Many wonder the value CFO services bring to the table, in this series of demystifying CFO Services I would like to expand as to what this entails and what value it adds to the organizations.
CFO services generally designed based on the size, complexity of the business and growth stage of the company.
CFO focus areas are Strategic planning, Operating plan & performance management, Profitability improvement, Cash-flow management & forecasting, Board reporting, MIS setup and reporting, fundraise.
From organization design to performance metrics, strategic long-range plan to annual operating, budgetary controls to financial policies, board reporting to monthly dashboards and review, CFO services cuts across all functions of the organization and is the fulcrum of the organization decision-making process for profitable growth.
Also Read: The Top 10 KPIs Every Startup Needs to Track
CFO services provide the following value to the organizations:
1. Strategic planning:
Strategic planning of the company and implementation of long term and short-term targets in terms of revenue, products or services.
2. Board and investor management:
Board and investor management is very critical for continued support for VC/PE/FO funded companies and CFO ensures that investor expectations are managed in a proper way and ensures the path is laid for a conducive board that continues to support the future growth of the company. CFO also helps the company raise future capital and be a part of the fundraising exercise.
Cashflow is critical for survival and estimating the future cash flows is the key differentiator between and companies who flourish and companies who barely survive.
4. Profitability Management:
Profitability is the key driving point for any organization to survive and revenue maximization and cost reduction are the mantra CFOs implement across Organizations. This is achieved by using various tools to arrive at the right decisions on customer mix, cost optimization, and cost structuring. This involves restructuring the pricing process and the way costs are being viewed.
5. Budget and annual operating plans:
Implement annual operating plan which encompasses entire organization, reviews the historical data, past performance segments the business both in terms of revenue and headcount, sets targets and identify performance measures, implement measurement system, review performance and report. This includes the set up of MIS systems and dashboards.