Can CFO reporting make a meaningful difference in your growth?
You’ve successfully launched your business and you’re in a season of growth. Like many CEOs, you have big plans for your business and you want to make all the right moves to help you reach your goals. To do this, it is important that the financial state of your business is growing and evolving at the same level as the rest of your business.
However, managing your business’s finance on your own can consume your time and pull you away from other important tasks.
In a study by Deloitte, “companies surveyed spent 48 percent of their time creating and updating reports versus 18 percent spent on communicating the results to the business.”
Unfortunately, this statistic is true for most businesses that are not utilizing a CFO. You may be running all the numbers and compiling detailed reports but actually utilizing that information has become more of an afterthought.
A simple solution? You need to hire a CFO or a CFO service to ensure you are getting the maximum value from your reporting.
The Role of a CFO
- Help your business avoid fraud maintain compliance
- provide valuable financial experience and planning
- make sense and better use of the data you collect
- offer a glimpse into what the future of your business may look like
In short, think of a CFO as someone who will provide your business with two key functions to help it grow and meet the goals you’ve created:
- accurate reporting
- sound analytical advice
These functions go hand and hand because without accurate reporting, a CFO cannot provide sound analytical advice.
Seven Reports CFOs Provide That Will Help Your Business Grow:
1. Cash and cash flow forecast
A CFO will provide insights into where you should and shouldn’t be spending money, as well as where that money will be best spent. A proper cash flow forecast won’t just help you create a positive cash flow, it will also help you allocate funds to maximize growth long term.
2. KPI reporting – includes KPI identification and reporting
Key performance indicators play a massive role in helping your business grow when used correctly. A CFOs job is to identify the KPIs that will be most beneficial to your business and find ways for them to directly impact your revenues and budgets.
3. Budget and budget forecast
Having an effective budget and budget forecast can make or break your business. A budget is used to set goals for your business and a budget forecast will create expectations for your business. CFOs will use these as a foundation and a point of reference when suggesting and providing analytical advice.
4. Sales forecast or customer pipeline
As far as sales forecasts or customer pipelines go, it’s all about the consumer. CFOs will use these reports to determine where your sales are coming from.
This report shows you:
- How many customers you have
- Who your customers are
- Your customers probability of conversion
- When your customers will materialize
This information is essential in determining whether or not your current sales plan is creating the best possible results.
5. Consolidated and segmented P&L, balance sheet, and historical cash flow
These reports gather all of the need-to-know info about past performance. From there, CFOs can determine what areas your business is excelling in and what areas need work. Consolidated and segmented P&Ls are chalked full of details that allow CFOs to suggest smart and calculated changes to help grow your business.
6. Segmented gross margin/contribution
CFOs will use segmented gross margin/contribution to benchmark different parts of your business. This means they will compare areas of your business that are working well with areas of your business that aren’t working well and apply the positive attributes of the performing parts to the underperforming parts. Eventually, by using this process, your business will see growth across the board.
7. Internal productivity
Internal productivity reports will measure productivity from a variety of different angles within your business. With these reports, CFOs will revert to benchmarking as a way to measure and improve internal productivity and consequently improve your business as a whole.
Hiring a CFO Ties the Reports Together
Meaningful and influential financial data can be found in nearly every area of your company. It is important to incorporate a full-time CFO or a CFO service into your business so they can properly tie together the information needed to help you grow.
CFO Service vs Full-time CFO
Hiring a full-time CFO can be incredibly time-consuming. Some of the steps include:
- Creating a job description
- Posting a job listing
- Going through the interviewing and hiring process
- Giving access to financial tools
- Attending onboarding meetings to help them learn your business
- Providing time for them to start producing meaningful advice and reporting
In comparison, hiring a CFO service will eliminate the lengthy interview process and produce results between 30 and 60 days sooner than a full-time CFO.
CFOs charge a pretty penny for their services. In fact, numbers anywhere between $300,000 – $500,000 are considered fair game. More often than not, a CFO service will provide the same, if not better services for a fraction of the price.
Not only this, but it isn’t uncommon for a CFO to be hired and require special reporting tools and services that may be a cost to your business.
When you hire a CFO service, you can know for certain they have all of the proper tools they need to best serve your business.
Maximize Your CFO Reporting by Hiring a CFO Service
Your business is not reaching its full potential without the help of a CFO service. Through accurate, detailed reporting and sound analytical advice, a CFO service will be able to help your business grow and reach the goals you’ve set all while saving you time and money.
Pasquesi Partners offers outsourced CFO services to help grow your business. Click here to learn more.