The Most Common Outsourced CFO Services – Part 1

As fractional CFOs, we field many requests from business owners. Over the next three posts, I’m going to tell you the six things that are requested most often. 

For starters, everyone wants a fast month-end close, and accurate and speedy reporting to the bank. 

Accurate Forecasting 

Anyone can throw numbers on a spreadsheet to see what they look like.  It’s simple to say, “let’s put in a 25% increase for this year”.  But if your numbers are trending down, that kind of a forecast isn’t going to be helpful.  

When we forecast, there is a method to it.  We take a close look at trend analyses, in addition to examining seasonality by product and business segment.  We also add in macro-economic trends, such as how changes in the economy could impact on the company’s performance.

Cash Flow Planning 

Everyone wants to know how much money they can spend over the next month or two.  Forecasting cash for a long period is more guesswork than science. Typically, it’s easy to do a fast and dirty analysis. But that’s less helpful for planning. 

This is where a 13-week cash flow forecast provides better guidance. To forecast cash flow, you first need to know what your expenses are going to be. From there, we then layer in your cash receipts. Cash receipts are going to follow sales, so you need to be able to project sales first, then how fast your customers pay. Understanding and managing these flows and how they work together are benefits of working with a CFO.

In Part II, we’ll examine company growth in terms of recovery back to pre-pandemic levels, and how to expand financial reporting to include industry comparisons and additional KPIs.

#CFO #FractionalCFO #outsourcedCFO #Forecasting #Cashflow