In many ways, profit determines the success of a business. By maximizing profit and reducing expenses, a business can grow and brand authority can be achieved.
The Chief Financial Officer (CFO) plays a key role in financial modeling and cash management, contributing to the overall success of the business.
The development of technology has introduced a selection of tools that make the job of a CFO, or fractional CFO, a lot easier. By looking beyond spreadsheets and automating processes, the job is streamlined.
Taking advantage of these tools allows the CFO to reduce time spent on managing financials so that they can better oversee clients and work with them to develop business strategies and growth opportunities (based on their financials).
[Please embed: https://unsplash.com/photos/iusJ25iYu1c]
The Responsibilities and Challenges of a Fractional CFO
A fractional CFO plays a key role in organizations that need high-end financial advice. In most instances, a fractional CFO works in a part-time capacity, as a retainer, or with a contract arrangement, offering their expertise and CAS (client advisory services).
A fractional CFO helps companies overcome financial challenges and achieve growth. Financial goals and objectives are achieved by optimizing strategy, implementing systems, raising capital, and navigating transactions - and a fractional CFO wears all of these hats.
By outsourcing a fractional CFO, organizations benefit from experience and expertise without having to pay a full-time position. A fractional CFO usually performs traditional CFO duties on a project basis or during the time between hiring a permanent CFO.
Fractional CFOs are particularly useful in overcoming the following financial challenges.
● Cash management
● Financial modeling
● Improving profit margins
● Reducing high expenses
● Updating financial systems
● Optimizing budget
● Navigating an audit
Tools for the Fractional CFO
The job of a fractional CFO can be challenging at times, and there are several tools that can alleviate the stress and help streamline their work. Consider the following tools that can help a fractional CFO in a variety of different ways.
In the financial world, many accountants are still enslaved to old spreadsheets. While these are useful, there are more efficient solutions for today's environment. Various cloud accounting software help to keep track of the finances and reduce manual data entry.
These tools help manage day-to-day accounting requirements by integrating the data into the software. The process helps to develop modeling and management views with live data. Armed with this data, the CFO can build scenarios to support growth ideas and identify short-term challenges.
By integrating accounting tools with various software, CFOs are able to leverage unmatched power and functionality.
Enterprise Resource Planning (ERP) Systems
An ERP helps organizations manage day-to-day business activities, including accounting and compliance. By integrating a company’s financials, supply chain, operations, reporting, human resource activities, commerce, and other aspects of the organization, CFOs are able to enjoy a more holistic overview of operations.
The benefits of ERP systems will depend largely on the business structure and what the business hopes to achieve. Consider the following steps to selecting the right ERP for the business.
● Conduct thorough research
● Determine the business needs
● Evaluate the choice of providers
● Assess the technical fit
● Develop a realistic implementation plan
● Consider objective and independent advice
Investing in an ERP offers enhanced business reporting, improved customer service, boosted cash flow, improved inventory costs, and better data.
Payment Processing Tools
An organization’s profits are largely determined by the money paid for goods and services. Depending on the nature of the business, processes can get complicated at times. Payment processing tools help to streamline the procedure, offering effective solutions to make the process go easily.
These tools help customers make easier, faster payments which contribute to overall cash flow management. In addition, it simplifies the process of receiving payment.
Other benefits of payment processing tools include reduced human error, lowered labor costs, and efficient processes. In turn, the CFO has more time to focus on strategy and building customer relations.
Payroll Management and Human Resources Platforms
Payroll might appear to be a more HR function than a CFO duty, but it is inextricably linked to human resources. Everything from pay to sick leave has an impact on company productivity and revenues.
As many HR concerns are included in payroll, the human resources and payroll departments must collaborate on common activities. Recruitment, raises, bonus payments, benefit deductions, vacation leaves, and terminations are just a few examples of shared functions handled by these departments. As they're in charge of employee relations as the company's champion of employee interactions, they should also be working together to develop policies and practices that will ensure proper communication between the two groups.
Also, the payroll and HR departments have access to confidential employee data, such as salaries, social security numbers, and home addresses. The two offices must collaborate to prevent this information from getting into the wrong hands. Various tools help to streamline payroll and help CFOs stay on top of important staff matters. Integration of personnel and payroll may help to decrease paperwork, automate reporting, and simplify the generation of combined reports.
Spend Management Tools
Spend management tools are important because they allow CFOs to track spending habits. This is especially helpful when it comes to managing money. Some of the benefits that come with using spend management tools are that they can help budget, identify areas of wasteful spending, and cut down on impulse buying.
By integrating spend management tools, CFOs are able to improve process efficiency, have higher spend compliance, improve spend visibility, and better risk management. As an added bonus, organizations using spend management tools have increased mobility.
Automated Solutions for Fractional CFOs
At Dryrun, we offer an effective software solution to support the financial modeling and cash management needs of a fractional CFO. With the experience and tools needed to support your business growth, we proudly work with a variety of clients across numerous verticals.
Are you ready to manage your clients more efficiently and effectively? Book an appointment with our trusted team today.