The job of the corporate finance professional is much more than just keeping books and preparing taxes. Today’s Chief Financial Officer is a board-level decision maker who helps captains of industry manage financial risks and plan strategically for the future. Since the passage into law of the Sarbanes–Oxley Act of 2002, the penalties for non-compliance with the latest financial reporting regulations have become severe. For public corporations and all small businesses with aspirations for growth the stakes have never been higher with respect to transparency and accuracy of reported financial information.
In a new era of open-ended risk, the role of the corporate CFO has evolved decidedly. The office of Chief Financial Officer was once thought of as one of fiscal gatekeeper. Today, the office of CFO is more of a trusted advisor to a firm’s board and upper management. Indeed, more chief executives expect their CFO’s to play an active role in shaping organizational policy and strategy than ever before. In very large organizations, the CFO is the equivalent of a director with responsibilities for oversight, risk mitigation and financial stewardship. Within certain smaller corporate cultures, the CFO position is regarded as “CEO-in-Waiting”.
Today’s emerging growth companies are subject to the same disclosure and compliance responsibilities as large corporate enterprises. It is also true that they frequently have specialized needs in connection with strengthening banking and investor relations. Smaller businesses also need an objective set of eyes to oversee their finances and help them gain timely, accurate and meaningful insight into the business operations. An emerging organization’s CFO can help management actualize their strategic growth plans, but many such firms lack the resources to hire a full-time CFO. For these companies, the solution is to use the services of an outsourced or virtual CFO.
The Value of Outsourced CFO Solutions
Partnering with a fractional or virtual CFO services organization can help a company realize cost savings and isolate opportunities that would otherwise go unnoticed. Wise counsel and the financial leadership gained through the virtual CFO experience can make all the difference when an organization needs to get through a particularly challenging stretch of road, or when faced with the potential for devastating consequences brought about by regulatory non-compliance. The virtual CFO is there to assist the entrepreneur succeed through advanced strategic planning and business improvement by way of executive decision making. The virtual also CFO benefits the entrepreneur in these areas:
- Organizational structure and corporate governance
- Growth plan development
- Strategic planning
- Risk and opportunity analysis
- Budget planning and financial projections
- Maintenance of accounting records in compliance with GAAP
- Cash flow analysis
- Corporate finance (raising investment capital)
- Enterprise resource planning
- Systems analysis for the development of administrative systems to control financial risk
- Operational oversight and results analysis
- Staffing assessment and training management
- Government and/or peer group compliance assessment
Along with the advisory and financial oversight benefits gained from using a virtual CFO, a client organization likewise prospers from the expert supervision of accounting and financial records certain other services that include:
1. Setup and review of accounting procedures, systems and controls
2. Cash flow analysis
3. Supervision of bookkeeping staff
4. Financial modeling and revenue projections
5. Budget preparation
6. Tax compliance
7. Advocacy and advisory with respect to debt and equity structures
8. Asset management
9. Business plan preparation
10. Due diligence for mergers, acquisitions and investments
11. Business purchase and sale transactions
12. Benefits analysis
Partnering with a virtual CFO can be a cost effective alternative to using a high-priced management consulting firm. The financial leadership, acumen and expertise of the virtual CFO allows a client organization to grow naturally by assisting them in expanding revenues, improving management controls, ensuring contract compliance, minimizing risk and improving their overall business operations.
Photo Credit: Flickr/Brad Greenlee