To get to this conclusion, we need to understand what a CFO and finance is and is not.
First and foremost, finance is an art. While there are all kinds of ratios and benchmarks and graphs – these are cousins to the numbers. But finance is not about numbers finance it is not “bean counting”, finance is not about debits and credits, finance in not just banking and capital, finance is not about the past.
Finance is more than numbers, more than banking, more than ratios. Finance is about the future.
The tools of finance start with the past, without it there is no future. Accounting is critical to making sure the past and its “beans” are accurate – this is the foundation of finance. With this “past”, finance uses models, analysis, risk assessments, strategic plans, financial and business strategies and sound judgement to determine “today” that can lead to “tomorrow”. And tomorrow calls for wealth and value enhancement, ideal financing, capital structuring, liquidity strategies and risk management as outlined by management through its shareholders.
The fundamental and primary tool of finance is analysis. Analysis is what is so very lacking in every business no matter its size, but especially in small and mid-sized firms. Without analysis there is no true understanding of the numbers, the decisions, provided by accounting. With no way to understand decisions, by customers, employees, shareholders, managers, financing sources, etc. there is no way to maximize business potential matching risk and reward.
So to simplify, for the business accounting is the what, bringing together accounting and finance creates the how, and finance answers the why.
The conclusion? Every business needs analysis, risk management, structuring, planning, and the answer why to all decisions made and to be made.