Money and finances are two of the most important elements in a business’s success. Around 82% of small businesses fail due to cash flow problems, so it is clear that having properly aligned finances are critical.
However, managing finances is not an easy task. Many business owners are fluent in their industry but do not have as much experience when it comes to crunching numbers.
This is where CFO services step in. A CFO service has the potential to transform a business and help expedite success. Keep reading to discover five things you should know about CFO services.
1. They Improve Accuracy and Uncover Mistakes
When working with a CFO service, one of the first things they will likely do is look over your current finances. While this sounds simple, it profoundly impacts a company’s financial health.
This is partly because having a third-party look at the situation presents an unbiased view. The CFO service will be coming in with a fresh set of eyes. So, they may find something that others will have missed.
Freelance CFO services also come with a wealth of experience—and that only adds to their unique perspective on your business.
Some errors in records or financial mistakes may not be evident to the average person. However, an experienced financial professional will approach the situation with the knowledge necessary to uncover those mistakes and remedy them if required.
2. They Find Money-Saving Opportunities
As a CFO service looks over your company’s finances, they may find more than just mistakes. They may discover money-saving opportunities your company can take advantage of—helping your bottom line.
One of the most significant places where money-saving opportunities are often missed is in taxes. Fractional CFO services can increase your tax savings by evaluating your situation and discovering if you are overpaying. They may even find tax breaks, credits, or deductions you qualify for.
In other situations, they may make recommendations that will reduce your tax burden. For example, they may suggest you change your hiring process to take advantage of specific government programs.
In either case, your company ends up saving money without having to do much. This is a simple way to improve a business.
3. They Help Organize Your Business’ Budget
Budgets are incredibly important to any business. A balanced budget helps guide the decisions within a company and ensures the business keeps making money. Without a budget, a company may make decisions that lead it to financial ruin.
Part-time CFO services will come with the ability to assemble a budget for your business easily. They will look at your company’s financial records and data to understand who you are and how you do business. Then, they will use this information to create a budget.
What’s important is that the CFO service will create a budget that will work for you instead of against you. They are already aware of your company’s strengths, weaknesses, and overall capabilities. So, they will keep these factors in mind in order to create a budget that doesn’t constrain you but prevents you from making costly mistakes.
4. They Help Create a Financial Strategy
A budget is a great asset in guiding a company’s decisions. However, most CFO services go beyond a budget and actually help create an entire financial strategy.
Doing this involves a deep knowledge of the company. As already mentioned, a CFO service will take a deep look at the company’s finances as soon as they start working with the company. They then use this in-depth knowledge to create a financial strategy.
Often a strategy like this will focus on finding ways to make money while simultaneously cutting costs. To make money, the strategy may include suggestions about raising prices or doing more of the company’s most profitable business. To cut costs, the strategy may include suggestions about cutting specific departments or avoiding doing business that isn’t as profitable as other forms of business.
Depending on the company, these suggestions will vary. There is no one-size-fits-all approach to running a business. This is why the experience and knowledge of a CFO service help in creating an individualized approach.
5. Outsourced Services Save Money
There are plenty of reasons companies decide to outsource work. However, the biggest is usually that outsourced work saves money.
Instead of hiring a full-time employee to handle financial work, outsourcing allows you to offload this work onto virtual CFO services. This means you aren’t paying for a full-time employee’s salary and any associated benefits. Simply cutting out these costs dramatically impacts a company’s budget.
In some cases, the work of a CFO service may replace the work of multiple employees. This opens up even further financial savings.
On top of this, outsourcing prevents you from having to spend money and resources on recruitment. You don’t need to run ads for a position in your company, spend time and energy on interviews, and spend months training a new employee. Instead, you simply have to contact the service, and they will immediately start working with you.
Making the Most of CFO Services
There are plenty of ways CFO services help make businesses better. Whether you need to create a balanced budget or develop an entire financial strategy, they are able to assist. This helps the company stay financially sound and, thus, stay in business.
If you need outsourced CFO services for your company, contact the professionals at Bennett Financials for a free consultation.