Financial management can be a daunting task for new age tech savvy entrepreneurs or SME promoters with limited financial acumen. Yet it cannot be denied that no business can succeed without a prudent management of its financial needs and resources.
To fix this need, we have new age solutions in the form of ‘CFO services” that can take the load off the back of many such SME owners/entrepreneurs. ‘CFO services’ as the name suggests, refer to a bouquet of services typically managed under a CFO and which need to be managed well to ensure a good financial health of the organization.
Why CFO Services ?
A very pertinent question that every SME owner/entrepreneur/startups will have to confront is the need for the CFO services. In most cases, an Accountant is hired and is expected to manage the financial health of the Company and also give expert advice. But the result largely is just data entry, delayed payments, irregular compliances and inspite of a profitable business, there is cash crush and struggles with working capital. When these problems arise, they have a negative impact on business prospects, valuations and fund raising and the growth is thereby hampered.
Maintaining an in-house CFO with supporting staff can be a drain on the limited financial resources. In early stages of business, cost is an important factor for ensuring business viability. This is when outsourcing CFO functions to a reliable financial advisory partner (CFO service provider) can help boost your business, while at the same time maintain prudent cost centers. Repeated manpower attritions can affect the stability and security of a business at every stage.
A reliable financial advisory partner ensures continuity in business, that is equally critical to a stable business. Cash flow management, Accounting, Raising funds, Budgeting functions, statutory compliance and more can be managed by experts while the entrepreneurs can focus on their core competencies. CFO services act as conduit and can also help during the interim manpower changes without compromising on the business quality. The SME owner can also opt for specific advisory services to be continued on a long term basis – which further insulates him against any human resource hiccups.
An in-house CFO too may need expert strategic advice for certain projects. Your financial advisory partner can also help with project specific CFO services, as they cater to a multitude of financial challenges and have diverse capabilities.
The scope of services may vary between providers but broadly they cover:
• Internal Controls
• Budgeting & Forecasting
• Working Capital Management
• Tax Advisory
• Interim CFO/ CFO Assistance
• Project Management (short term/mid-term/long term)
• Fund raise & Deal Structuring
• Strategic Advisory
CFO service providers can also help find, analyse, and place full time CFOs when required – since they have the capabilities to choose the best from their domain.
With a dedicated financial team, expert insight, greater flexibility, cost efficiency, better controls & compliances, stability – CFO services are a win-win solution that matches the goals & expectations for all players in all kinds of businesses, but a real boon to young start ups.
This article is authored by Dinesh Makani, representing India Business Solutions (IBS) which is a boutique advisory firm helping a lot of Start ups, SMEs in India and Singapore in fulfilling their aspirations. Dinesh is a Managing Partner & Founder at IBS and can be reached at firstname.lastname@example.org