Many wonder the value CFO services bring to the table, in this article i would like to explain as to what this entails and what value it adds to the organisations.
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, fund raise.
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 organization decision making process for profitable growth.
CFO services provide the following value to the organizations:
1. Strategic planning of the company and implementation of long term and short-term targets in terms of revenue, products or services.
2. 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 set up of MIS systems and dashboards.
3. Profitability is the key driving point for any organization to survive and revenue maximization and cost reduction is the mantra CFOs implement across Organizations. This is achieved by using various tools to arrive at right decisions on customer mix, cost optimization and cost structuring. This involves restructuring the pricing process and the way costs are being viewed.
4. Cashflow is critical for survival and estimating the future cashflows is the key differentiator between and companies who flourish and companies who barely survive.
5. 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 who continues to support future growth of the company. CFO also helps company raise future capital and be a part of fund raise exercise.