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Intelligent Insights: A CFO's Strategic Methods for Cost Controls

2017-07-03 16:11:57.0

| Author: FAS

FAS specializes in small business bookkeeping and tax services. We work closely with small businesses in Katy, Fulshear, Houston and nearby areas. Call us for Free Consultation: 832-437-0385 .






An intelligent insight will drive bottom line growth for your small business. In this article, we will explore the strategic ways CFOs analyze your business revenue and expenses trends.

Truth be told, if you are serious about growing your business, your best investment is to hire a part-time CFO. A CFO has the relevant skill sets and business intelligence that can strategically drive profitable revenue improvements with focus on increasing your business value. More importantly, you get the professional help to design an integrated profitable program for business growth.

But most small businesses perceive CFO service as another unreasonable expense and only fitting for Fortune 500 companies. That’s not true anymore in today’s economy. To even qualify in a tight market competition, a small business owner must be able to advance in the game. There is no room for average performers as there are only two choices for you: fail or succeed; and there is no middle-ground.

What can a CFO do for your small business?

You should know that there are three major roles a CFO can perform to help improve your business performance.
  • Financial forecasting
  • Cost-benefit analysis
  • Funding acquisition

In the past, CFOs focused their roles on two things: compliance and quality control. But these roles have evolved into a more strategic nature that play a fundamental role in achieving business expansion and sustainability.

A direct insight from a CFO, here’s Kurt Kuehn, discussing how a CFO helps a business become vibrant and successful.

For a small business, getting CFO help will advance your financial performance with recommended corrective actions from a competent professional. Sure, you can maybe analyze your financial data, but it takes the higher level financial skills of a professional financial controller to analyze correctly and develop appropriate strategies to improve signs of weaknesses while further fortifying your business strength.

Let’s have a look at a case example --

As part of your efforts to take your business to greater heights, you want to launch a new marketing campaign. If you are spending blind, you have no way of tracking your return of investment. Soon, you could end up exhausting all your available funds. But with CFO help, you can well plan your budget and determine how and where to get funds that will support your marketing spending. More importantly, you can know at an early stage whether your campaign is financially feasible.

You need a financial leader, even for a small business if the goal is to get on the road to growth and success. Don’t agonize too much on the amount you have to invest for a CFO salary because you can always take the option of hiring a part-time CFO.

FAS - Fontanilla Accounting Solutions

Here’s a better question for you: how much will you gain from getting part-time CFO help? Let’s break down the profitable returns you will score for taking qualified professional help from a CFO you can trust.

  • Business planning and budgeting

Working with a CFO, you can develop a strategic business planning and budgeting process, then implement. Preparing a detailed financial budget using a system that will help you accurately monitor variances will generate a reliable financial report based on your business plan and budget.

A business lacking plan and budget could potentially fail and it will be difficult to boost the financial performance. If you’re not ready to fail in your business, it’s the best time to start planning and budgeting. The key to your success is control - financial control. If you have a CFO on your side, your expenses are strategically controlled within your financial capabilities and within the best financial interest of your business while making sure your business is adapting to the changing economic and market landscapes.

  • Cash flow forecasting

What you must understand is that your cash flow forecasting is the one metric that can crash your business if done wrong. You can’t take that risk. Imagine a forecasted cash flow falling short of forecast. That means your business expenses increases signaling critical vulnerability and in a matter of time, you could drain your cash flow. Then, you are out of business.

Your CFO holds the power to ensure that your net cash is lower than forecast. You should not take chances to depress your investment returns. If your cash flow forecasting is accurate, you are better equipped to make sound business decisions and improve your business performance.

  • Costing (job order costing, process costing)

Effective and efficient costing rests heavily on strategic CFO skill. And you must learn to control your cost to make more profit. Consider that even with increased sales, if you don’t manage to control your expenses, all your profit will dry up.

If you don’t know bookkeeping, it is wise to leave costing to the professionals who fully understand standard costing system, which involves cost estimates of your production process. These cost estimates are used to determine the budget. It is necessary to analyze the variance between the standard cost and the actual cost to help improve, manage, and control expenses for operational efficiency.

Learning Curves from CFOs

Of vital importance to improve your business profitability is controlling your business expenses. According to the Gartner report, businesses reducing five percent of their operating costs approximately equates to 30 percent sales increase. But more than crunching numbers, the world’s highly successful CFOs share their best insights with Business Insider on making big financial decisions driving big successes for global companies.

All 18 valuable financial insights direct from the financial chiefs of globally successful companies in one presentation that you can download for FREE on SlideShare. Here’s a limited chance to learn from the CFOs who were responsible for the skyrocketing profit of huge companies such as Twitter, Ford and many other leading global companies.

 

___________________________________

CFO Growth Foresight: Strategies for Analyzing Trends

Strategically controlling business expenses to drive business growth begins with analyzing the trends. Many small business owners are not qualified to perform this task; yet, still many insist to do it all. Such a strong entrepreneurial enthusiasm is admirable but not exactly smart.

That might be alright in the beginning, although not for long. And certainly, not for growing, small businesses with greater ambitions to earn higher profit.

A CFO helps you run your business revenue and expenses analysis to map the trends that will provide you with the necessary insights in making profitable business decisions and growing your business in a competitive market.

How does a good CFO or financial controller perform the trends analysis? Watch the video presentation to help you understand the step-by-step plan.

 


We help you plan, forecast and analyze your financial data
so you can get on top of your finances today to grow your
small business big tomorrow.

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Address | 810 S. Mason Road, Ste 160, Katy, TX 77450
Office | 832-437-0385
Email | admin@fas-accountingsolutions.com

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